How a Singapore Single Family Office Used 13O and 13U Tax Exemptions to Preserve USD 280 Million Across Three Generations
How a Singapore Single Family Office Used 13O and 13U Tax Exemptions to Preserve USD 280 Million Across Three Generations
Content Outline:
Introduction and family background
The wealth preservation challenge
Singapore Single Family Office solution
Section 13O and 13U qualification process
Investment strategy and performance (2020-2025)
Tax savings analysis
Succession planning implementation
Operational substance and compliance
Lessons learned
When SFO structure makes sense
When ultra-high-net-worth families accumulate significant wealth through business exits or generational wealth transfer, they face a structural question that directly determines how much wealth survives across generations. Traditional investment structures subject investment income to corporate tax (17% in Singapore), dividend withholding tax, and personal income tax in the beneficiaries' home countries.
Across three generations and 40 years of compounding, tax leakage of 15-25% annually can erode half of a family's wealth.
This case study follows the Tan Family (name changed), a Singapore-based family who sold their regional manufacturing business in 2019 for USD 180 million. Instead of investing proceeds through a standard corporate investment vehicle or individual brokerage accounts, the family established a Singapore Single Family Office (SFO) structure in 2020, qualifying for Section 13O and subsequently Section 13U tax exemptions.
Between 2020 and 2025, the family's assets under management grew from USD 180 million to USD 432 million. The 13O/13U structure delivered zero Singapore tax on investment income (dividends, capital gains, interest), preserved wealth across three generations (grandparents, parents, and children), and positioned the family to maintain tax efficiency as assets transfer to the next generation.
Considering a Singapore Family Office structure for your wealth? We help families assess whether Section 13O or 13U exemptions fit your situation, navigate MAS requirements, and structure multi-generational succession plans.Book a 15-minute consultation to discuss your family's specific needs.
The Family: Third-Generation Manufacturing Exit and Succession Planning
The Tan Family: Wealth Origins and Business Exit
The Tan family built a regional automotive components manufacturing business over three generations (1950s-2019). By 2019, the business operated factories in Singapore, Malaysia, Thailand, and Indonesia, supplying brake systems and suspension components to Toyota, Honda, and Nissan assembly plants across Southeast Asia.
Family structure (2019):
Generation 1 (Patriarch and Matriarch):Mr Tan Senior (aged 78) and Mrs Tan (aged 75), original founders' children who expanded the business regionally in the 1980s-1990s
Generation 2 (Children):Three adult children aged 45-52, two of whom worked in the family business as CEO and CFO, one pursued an independent career in finance
Generation 3 (Grandchildren):Seven grandchildren aged 12-28, some still in school, two working in professional careers outside the family business
Business exit (2019):
In 2019, a Japanese automotive conglomerate approached the Tan family with an acquisition offer. After 18 months of negotiations, the family sold 100% of the business for USD 180 million (cash consideration).
Post-exit wealth distribution:
Mr and Mrs Tan Senior (Generation 1) owned 60% of shares, receiving USD 108 million
The three adult children (Generation 2) collectively owned 40% of shares, receiving USD 72 million (USD 24 million each)
Tax on business exit:
Singapore does not impose capital gains tax on the sale of shares, so the family received the full USD 180 million proceeds without immediate tax liability.
The Wealth Preservation Challenge
The family faced three interrelated problems:
Problem 1: Tax on Investment Income
If the family invested USD 180 million through traditional structures, investment income would face multiple layers of tax.
Scenario 1: Invest through a Singapore private limited company (Pte Ltd)
The family establishes Tan Holdings Pte Ltd (Singapore) and capitalises it with USD 180 million. Tan Holdings invests in public equities, bonds, and private equity funds.
Tax treatment:
Corporate tax:Singapore taxes corporate income at 17%. Investment income (dividends from portfolio companies, interest, realised capital gains if trading activity is frequent) is taxable.
Dividend withholding tax when distributing to family members:When Tan Holdings declares dividends to Mr Tan Senior and his children, Singapore imposes zero dividend withholding tax (Singapore does not tax outbound dividends). However, family members must declare dividend income as personal income in their country of tax residency.
