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Singapore’s Corporate Account Closures
  • NEWSLETTER,SINGAPORE

Why Corporate Accounts in Singapore Face Closure and How to Stay Secure

As Singapore strengthens its position as a global financial hub, banks have significantly raised the bar on regulatory compliance, anti-money laundering (AML), and risk management standards. In recent years, this tightening of banking norms has resulted in an increasing number of forced closures of corporate bank accounts, especially those held by overseas or cross-border entities.

Notably, even longstanding domestic accounts have not been immune to these closures. Often, businesses receive no prior warning, making the account termination sudden and highly disruptive. In some cases, companies are left scrambling to find alternatives, leading to delays in payments, payroll, and day-to-day operations.

Why This Matters

The closure of a corporate bank account can jeopardise operational continuity, erode client and vendor confidence, and expose businesses to financial and reputational risks. It is therefore imperative for companies, especially foreign-owned entities operating in Singapore, to proactively understand the common red flags and adopt effective risk management strategies to safeguard their accounts.

Why Are Corporate Bank Accounts in Singapore Being Shut Down?

Singaporean banks are becoming increasingly selective in maintaining client relationships, especially when perceived risk outweighs potential returns. Below are the most common reasons why corporate accounts are being terminated:

1. Inactivity in Accounts or Low Usage

Corporate bank accounts that remain idle or record minimal activity for an extended period of time are often flagged and eventually closed.

2. Non-Compliance with AML/CFT Norms

Unclear fund sources, ties to sanctioned jurisdictions, or irregular transactions can breach AML (Anti-Money Laundering) and CFT (Combating the Financing of Terrorism) laws, resulting in account termination.

3. Delayed or Missing Documentation

Failure to provide updated business records, financials, or shareholder/director information when requested by the bank can put your account at risk.

4. Suspicion of Financial Crime

Bank accounts of businesses in Singapore can also be closed due to any perceived connection to money laundering, fraudulent, or illegal activities.

5. Opaque Ownership or Structure

Businesses that frequently change their shareholders or directors, or have unclear control structures, raise red flags for compliance teams.

6. Suspicious Transaction Behaviour

Irregular fund movements, particularly large or inconsistent transactions, can invite trouble, leading to bank account closure in Singapore.

7. Account Managed by a Third Party

If your bank account is operated by intermediaries or parties not formally tied to your company, it may be terminated due to transparency concerns.

8. High-Value Transactions with High Risk Jurisdictions

Certain jurisdictions across the world have been classified as high-risk. Frequent transactions with these areas are considered a red flag and can lead to scrutiny and closure.

9. Outstanding Tax or Legal Issues

Non-filing of annual returns, tax defaults, or ongoing litigation may lead banks to reassess and close their relationship with a client.

10. Regulatory Breaches

Non-compliance with local laws, particularly those involving financial reporting or disclosure, may lead to the suspension of your bank account.

11. Changes in Internal Policies

Sometimes, even a change in the internal strategy of a bank in Singapore, or its risk appetite can make your account non-compliant with their revised standards.

12. Frequent Transfers with Personal Accounts

Mixing corporate and personal finances erodes transparency and raises questions about the legitimacy of business operations, triggering compliance concerns.

How to Protect Your Corporate Bank Account in Singapore

While external regulations are beyond a business’s control, proactive management and sound banking practices can significantly reduce the risk of forced account closures.

Here’s how to stay compliant and safeguard your account:

  • Keep the account active: Make sure to maintain a baseline of legitimate activity even when business is slow to avoid the account becoming dormant.
  • Stay compliant to AML and CFT laws: All your transactions should be documented properly and aligned with the established legal and ethical standards in Singapore. Avoid dealings with high-risk jurisdictions where possible.
  • Respond to banks promptly: Keep your bank updated with any changes in shareholders, directors, or business activity, and respond to document requests on time.
  • Maintain transparency: Establish a clear business model and structure. Notify your bank about the new lines of business or corporate changes.
  • Monitor legal obligations: Stay informed about compliance requirements and updates from local regulatory authorities in each jurisdiction.
  • Engage with a Compliance Advisor: Work with a knowledgeable advisor who understands evolving local and cross-border banking expectations.

