Singapore’s streamlines framework for Single Family Offices

The Monetary Authority of Singapore (MAS) announced that the revised framework for Single Family Offices (SFOs), which provides a simple, streamlined process for SFOs to establish operations in Singapore, was brought into force on 15 June.

The revised framework creates a straight through class exemption from licensing for all qualifying SFOs operating in Singapore, regardless of structure. SFOs that meet the requirements need only notify MAS of their operations and maintain an account with a MAS-licensed bank. They also have to file an annual return with information on the total assets under management and the name of their bank.

This revision follows a public consultation on the revised SFO framework and the policy responses by MAS to the industry’s feedback published in November 2024. Existing SFOs operating in Singapore will have a transitional period of one year to comply with the revised framework.

To operate in Singapore under the licensing exemption framework an SFO must only conduct fund management for, or on behalf of:

• Family members, including family trusts and corporations wholly owned by, and for the sole benefit of the family.
• Charitable organisation(s) funded exclusively by the family.
• Key employees (Executive Directors, Chief Executive Officer, Chief Financial Officer and investment professionals). Assets originating from key employees must not exceed 10% of the total value of the SFO’s assets under management in aggregate.

An SFO can be held via a trust, foundation or any other legal structure, provided the funding of the SFO originates exclusively from members of the same family, whether directly or indirectly, and key employees, who are permitted to own a non-controlling stake of up to 10%.

An SFO must be incorporated in Singapore and the SFO and its fund vehicle(s) must each open and maintain a bank account with a MAS-licensed bank. Foreign incorporated fund vehicle(s) may open and maintain an account with a MAS-licensed bank in Singapore, or with a regulated bank in a jurisdiction that complies with equivalent anti-money laundering and countering of financing of terrorism (AML/CFT) requirements consistent with Financial Action Task Force (FATF) standards.

The term ‘family member’ refers to all lineal descendants of a common ancestor (living or deceased) who are up to five generations removed from the youngest generation that established the SFO in Singapore, including:

• Current or former spouses.
• Adopted children.
• Stepchildren.
• Parents-in-law.
• Siblings-in-law.

It is not MAS’ intention to license SFOs because, unlike licensed fund managers, they manage their own assets or assets belonging to members of the same family. A new SFO must simply file a Notice of Commencement of Business with MAS within 14 days of commencement of its operations in Singapore. An existing SFO that intends to continue operating in Singapore will have one year from 15 June 2026 to satisfy the conditions under the licensing exemption and to file the Notification.

An SFO is required submit its first annual return within four months from the end of its current financial year, in respect of that financial year. There is no requirement to submit an annual return in respect of the SFO’s previous financial year prior to Notification.

A service provider can submit the Notification and annual returns on behalf of an SFO. The Notification must be accompanied by a copy of the declaration signed by a family member who provided the assets to be managed by the SFO, and a director of the SFO. Only one signatory is required if the family member is also a director of the SFO. The service provider cannot provide the signed declaration on behalf of the SFO. Electronic signatures are accepted.

An SFO must ensure that it is able to satisfy all the conditions of the exemption, before submitting its Notification. There is no requirement for an SFO to seek legal advice to support its qualification under the exemption or to provide a legal opinion when submitting its Notification. An SFO is not required to provide the name of its legal adviser as part of the Notification.

“The revised MAS framework is a welcome development for Singapore’s Single Family Office ecosystem, particularly in moving towards a clearer and more practical notification-based regime. While legal advice is no longer formally required as part of the notification process, families should still take care to ensure that the structure, governance, banking arrangements and ongoing compliance are properly thought through from the outset,” said Andrew Galway, Managing Director of Sovereign Management Services in Singapore.

“This is where experienced partners can add real value. At Sovereign, we are well placed to help families navigate the practical implementation of a Singapore SFO, coordinate with suitable professional advisers where needed, and introduce appropriate Singapore banking partners. The framework may be simpler, but getting the structure right at the beginning remains important.”

Banks are also required to conduct the AML/CFT checks on SFOs and their fund vehicles. The customer due diligence and ongoing monitoring checks conducted on an SFO should be subject to the bank’s risk-based approach when it establishes a business relation with its customer.