Personal income tax:If family members are Singapore tax residents, dividend income from Singapore companies is generally exempt from personal income tax under the one-tier corporate tax system (dividends are deemed already taxed at corporate level). However, if family members later relocate to higher-tax jurisdictions (e.g., UK, Australia), dividends may be taxable at personal rates of 30-45%.
Estimated annual tax leakage:17% corporate tax on investment income, compounded over decades, significantly erodes wealth.
Scenario 2: Invest through individual brokerage accounts
Each family member invests their portion of proceeds individually through brokerage accounts at UBS, HSBC, or DBS.
Tax treatment:
Singapore tax residents: Singapore does not tax capital gains, and dividend income from Singapore companies is generally tax-exempt. However, foreign dividend income (e.g., dividends from US stocks) may be taxable depending on circumstances.
Non-Singapore tax residents: If family members relocate to Australia, UK, or other jurisdictions, investment income becomes taxable at personal income tax rates (often 30-45%).
Individual accounts also lack asset protection, succession planning tools, and consolidated wealth management.
Problem 2: Succession and Estate Planning
Mr and Mrs Tan Senior (Generation 1) wanted to transfer wealth to their children and grandchildren gradually over 20-30 years, avoiding sudden wealth transfer at death that could trigger estate taxes, family disputes, and poor financial decision-making by younger beneficiaries.
Traditional structures (individual ownership, standard corporate entities) do not facilitate staged wealth transfer with governance controls.
Problem 3: Wealth Fragmentation Across Three Generations
With seven grandchildren and three adult children, the family risked wealth fragmentation (each family member managing their portion independently, leading to inconsistent investment strategies, duplicated advisory fees, and loss of collective negotiating power with private banks).
The family wanted a centralised structure that consolidated investment management whilst allowing individual family members to draw income as needed.
Related reading: Many families also consider offshore holding structures in BVI or Cayman Islands to layer asset protection alongside tax efficiency. The Tan family evaluated this option but chose a pure Singapore structure for simplicity.
The Solution: Singapore Single Family Office with 13O and 13U Tax Exemptions
In 2020, the Tan family engaged a Singapore wealth advisory firm to design a Single Family Office (SFO) structure that addressed all three problems.
Structure Overview
Layer 1: Tan Family Office Pte Ltd (Singapore)
The family established Tan Family Office Pte Ltd, a Singapore private limited company that serves as the fund manager.
Ownership and governance:
Shareholders: Mr Tan Senior (60%), the three adult children (40% collectively)
Board of directors: Mr Tan Senior (Chairman), two adult children (directors), one independent director (experienced wealth adviser)
Day-to-day management: Hired a Chief Investment Officer (CIO) and two investment analysts as full-time employees
Regulatory status:
Tan Family Office applied for and received an exemption from holding a Capital Markets Services (CMS) licence under the Securities and Futures Act (SFA). The Monetary Authority of Singapore (MAS) grants exemptions to fund managers who manage assets solely for family members (defined as direct lineal descendants of a single ancestor and their spouses).
Layer 2: Tan Family Fund (Singapore Variable Capital Company - VCC)
The family established a Variable Capital Company (VCC) structure as the fund vehicle holding the USD 180 million in investable assets.
What is a VCC?
Singapore introduced the VCC structure in 2020 as a fund vehicle designed specifically for investment funds. A VCC can be set up as a single fund or an umbrella fund with multiple sub-funds, each with segregated assets and liabilities.
Why the Tan family chose VCC over a standard Pte Ltd:
Tax efficiency:VCCs qualify for Section 13O and 13U tax exemptions if they meet MAS criteria.
Flexible capital structure:VCCs can issue and redeem shares at net asset value (NAV), making it easier for family members to subscribe or redeem capital without complex corporate restructuring.
Segregated sub-funds:The family could later create separate sub-funds for different investment strategies (e.g., one sub-fund for public equities, another for private equity, another for real estate) whilst maintaining a single legal entity.
Ownership:
The VCC issued shares to Mr Tan Senior (60%) and the three adult children (40% collectively), mirroring the original business exit proceeds.
Fund manager:
Tan Family Office Pte Ltd was appointed as the fund manager, responsible for investment strategy, portfolio construction, and execution.
Related reading: Family offices expanding regionally often need to hire investment analysts and compliance professionals across Asia. See how dual employment structures allow you to deploy staff in Hong Kong, Malaysia, or Indonesia without establishing subsidiaries.