Diversify Your Corporate Accounts in Singapore to Mitigate Risk

One of the smartest risk management strategies is to maintain at least two active corporate bank accounts. Here’s why this approach is highly recommended.

In case the only corporate bank account of your business gets closed, you may have just 30 days to find a new one. However, it generally takes 6 to 8 weeks to open a new business account in Singapore. This delay could severely disrupt operations, payroll, vendor payments, or customer transactions.

Additionally, a secondary corporate bank account helps you maintain your business continuity. Many digital banking platforms today allow companies to open accounts remotely, providing flexibility and speed, particularly for global operations.

Need Help Managing Global Banking Risks in Singapore?

Global businesses operating in Singapore increasingly turn to specialist advisors like IMC Group to ensure banking compliance and manage risk effectively.

At IMC, we support our clients in:

  • Opening and maintaining multi-jurisdictional corporate bank accounts
  • Navigating KYC/AML compliance for global operations
  • Responding to banking and regulatory inquiries
  • Implementing sound governance frameworks

Whether you’re setting up a Singapore entity, restructuring an Investment Holding Company, or preparing for global expansion, we offer tailored banking and regulatory support to keep your operations resilient and compliant.

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Why High Net Worth Investors Trust Singapore Despite Rising Tariffs header
  • NEWSLETTER,SINGAPORE

How Singapore Retains HNW Investor Confidence with Rising Tariffs

At a time when global trade tensions are raging high and tariff regimes are rapidly evolving, Singapore continues to attract high-net-worth individuals. Those looking for stability in wealth management are consistently turning to Singapore, considering certain strategic benefits.

Looking broadly, the investment environment across the globe seems unpredictable. The US has imposed a baseline tariff of 10% on global imports, and sector-specific duties have soared up to 3,403.9%.

For HNWIs, institutional investors, and multi-generational wealth planners, this instability calls for a reassessment of safe jurisdictions. In this environment, Singapore emerges as a viable alternative. It is a preferred global hub for asset preservation, diversification, and long-term strategy. The rise in the number of single family office in Singapore further contributes to its stability and appeal.

Singapore – A Safe Harbour amid a Storm of Tariffs

In early April 2025, the trade disruptions announced had significant implications for major economies in Southeast Asia. During the 90-day suspension of reciprocal tariffs from May 14 to July 9, countries like Cambodia, Vietnam, and Thailand still faced potential tariffs of up to 49%, 46%, and 36%, respectively.

However, Singapore avoided such tariffs. Even with the blanket 10% tariff applied during this pause, exempted sectors like semiconductors and pharmaceuticals remain relatively protected.

These advantages of Singapore in wealth and infrastructure continue to outweigh short-term trade pressures.

Financial Stability Integrated into Policy and Trust

The enduring appeal of Singapore to HNWIs lies in its institutional resilience. Its AAA sovereign credit ratings across major international agencies set it apart, as many large economies face downgrades. Other factors that fuel the confidence of investors in Singapore include:
  • The political consistency of the country
  • Strategic fiscal policies
  • Healthy foreign exchange reserves

In Singapore, the legal and regulatory systems also strengthen the trust of investors. Based on English common law principles, disputes are resolved quickly in Singapore, often within 10 months.

The Monetary Authority of Singapore (MAS) is responsible for the regulatory oversight in the country. Thus, it seamlessly balances innovation with financial security. The compliance with FATF recommendations and international transparency standards like FATCA further reinforce its global credibility. The number of single family office in Singapore witnessed a phenomenal 42.9% increment, rising from 1,400 in 2023 to 2,000 in 2024. Established advisory partners like the IMC Group continue to offer valuable consultation solutions to family offices. The country is consolidating its position as a major wealth management hub in Asia.

A Tax Regime Tailored for Growth

The tax environment in Singapore is another critical aspect that draws global wealth.

  • With no capital gains tax, a territorial tax system, and an extensive network of Double Taxation Agreements (DTAs), private investors and family offices enjoy both clarity and efficiency.
  • As per Sections 13O and 13U of the Income Tax Act, qualifying funds, including those operated by a single family office in Singapore, can enjoy tax exemptions on specified income.
  • Singapore’s approach to OECD BEPS 2.0, through mechanisms like Refundable Investment Credits, demonstrates a controlled commitment to both compliance and competitiveness.

