As of June 2022, about 1,400 Singaporeans and permanent residents have been employed by Single Family Offices (SFOs) that have applied for and been awarded tax incentives under the Sections 13O and 13U scheme. About 900 of these jobs were created in just the last three years.
Senior Minister Tharman Shanmugaratnam said this on behalf of the Prime Minister to the parliamentary questions filed by Mr Gan Thiam Poh (PAP-Ang Mo Kio GRC) and Ms Mariam Jaafar (PAP-Sembawang GRC) regarding the impact of family offices on Singapore’s economy.
Mr Gan asked for data on the number of jobs created for Singaporeans and permanent residents as a result of the family offices scheme, as well as the income distribution of these individuals. Meanwhile, Ms Jaafar queried about a potential study to quantify the contributions of family offices set up in the past three years to the Singapore economy.
In his reply on Thursday (6 Jul), Mr Tharman further added that two-thirds of the Singaporeans and PRs employed by SFOs under the tax incentive schemes earned more than S$5,000 per month, over 400 earned between S$2,000 and S$5,000 per month, and fewer than 50 earned less than S$2,000 per month.
SFOs, set up by individual investors to manage their family assets, are not required to be licensed by the Monetary Authority of Singapore (MAS) since they do not manage third-party assets.
Mr Tharman explained that these entities contribute to the economy in two key ways: by creating jobs directly and generating revenue for external service providers, such as private banks and legal and tax firms.
Recent changes to the tax incentives for SFOs announced by the MAS aim to encourage these entities to channel more of their managed wealth towards local enterprises, sustainable development, climate-related investments, and charitable contributions.
However, MAS does not currently have comprehensive data on the full extent of SFOs’ contributions, but plans to conduct surveys to better understand these effects.
The Economic Development Board (EDB) administers the Global Investor Programme (GIP), which grants PR status to eligible global investors who aim to drive their business and investment growth from Singapore.
Since 2020, about 30 SFO owners have been supported under the GIP based on their investment track records and the projected size and experience of their Singapore team.
Applications are assessed based on factors including the ability to contribute to Singapore, create jobs, and integrate into the community.
Mr Tharman clarified that tax incentive schemes for SFOs do not accord PR or citizenship status to the foreign owners setting up SFOs in Singapore. He also reassured that high net worth and setting up SFOs in Singapore do not guarantee Singaporean citizenship and PR status.
Singapore currently hosts about 700 family offices, up from 400 in late 2020, and has seen a sevenfold increase since 2017. This surge is credited to the rapid growth of private wealth in Asia and increasing demand from Europe and America.