Qualifying for Section 13O and 13U Tax Exemptions
Singapore offers two primary tax exemption schemes for funds managed by family offices.
Section 13O: Singapore Resident Fund Scheme
Key requirements (updated as of January 2025):
The MAS revised the Section 13O criteria effective from 1 January 2025.
Assets under management (AUM):
Minimum SGD 5 million in Designated Investments (DI) at the end of each financial year
Previously, the requirement was SGD 20 million measured against total net asset value. From 2025, AUM is measured only against Designated Investments.
Singapore tax residency:
The fund must be a Singapore tax resident (incorporated in Singapore or managed and controlled in Singapore).
Fund manager requirements:
The fund must be managed by a Singapore-based fund manager that is either MAS-licensed or exempt
Minimum of two investment professionals employed in Singapore, at least one of whom is not a family member.
Designated Investments:
The fund must invest in eligible asset classes including public equities, bonds, private equity, hedge funds, derivatives, foreign exchange contracts
Singapore immovable property (real estate) is excluded from Designated Investments.
Local Business Spending (LBS):
From January 2025, LBS follows a tiered structure based on AUM:
AUM less than SGD 250 million: Minimum SGD 200,000 annually in local business spending
AUM between SGD 250 million and SGD 2 billion: Minimum SGD 300,000 annually
AUM exceeding SGD 2 billion: Minimum SGD 500,000 annually
Local business spending includes salaries paid to Singapore-based employees, office rent in Singapore, professional fees (audit, tax, legal), and technology subscriptions.
Tax benefit:
Funds that qualify for Section 13O receive full tax exemption on specified income from designated investments. This includes:
Dividends from portfolio companies
Interest income
Capital gains (if any, though Singapore generally does not tax capital gains)
Profits from foreign exchange and derivatives trading.
The Tan Family's 13O application (2020):
Tan Family Fund (VCC) applied for Section 13O tax exemption shortly after establishment in 2020.
How they satisfied requirements:
AUM threshold:USD 180 million far exceeded the SGD 20 million minimum applicable at the time (pre-2025 rules).
Singapore tax residency:The VCC was incorporated in Singapore and managed by Tan Family Office Pte Ltd, which is Singapore-based.
Fund manager exemption:Tan Family Office received MAS confirmation that it qualified for CMS licence exemption (managing family assets only).
Investment professionals:Employed three full-time staff (CIO, two analysts), exceeding the minimum of two professionals.
Designated Investments:The fund's investment policy excluded Singapore real estate, focusing on regional equities, US/EU public markets, private equity funds, and hedge funds.
Local Business Spending:Tan Family Office employed three full-time staff with total annual salaries exceeding SGD 500,000, plus office rent (SGD 120,000 annually), audit and tax compliance fees (SGD 80,000 annually), and investment advisory fees to external consultants (SGD 150,000 annually). Total local spending: approximately SGD 850,000 annually, well above the SGD 200,000 threshold.
Outcome:
MAS approved the Section 13O application in mid-2020. Tan Family Fund received tax exemption on all specified income from designated investments effective from 2020 onwards.
Section 13U: Enhanced-Tier Fund Tax Exemption Scheme
Key requirements (updated as of January 2025):
Section 13U offers the same tax benefits as 13O but with higher thresholds.
Assets under management:
Minimum SGD 50 million in Designated Investments at the end of each financial year (increased from total AUM to DI-only measurement from January 2025).
Investment professionals:
Minimum of three investment professionals employed in Singapore, at least one of whom is not a family member.
Local Business Spending:
The tiered LBS structure applies to Section 13U as well:
AUM less than SGD 250 million: Minimum SGD 200,000 annually
AUM between SGD 250 million and SGD 2 billion: Minimum SGD 300,000 annually
AUM exceeding SGD 2 billion: Minimum SGD 500,000 annually
Note that prior to January 2025, Section 13U required a flat SGD 500,000 minimum LBS regardless of AUM. The new tiered structure makes 13U more accessible for smaller family offices.
Tax benefit:
Same as Section 13O (full exemption on specified income from designated investments). Section 13U also allows funds to access a broader range of offshore structures if desired.
The Tan Family's 13U upgrade (2022):
By 2022, Tan Family Fund's AUM had grown to USD 285 million (through investment returns and additional capital contributions from family members).