These policies encourage substantial economic activity. With mandated local spending and the employment of investment professionals, the country appeals to wealthy families and investors.

The favourable tax environment, along with strategic policy foresight, has been deepening the impact of family offices on private wealth management in Singapore. It empowers intergenerational planning and capital preservation across volatile market cycles.

A Government That Moves with the Market

The intelligible leadership of Singapore has responded decisively to evolving threats to trade. For instance, in April 2025, the Singapore Economic Resilience Taskforce (SERT) was established. It speaks a ton about Singapore’s proactive approach to policies.

The MAS has also allowed a calibrated adjustment in the exchange rate policy band. The goal is to balance inflation and economic activity. On the other hand, programs like the Enterprise Development Grant (EDG) and Productivity Solutions Grant (PSG) continue to help businesses transform.

Singapore, responding to US tariffs, has strengthened its focus on the ASEAN market. This region boasts a strong block of 680 million consumers, where businesses can carry out tariff-free trade through the ASEAN Free Trade Area (AFTA) and RCEP. These 27 FTAs reduce tariffs by up to 100% on eligible goods, a stark contrast to the Western markets.

Additionally, the technological innovation of Singapore gives it a strategic edge in terms of value proposition. MAS-led fintech sandboxes and AI integration in finance help the country come up with innovative digital wealth solutions.

Green finance is another rising trend in Singapore. Initiatives like the Green Finance Action Plan and the Green Finance Industry Taskforce (GFIT) support the country’s ambition to evolve into a sustainable finance hub in Asia.

Growing Reputation Among Global Wealth Leaders

The impact of family offices on private wealth management Singapore has been phenomenal, as evident from the rising number of family offices in recent years. Wealth managers prioritise the strategic value of Singapore due to geographic diversification and access to alternative investments.

Gold and real estate continue to be the safe options for investors. Many family offices are also reallocating capital from the US to Asia and Europe, considering the more predictable policymaking environments in these regions.

The IMF recently endorsed the banking sector in Singapore as “sound and resilient”. International credit agencies also maintained the AAA ratings for the country. Listing interest from Chinese firms in the Singapore Exchange also reflects growing confidence. Moreover, the S$5 billion equity market development program from MAS is further likely to strengthen liquidity.

Structures like the Variable Capital Company (VCC) have further empowered fund managers and single family office operations with a greater degree of flexibility and confidentiality. Along with established trust laws, these structures ensure that Singapore remains at the forefront of asset protection without compromising regulatory alignment.

Consultation for Single Family Offices in Singapore

In the face of rising global tariffs, Singapore is not merely surviving, but flourishing. With prudent governance, adaptable policies, tax reforms, and strategic global engagement, Singapore is the preferred hub for wealth creation in Asia.

Emerging financial organisations like single family offices can consult established professionals like the IMC Group for strategic advisory solutions. The trusted wealth advisory experts can help family offices expand in the evolving financial environment in Singapore.

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This is How Singapore is Attracting Global Investors By Offering Them Residency Header
  • NEWSLETTER,SINGAPORE

This is How Singapore is Attracting Global Investors by Offering them Residency

Singapore, the focal point of business in Asia, has been at the forefront of economic innovation. The country continues to be one of the most preferred places for doing business and attracts international investors through its structured pathways. One of the strategic approaches taken by the country to draw global investors is to offer them residency facilities.

Now, founders who establish a business in the city-state and contribute to the economy of Singapore can enjoy residency rights in the country. The stable economy, transparent legal system, and strategic access to global markets are some of the factors appealing to international investors.

The Singapore Global Investor Program allows foreign nationals to apply for permanent residence status. This initiative targets entrepreneurs and investors keen on making significant financial contributions to Singapore. Its primary goal is to attract affluent individuals looking to establish their homes in Singapore.

