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Success Cases: How to make a family "rich for three generations" and achieve wealth inheritance and appreciation?

Most middle and high-income individuals who have accumulated certain assets and have rich business management experience in China choose Singapore as their destination when planning to go abroad. Through the Family Office, they can obtain overseas status and realize the inheritance of family wealth. So how do they do it?

Why is Singapore Home Office popular?

As one of the world’s free economies, Singapore has always been a unique destination for high-net-worth individuals. The founder of Go Global Gem, the founder of Dyson, the co-founder of Google, and many other rich people have chosen to set up family offices in Singapore. They attach great importance to these advantages of Singapore:

1. Inheritance of family wealth

Establish a long family tradition through the family office, and realise cross-generation inheritance, preservation and appreciation of family wealth and wealth management. Help your children grasp the concept of wealth management as quickly as possible by putting them in the family office, so that family assets can be passed on smoothly.

2. Global asset allocation

Singapore has a well-established financial system and no exchange controls. Singapore has been named the world’s free economy in the 2020’s Index of Economic Freedom. This makes Singapore a good choice for many high-net-worth households to globalize their asset allocation and increase their value.

3. Overseas identity planning

After setting up a family office in Singapore, the applicant can get her/his family members to come to Singapore by applying for EPs for them; After that, she/he can apply for the Dependant Passes (DP) for the family through EP. Thereafter, the applicant may apply for Permanent Residency (PR) statuses and eventually obtain Singapore Citizenship for future generations.

4. Better tax planning

Fund companies set up by family offices are subject to the tax exemption scheme of Singapore funds (13O/13U), which applies exemptions for certain investment income from the 17% corporate income tax.

Picture from unsplash.com

What’s the difference between 13O and 13U?

The Family Office is a full range of wealth management services for high-net-worth clients.

There are two common family office forms: 13O and 13U. The biggest difference between the two is: first, the capital threshold; 13O is S$10 million, and 13U is S$50 million. Second, 13O can apply for two EPs, and 13U can apply for three EPs.

The applicant can apply for their overseas identities according to her/his own situation. Of course, there are many details should pay attention to. Please contact your account manager and we will provide you with a one-to-one customized solution.

1. 13O policy adjustment
  • Since 18 April 2022, the 13O application threshold has been adjusted to a minimum Asset Under Management (AUM) of S$10 million, and the asset management scale is increased to S$20 million within two years;
  • Must employ at least 2 investment managers, either family members or non-family members;
  • The cost requirement of 13O structure is S$200,000 when the AUM scale is less than S$50 million, S$500,000 when the AUM scale is between S$50 million and S$100 million, and S$1 million when the AUM scale is more than S$100 million;
  • At least 10% (or S$10 million, whichever is lower) of the family office funds need to be invested in local investment products in Singapore.
Picture from unsplash.com

2. 13U policy adjustment
  • The 13U application threshold of S$50 million remains unchanged;
  • At least 3 investment officers shall be hired. If this requirement cannot be met at the time of application, they shall meet the requirement within 1 year (one of them must be a non-family member);
  • The cost of 13U structure is required to be S$500,000 when the AUM scale is less than S$50 million, S$500,000 when the AUM scale is between S$50 million and S$100 million, and S$1 million when the AUM scale is more than S$100 million. ;
  • At least 10% (or S$10 million, whichever is lower) of the family office funds must be invested in local investment products in Singapore.

Mr. Z got his EP in 4 working days

1. Mr. Z’s overseas planning story

Mr. Z was previously a senior technology executive of Ali, and later served as the Chief Technical Officer, partner and other vital positions in a number of domestic technology companies. While making strategic plans for the overall technical architecture of the enterprise, Mr. Z is also planning for his overseas identity.

Data show that semiconductors are an important pillar industry in Singapore, accounting for 58% shareholding of the electronics manufacturing industry, which has become a key industry in the global semiconductor industry. Singapore’s precision engineering industry has grown to include about 2,700 precision engineering companies. As a result, Singapore has become the regional headquarters and a significant research and development center for many multinational corporations.

Attracted by these advantages, Mr. Z decided to move to Singapore, aiming to develop his career and to inherit and increase his wealth by establishing a family office.

2. EP obtained within 4 working days

Through the recommendation of friends in the industry, Mr. Z has established a profound cooperative relationship with Go Global Gem. After learning about the needs of Mr. Z and his family, Go Global Gem developed a detailed family office solution for him.

It only took 4 working days for Mr. Z to get the EP approval letter. Soon, he will arrive in Singapore with his family and to start a new life.

Picture: Mr. Z was successfully approved for EP, and those who steal pictures will be prosecuted!

How to set up a family office

To set up an office in Singapore, there are two stages:

1. Architecture design phase

Single family office architecture design:

  • We will design a commercially viable, tax-compliant single family office structure for you from risk management, legal compliance (including licensing requirements) and tax efficiency perspective;
  • Review legal documents related to the implementation of the structure from a tax and compliance perspective to ensure that the implementation of the structure meets the expected tax impact of the initial phase;
  • Seek legal advice from a leading law firm to prove that money managers are exempt from holding licenses to manage funds under the Securities and Futures Act.

Picture from unsplash.com

2. Implementation phase
  • Application for tax incentives;
  • Application for exemption of CMS license;
  • Investment management agreement template;
  • Foreign Account Tax Compliance Act (FATCA) & Common Filing Standard (CRS) Entity classification;
  • New account registration of FATCA & CRS;
  • Company registration;
  • Application for Work Permit;
  • Provide employment contract templates;
  • Open a bank account;

3. Extended service
  • Trust consultation and establishment, including business renewability and marriage protection planning;
  • Provide suggestions on asset transfer;
  • Structure and establishment of variable capital company (VCC);
  • Company registration and routine business secretary services;
  • Provide locally nominated directors.

Picture from unsplash.com

What else would you like to know about family offices? Don’t hesitate to get in touch with us or leave us a comment. We will continuously bring you more immigration and overseas asset allocation information.

If you have any questions, please feel free to contact:Ho Kah Chuan
Email: kahchuanho@goglobalgem.com