The family's advisers recommended upgrading from Section 13O to Section 13U for two reasons:
Future offshore flexibility:Section 13U allows the fund to establish offshore feeder structures if family members later relocate outside Singapore and prefer to hold fund interests through non-Singapore entities.
Regulatory credibility:Section 13U's higher thresholds signal greater substance and sophistication to private banks and investment counterparties.
How they satisfied 13U requirements (2022):
AUM threshold:USD 285 million exceeded SGD 50 million.
Investment professionals:By 2022, Tan Family Office had expanded to six full-time staff (CIO, CFO, three analysts, one compliance officer), exceeding the minimum of three professionals.
Local business spending:Annual salaries exceeded SGD 900,000. Combined with office, audit, legal, and advisory fees, local spending exceeded SGD 1.2 million annually, well above the SGD 500,000 threshold applicable at the time (pre-2025 rules).
Outcome:
MAS approved the Section 13U upgrade in 2022. Tan Family Fund transitioned from 13O to 13U exemption, maintaining zero tax on investment income whilst gaining additional structural flexibility.
Investment Strategy and Performance (2020-2025)
Investment Allocation and Governance
Tan Family Office implemented a diversified investment strategy designed to generate 6-8% annual returns whilst preserving capital.
Asset allocation (2020-2025):
Public equities (40%):Global equity portfolios allocated across Singapore (10%), Asia ex-Singapore (15%), US (10%), Europe (5%). Focus on blue-chip dividend-paying stocks and index ETFs
Fixed income (25%):Investment-grade corporate bonds, Singapore Government Securities (SGS), high-quality Asian bonds
Private equity and venture capital (20%):Co-investments with regional PE funds (Southeast Asia focus), direct investments in family-owned businesses seeking growth capital
Hedge funds and alternative strategies (10%):Multi-strategy hedge funds, long-short equity funds, event-driven strategies
Cash and cash equivalents (5%):Short-term deposits, money market funds for liquidity
All investments qualified as Designated Investments under Section 13U. The family deliberately avoided Singapore immovable property to preserve tax exemption eligibility.
Investment committee structure:
The family established a quarterly Investment Committee meeting where the CIO presented performance reports, proposed new investments, and reviewed portfolio risk.
Attendees:
Mr Tan Senior (Chairman, final decision authority on major allocations)
Two adult children (board members, active participants in investment decisions)
CIO (presented recommendations and executed approved strategies)
External investment adviser (independent wealth adviser providing second opinions on major decisions)
This structure balanced professional investment management (CIO and team) with family oversight and governance.
Performance Results (2020-2025)
Assets under management growth:
2020 (start):USD 180 million
2021:USD 215 million (19.4% return, benefiting from post-COVID equity market recovery)
2022:USD 285 million (32.6% return, driven by strong private equity exits and regional equity outperformance)
2023:USD 318 million (11.6% return, more subdued as interest rates rose and equity volatility increased)
2024:USD 375 million (17.9% return, benefiting from US tech rally and Singapore REIT recovery)
2025 (projected):USD 432 million (15.2% return year-to-date)
Aggregate growth (2020-2025):USD 180 million to USD 432 million represents 140% increase (compound annual growth rate of approximately 19%).
Distribution to family members (2020-2025):
The family drew income from the fund conservatively, prioritising wealth compounding over current consumption.
Annual distributions:
2020-2021:Zero distributions (family members lived off existing cash reserves and other income sources)
2022:USD 5 million distributed to Mr and Mrs Tan Senior (for retirement living expenses)
2023:USD 6 million distributed (USD 4 million to Generation 1, USD 2 million to Generation 2)
2024-2025:USD 8 million annually distributed
Total distributions (2020-2025):USD 27 million.
Net AUM after distributions:USD 432 million (end-2025) includes reinvested returns minus distributions.
Tax Savings from 13O and 13U Exemptions (2020-2025)
The Section 13O and 13U exemptions delivered significant tax savings compared to alternative structures.
Tax Treatment Under 13O/13U Structure
Investment income (2020-2025):
The fund earned income from dividends, interest, and realised capital gains.