The EntrePass & Global Investor Program

Entrepreneurs looking to establish their presence in Singapore can choose any one of the two options designed by the government.
  1. The EntrePass
  2. The Global Investor Program

The EntrePass

The Singaporean government has designed the EntrePass for startup founders with innovative business ideas. Here’s how entrepreneurs can qualify for the EntrePass if meet both conditions:
  1. Applicants must register with ACRA as a Private Limited Company in Singapore (Pass holder must hold at least 30% of the registered company)
  2. Venture-backed or owns innovative technologies

    A company qualifies as venture-backed or possessing innovative technologies if it meets the following criteria:

    • Secured investment from entities such as government funding sources, venture capitalists, corporations, family offices, or angel investors.
    • Created, produced, or brought to market technology-based products, services, or platforms.
    • Obtained patents through an accredited national intellectual property authority.
    • Engages in active research collaborations with a research institution.

Typically, this process takes 8-12 weeks and involves multiple levels of evaluation.

The Global Investor Program

On the other hand, the government has designed the Global Investor Program(GIP) for seasoned investors and business leaders. For qualification, applicants need to demonstrate a strong track record of entrepreneurship and robust finances.

The Favorable Business Environment in Singapore

Singapore is currently placed in the top five countries in terms of ease of doing business. The low corporate tax rate of 17%, minimal restrictions, and streamlined regulations make it the perfect place for setting up an organisation.

In Singapore, startups benefit from generous tax exemptions during their first three years. Moreover, Under the Economic Expansion Incentives (Relief from Income Tax) Act (“EEIA”), the Minister for Trade and Industry has the authority to designate qualifying companies as pioneer enterprises or pioneer service companies. Once approved, these companies can benefit from a tax relief period that lasts up to 15 years, during which any income generated from the pioneer trade will be exempt from taxation.

Singapore invests significantly in R&D, with expenditure accounting for approximately 1.9% of its GDP as of 2021.

This encourages innovation in high-growth sectors like clean energy, biotech, and fintech. This environment also creates a favorable environment for startups.

Strategic Access to Different Markets

Singapore has established an extensive network of 27 implemented FTAs, encompassing both bilateral and regional agreements. These FTAs include partnerships with major economies like China, India, Japan, and the European Union, providing businesses with preferential market access and reduced tariffs.

Innovation for Business

Establishing a business in Singapore is a streamlined process, particularly for global organisations.

Choosing the Right Business Structure: Many foreign companies prefer to establish a Private Limited Company in Singapore. This organisational model provides limited liability protection and enables the subsidiary to function as a distinct legal entity, separate from its parent company.

Next, the organisation needs to register with the Accounting and Corporate Regulatory Authority (ACRA). This process includes:

  • Approving the company name
  • Submitting the documents
  • Licensing specific to sectors like finance or healthcare

The third step involves opening a corporate bank account, which involves formal paperwork. Organisations need to obtain the incorporation certificate, provide the details of the shareholders, and present the business plan.

Professional Support for Setting up a Business in Singapore

Singapore stands out as a compelling destination for global investors and professionals, thanks to its vibrant business landscape and strategic geographic location. As of June 2024, the nation’s population has grown to 6.04 million, with non-residents—including expatriates, foreign workers, and international students—making up about 30.8% of this figure.

The country’s strong residency programs enable easy travel across Asia, creating numerous opportunities for regional projects and collaborations. This ease of access significantly bolsters Singapore’s status as a prime hub for multinational enterprises.

Naturally, global investors are looking to establish their presence in Singapore. Professional consultancy experts like the IMC Group provide comprehensive support during company formation in Singapore, streamlining the process for entrepreneurs and foreign organisations. For startups and established businesses, this professional assistance is crucial to gain legal clarity and ensure compliance while setting up a business in Singapore.

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Key Tax Changes in Singapore’s Budget 2025 to Drive Growth Header
  • NEWSLETTER,SINGAPORE

Key Tax Changes in Singapore’s Budget 2025 to Drive Growth

Singapore announced its budget for 2025 at a time that coincides with the 60th year of independence of the nation. The authorities introduced a suite of tax incentives to strengthen businesses and enhance competitiveness.

 International firms continue to establish their presence in Singapore, fuelling innovation and growth. The new changes in tax policies provide crucial financial relief while they also encourage strategic investments. Thus, Singapore streamlines its position as a global business hub.

