Asia has been at the forefront of wealth creation in the last decade. Last year it boasted 787 billionaires, easily exceeding the 452 in Europe and 631 in North America, according to the 2019 Wealth Report by London-based real estate agency and consultancy Knight Frank.
As a result Asia is expected to see one of the largest-ever waves of wealth transfers from first-generation wealthy to their heirs over the next two decades. Succession planning and family governance will top the list of priorities for such families in Asia.
To help manage this transition, a growing number of wealthy families in Asia are considering setting up family offices to serve as the focal point of the management of their assets and investments.
A family office is a private wealth management advisory firm that is set up by a family to oversee the day-to-day administration and management of their assets and investments.
In addition, family offices also work with other specialists to provide advice on tax, legal, property and estate management, risk management, philanthropy, and even lifestyle services or educational programmes for the younger family members.
The choice of location to set up a family office can have significant consequences. It is not simply choosing a location for wealth management, but also a place where the interests of the family can be best served and safeguarded. Singapore checks plenty of boxes.
Singapore is very stable politically and the government has consistently adopted a very pro-business stance. It has consistently been ranked either first or second in the World Bank’s annual ‘Ease of doing business’ index over the last decade.
The government is keen to attract foreign investors. The Global Investor Programme, which is administered by the Economic Development Board (EDB), offers permanent residency status in Singapore for qualifying individuals or families with net worth above S$400 million.
Singapore is a well-established business hub, with a network of over 20 implemented Free Trade Agreements (FTAs) with more than 30 trading partners around the world and a comprehensive network of more than 100 double taxation agreements (DTAs).
Singapore’s legal and regulatory frameworks are clear and transparent, and it offers a number of attractive tax incentive schemes for family offices. For example, tax exemptions are provided for funds managed by family offices on specified income or gains from designated investments.
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