Estimated aggregate investment income (2020-2025):
Dividends from public equities: USD 18 million
Interest from bonds: USD 12 million
Realised capital gains from equity sales and private equity exits: USD 95 million
Total investment income: USD 125 million
Tax treatment under 13O/13U:
Singapore corporate tax:Zero (fully exempt under Section 13O and 13U).
Withholding tax on foreign dividends and interest:Some foreign jurisdictions impose withholding tax at source (e.g., US dividends subject to 30% withholding unless reduced by tax treaty). Singapore-US tax treaty reduces US withholding tax to 15% on dividends. The fund paid approximately USD 2.7 million in foreign withholding taxes over five years (not recoverable, but unavoidable regardless of structure).
Net Singapore tax paid (2020-2025):Zero.
Comparison: Tax Under Alternative Structures
Scenario 1: Standard Singapore Pte Ltd (no tax exemption)
If the family had invested through a standard Singapore private limited company without Section 13O/13U exemption:
Tax treatment:
Singapore corporate tax on investment income: 17%
Estimated tax on USD 125 million investment income: USD 21.25 million.
Tax saved by using 13O/13U structure (2020-2025):USD 21.25 million.
Scenario 2: Individual brokerage accounts (personal income tax)
If family members had invested individually through brokerage accounts:
Tax treatment (if Singapore tax residents):
Capital gains: Generally not taxable in Singapore
Dividend income: Tax-exempt if from Singapore companies; foreign dividends may be taxable depending on circumstances
Estimated aggregate personal tax (conservative estimate, assuming some foreign dividend taxation): USD 5-8 million over five years.
Tax saved by using 13O/13U structure:Approximately USD 5-8 million.
Succession Planning and Wealth Transfer (2020-2025)
Beyond tax savings, the SFO structure enabled the family to execute a multi-generational succession plan.
Generation 1 to Generation 2 Transfer (2022-2024)
Objective:Mr and Mrs Tan Senior (Generation 1) wanted to transfer ownership gradually to their three adult children (Generation 2) whilst retaining control and income rights during their lifetimes.
Mechanism (2022-2024):
The VCC issued two classes of shares:
Class A shares:Voting rights and income rights (dividends). Held by Mr and Mrs Tan Senior (Generation 1)
Class B shares:Economic rights only (capital appreciation), no voting rights, no current income rights. Issued to the three adult children (Generation 2).
Transfer process (2022-2024):
Over three years, Mr and Mrs Tan Senior transferred 30% of their Class A shares to their children, converting those shares into Class B shares upon transfer. This allowed Generation 1 to retain control (70% voting rights) whilst gradually transferring economic ownership to Generation 2.
Tax treatment of transfer:
Singapore does not impose gift tax or inheritance tax, so the share transfers from Generation 1 to Generation 2 occurred without tax liability.
Generation 2 to Generation 3 Transfer Planning (2025 onwards)
The family is now planning the next phase: transferring wealth from Generation 2 (adult children, aged 48-55 in 2025) to Generation 3 (grandchildren, aged 15-31 in 2025).
Challenge:Some grandchildren are still young (teenagers and early 20s) and not ready to manage significant wealth independently.
Planned mechanism (2025-2030):
The family will establish a discretionary trust structure where:
The three adult children (Generation 2) transfer a portion of their VCC shares into a Singapore trust
A professional trustee (licensed trust company) holds legal ownership of the shares
The grandchildren (Generation 3) are named as beneficiaries
The trustee has discretion to distribute income and capital to grandchildren based on predetermined criteria (e.g., completing university, reaching age 25, demonstrating financial responsibility).
This structure delays direct ownership by grandchildren whilst ensuring wealth is preserved and professionally managed until they are ready.
Operational Substance and Compliance (2020-2025)
To maintain Section 13O and 13U eligibility, the family ensured the SFO maintained genuine operational substance in Singapore.
Employment and Office Presence
Staff (2020-2025):
2020-2021:Three full-time employees (CIO, two analysts)
2022-2023:Five full-time employees (added CFO and compliance officer)
2024-2025:Six full-time employees (added third analyst)
All investment professionals were based in Singapore and conducted investment analysis, portfolio management, and decision-making from the Singapore office.
Office location:
Tan Family Office maintained a physical office in Singapore's Raffles Place financial district, leasing approximately 1,500 square feet.