In this edition, let’s check out the tax changes in Singapore and how these measures are likely to drive growth.

1. Corporate Income Tax Rebate

Eligible businesses in Singapore can benefit from a corporate income tax rebate of 50%, which has been capped at S$40,000 per company. This rebate significantly eases financial pressure on businesses.

Moreover, firms that employ at least one local worker in 2024 will receive a grant of S$2,000. This initiative primarily supports SMEs, helping them understand economic challenges while planning for long-term expansion.

2. Incentives for Companies

A new Listing Corporate Income Tax Rebate incentivizes companies to go public in Singapore. Businesses that secure a primary listing on SGX can qualify for a tax rebate of 20%.

On the other hand, secondary listings with share issuance receive a 10% rebate. This rebate is capped at S$6 million annually and will be attracting more IPOs. This further reinforces the reputation of Singapore as a global financial centre.

Naturally, businesses trying to establish their presence in the country will be looking for Singapore Company Incorporation advisor solutions from experts.

3. Equity-Based Compensation to Retain Talent

Companies in Singapore have faced difficulties in talent retention in the past. To address this issue, the authorities have introduced tax deductions for Employee Equity-Based Remuneration (EEBR) schemes.

Businesses will be eligible to claim tax deductions for payments made to a holding company or special purpose vehicle for new shares issued under EEBR schemes from Assessment Year 2026.

This decision is set to benefit startups and high-growth enterprises looking to offer stock-based incentives to employees.

4. Expanding Support for Innovation & R&D

The economic strategy of Singapore is largely based on innovation. Businesses engaged in R&D and innovation-oriented projects are likely to benefit from new tax deductions.

Companies will be eligible to claim a 100% tax deduction on qualifying payments made under approved cost-sharing agreements for innovation activities.

5. Double Tax Deduction for International Expansion

Singapore continues to position itself as an ideal base for global businesses. It has extended its Double Tax Deduction for Internationalization (DTDi) Scheme till 31st December 2030. This allows companies to claim a deduction of 200% on qualifying expenses related to overseas expansion. This includes market research, international trade fairs, digital advertising, and business development activities.

6. Strengthening Incentives for M&A

Singapore has extended the M&A scheme till 31st December 2030 to encourage strategic M&A activities. Businesses operating in the country that make qualifying acquisitions can claim an M&A allowance of up to S$10 million per year. This will be written down over five years, and they will enjoy a deduction of 200% on transaction costs, capped at S$100,000 annually.

7. Removal of The Sunset Clause for Share Disposal Tax Exemptions

Singapore has also done away with the sunset clause for share disposal tax exemptions, which were previously set to expire in December 2027. Companies that meet the 20% shareholding mark for at least 24 months will continue to enjoy tax-free gains from share disposals.

Currently, the exemption applies to preference shares, which provides greater flexibility to businesses in structuring investments.

Seek Expert Taxation Services in Singapore

The Singapore Budget 2025 introduces a dynamic range of tax measures. Organizations of all sizes, ranging from MNCs to local enterprises must assess the new clauses and incentives carefully.

 While these measures are likely to foster international expansion and drive innovation, businesses must consult reputed professionals like the IMC Group for taxation services in Singapore. With global competition intensifying, these tax reforms solidify Singapore as a premier destination for investors.

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Family Offices Shaping the Future of Wealth Management in Singapore Header Img
  • NEWSLETTER,SINGAPORE

Family Offices Shaping the Future of Wealth Management in Singapore

Over the last decade, Singapore has firmly established itself as a premier destination for the world’s wealthiest individuals to safeguard their assets. As a result of this trend, the country has witnessed a surge in the number of family offices.

In 2024, Singapore witnessed a net rise of approximately 3,500 high-net-worth individuals. This figure stood at 3,200 in 2023. Some of the prominent figures who set up single family offices in Singapore include Sergey Brin, the co-founder of Google, Chinese billionaire Liang Xinjun, Indian billionaire Mukesh Ambani, and American hedge fund investor Ray Dalio. The influx of wealthy individuals further positions Singapore as a stable and investor-friendly destination.