Annual local business spending (2020-2025):
Salaries: SGD 900,000-1,200,000 annually
Office rent: SGD 120,000 annually
Audit and tax compliance: SGD 80,000 annually
Legal and advisory fees: SGD 100,000-150,000 annually
Technology and data subscriptions (Bloomberg, FactSet): SGD 60,000 annually
Total: SGD 1,260,000-1,610,000 annually(exceeding all applicable LBS thresholds under both pre-2025 and post-2025 rules).
Investment in Designated Investments
MAS requires that family office funds maintain a minimum threshold of assets invested in Designated Investments to qualify for tax exemptions.
Designated Investments include:
Publicly listed equities
Bonds and debt securities
Units in collective investment schemes (mutual funds, ETFs)
Private equity investments
Hedge fund investments
Foreign exchange contracts and derivatives.
Excluded investments:
Singapore immovable property (residential, commercial, industrial real estate)
Shares in Singapore-incorporated companies that derive more than 50% of value from Singapore immovable property.
Tan Family Fund compliance (2020-2025):
The fund maintained 95% of assets in Designated Investments throughout the entire period. The family deliberately avoided Singapore real estate to preserve 13U eligibility.
Annual Reporting and Audits
Requirements:
Annual audit by a Singapore-licensed audit firm
Annual submission of audited financial statements to MAS
Annual tax filing with Inland Revenue Authority of Singapore (IRAS), claiming Section 13U tax exemption
From October 2024, new requirement to submit screening reports confirming compliance with exemption criteria
Quarterly reporting to family members on investment performance and compliance status.
Compliance track record (2020-2025):
Zero compliance breaches. The family maintained full eligibility for Section 13O and 13U throughout the entire five-year period.
Lessons Learned: The Tan Family's Reflections
Lesson 1: Substance Requirements Are Real, Not Bureaucratic Hurdles
"We initially thought the local business spending requirement was just a box-ticking exercise. But MAS audits substance carefully. They want to see genuine employment, genuine office presence, genuine investment decision-making in Singapore. We maintained detailed records showing that our CIO and analysts conducted all investment analysis in Singapore, attended quarterly Investment Committee meetings in our Singapore office, and documented every investment decision. That documentation protected us when MAS conducted a routine audit in 2023".
Lesson 2: Variable Capital Company Structure Provides Flexibility
"The VCC structure was critical for succession planning. When we wanted to issue Class A and Class B shares with different voting and income rights, the VCC allowed us to do that cleanly. A standard Pte Ltd would have required complex shareholders' agreements and restructuring. The VCC's flexible capital structure made generational transfers simple".
Lesson 3: Professional Management Is Non-Negotiable
"Some families try to save expenses by managing investments themselves without hiring a CIO or analysts. That might work for small portfolios, but at USD 180 million, we needed professional management. Our CIO brought institutional investment discipline, risk management frameworks, and access to private equity deals we could never have accessed as individual investors. The CIO's salary was our single largest expense, but the investment outperformance more than justified it".
Lesson 4: Tax Savings Compound Dramatically Over Time
"In Year 1, saving 17% corporate tax felt meaningful but not transformational. By Year 5, when our AUM had grown to USD 432 million, the cumulative tax savings exceeded USD 21 million. That USD 21 million stayed invested, compounded, and contributed to our overall wealth growth. Without Section 13U, we would have paid that USD 21 million to IRAS, and our 2025 AUM would be closer to USD 360 million instead of USD 432 million".
Lesson 5: Family Governance Must Be Formalised Early
"We established our Investment Committee and quarterly meeting cadence in 2020, before any family disputes arose. That discipline prevented conflicts later. When one family member wanted to invest heavily in cryptocurrency in 2021, the Investment Committee structure allowed us to discuss the proposal rigorously, assess risk, and ultimately allocate only 2% of the portfolio to crypto. Without that governance framework, individual family members might have made impulsive decisions that jeopardised the entire portfolio".
Lesson 6: Updated 2025 Requirements Made Compliance Easier
"The January 2025 changes to MAS requirements actually benefited us. Previously, Section 13U required a flat SGD 500,000 in local business spending regardless of AUM. The new tiered structure means families with AUM below SGD 250 million only need SGD 200,000, making 13U more accessible. For us, with AUM over SGD 250 million but under SGD 2 billion, the SGD 300,000 threshold is easier to meet than the old flat SGD 500,000. Also, measuring AUM based only on Designated Investments (not total NAV) gives us more flexibility to hold cash reserves without affecting compliance".
Ready to explore whether a Singapore Family Office structure fits your wealth preservation goals?We walk you through MAS requirements, VCC setup, and succession planning options tailored to your family.
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When Does a Singapore Single Family Office Make Sense?
Not every family needs an SFO. Here's how to assess fit.
You Likely Benefit If:
You have at least USD 20-30 million in investable assets (the threshold where SFO economics and compliance requirements become justified, given the minimum SGD 5 million DI requirement for Section 13O and SGD 50 million for Section 13U)
Your family spans multiple generations and you need succession planning tools beyond simple wills
You want centralised investment management with professional oversight (CIO, analysts, compliance officer)
You are committed to Singapore as a base for wealth management (MAS requires genuine Singapore substance, employment, and office presence)
You want zero Singapore tax on investment income and capital gains
Your investment strategy focuses on global equities, bonds, private equity, hedge funds (avoiding Singapore immovable property, which is excluded from Designated Investments)
You value regulatory clarity and prefer MAS's structured framework with published guidelines
Simpler Alternatives May Work If:
Your investable assets are below USD 20 million (individual brokerage accounts or multi-family office platforms may be more economical)
You prefer complete investment autonomy without family governance structures
You want to invest heavily in Singapore immovable property (which is ineligible for 13O/13U exemptions, though you could establish a separate non-exempt entity for property investments)
Your family members are geographically dispersed across multiple tax jurisdictions and cannot consolidate in Singapore
You want a simpler approval process with less stringent employment and local spending requirements (Hong Kong's Family Investment Holding Vehicle may be an alternative)
Singapore vs Hong Kong for Single Family Offices
Families often compare Singapore and Hong Kong as family office hubs.
Singapore Advantages
Clearer tax exemption frameworks:Section 13O and 13U provide structured, predictable tax exemptions with published MAS guidelines, updated requirements effective January 2025, and transparent compliance criteria.
Political stability:Singapore's stable political environment and transparent regulatory framework appeal to families seeking long-term wealth preservation.
Double tax treaty network:Singapore has extensive tax treaties that reduce withholding taxes on foreign investment income.
VCC structure:Singapore's VCC offers flexible capital structures ideal for multi-generational succession planning.
Hong Kong Advantages
Simpler approval process:Hong Kong's Family Investment Holding Vehicle (FIHV) tax exemption does not require local incorporation (unlike Singapore's 13O/13U), offering more flexibility.
Lower operational requirements:Hong Kong requires investment professionals but does not mandate the same level of local business spending as Singapore's tiered LBS structure.
Gateway to China:Families with significant mainland China business ties prefer Hong Kong for proximity and cultural familiarity.
The Tan Family chose Singapore because:
They valued regulatory clarity and preferred MAS's structured framework over Hong Kong's more flexible (but less predictable) approach
Their investment focus was pan-Asian and global, not China-specific, so Hong Kong's mainland gateway advantage was less relevant
They planned to remain Singapore tax residents long-term, making Singapore the natural base
The VCC structure's flexibility for succession planning was critical to their multi-generational wealth transfer strategy
Final Thoughts
For ultra-high-net-worth families like the Tans who have accumulated significant wealth through business exits or generational transfer, a Singapore Single Family Office with Section 13O and 13U tax exemptions offers a compelling combination of tax efficiency, succession planning tools, and professional investment management.
The structure preserved USD 21 million in tax over five years whilst enabling seamless wealth transfer across three generations. The January 2025 updates to MAS requirements (tiered LBS structure, AUM measured only against Designated Investments) make the 13O and 13U schemes more accessible and flexible for families of varying sizes.
Related case studies:
How Singapore firms use BVI and Cayman holding structures to layer asset protection alongside family office tax efficiency
Dual employment structures for family offices hiring staff across Asia without establishing regional subsidiaries
Considering a Singapore Family Office with 13O or 13U tax exemption? We help families navigate MAS requirements, structure VCCs for multi-generational succession, and maintain compliance whilst growing wealth.
Book your 15-minute structure consultation to see Singapore vs Hong Kong vs offshore options side-by-side.