What makes Singapore the Ideal Hub for Family Offices?

The rise of Singapore as a preferred hub for setting up family offices is the result of meticulous policymaking and governance over the decades. The country attracts wealthy individuals with its favourable business environment, political stability, and robust legal framework.

Some of the key factors that position Singapore as the ideal hub for family offices are presented below.

  • The country is ranked as the third least corrupt country globally and the most transparent nation in Asia.
  • For 15 consecutive years, Singapore has been recognized as the best place to conduct business.
  • Singapore is regulatory environments for financial institutions in Asia and the world.
  • The strategic location of the country makes it a gateway to booming markets in Asia.
  • With a stable currency and legal framework, Singapore has evolved into an attractive hub for secure investments and long-term wealth preservation.

Residency Perks for Family Offices

The residency policies in Singapore, formed through the Singapore Global Investor Program (GIP), are highly favourable for family offices. Under Plan C, qualifying family office leaders can apply for permanent residency. This empowers them to live and work in the country, while they benefit from its lucrative investment environment.

Let’s take a look at these numbers that demonstrate the growth of family offices in Singapore.

  • Singapore is projected to be the millionaire capital in the Asia-Pacific region by 2030. 13% of the Singaporean population are likely to be classified as millionaires by 2030.
  • Currently, more than 2,000 family offices operate in Singapore, marking a 43% Y-o-Y increment.
  • Singapore headquarters 59% of all family offices in Asia.
  • Currently, Singapore has 244,800 millionaires and 47 billionaires.
  • Singapore has surpassed London and is currently positioned as the 4th wealthiest city in the world.

Much of this new wealth comes from Hong Kong, Mainland China, Southeast Asia, and India. Also, American UHNWIs are increasingly expressing their interest in investing in Singapore.

How Do Family Offices in Singapore Invest?

Family offices in Singapore have come up with diversified investment strategies. These wealth management firms tactically balance private and public market exposure. Some of the key investment areas include:
  • Private capital markets: Direct investments, a preference shared throughout Asia.
  • Technology and AI: AI and health tech will be emerging as dominant investment avenues, particularly in the next few years.
  • ESG and philanthropy: According to new tax laws, family offices need to allocate a minimum of at least 10% or up to S$10 million of their assets to local investments.
  • The role of single-family offices in Singapore is crucial, as wealthy individuals continue to shift towards professional management of their finances.

The Shift Toward Professional Wealth Management

A report reveals that 43% of family offices in the Asia-Pacific region are shifting towards professional, non-family leadership. This figure surpasses the global average of 29%. Many SFOs are now hiring from financial services, consulting, and accounting backgrounds, and outsourcing specialized functions to external experts.

As the challenge and complexity of wealth management in Singapore continue to rise, many family offices in Singapore are turning to third-party service providers. Particularly, functions like bookkeeping, compliance, IT integration, and back-office operations are professionally managed by outsourced service providers. Interestingly, 85% of respondents in a survey believe that family offices should outsource middle and back-office functions to curtail costs and improve efficiency.

Professional Consultation for Family Offices in Singapore

The family office sector in Singapore is poised for consistent growth. It is largely driven by the country’s stable economy, world-class infrastructure, and favourable environment for investors. An increasing number of single family offices in Singapore are turning to established consultants like the IMC Group for professional advisory solutions. As global wealth continues to flow into Singapore, the country is consolidating its position as the premier destination for family offices in Asia.

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Family Offices in Singapore record 43% growth in 2024 with 2,000+ new Establishments Head
  • NEWSLETTER,SINGAPORE

Family Offices in Singapore record 43% growth in 2024 with 2,000+ new Establishments

Singapore has cemented its position as one of the leading wealth management hubs in Asia. As evident from statistics, the number of single family offices in Singapore soared by 2,000 in 2024 itself. In 2023, the country had only 1,400 SFOs, which marks a significant growth of 42.9% last year.

Around 600 new single family offices were launched in Singapore in 2024, which is more than double of the 300 that were added in 2023.

While speaking at the UBS Asia Wealth Forum, Second Finance Minister and Monetary Authority of Singapore (MAS) Deputy Chairman Chee Hong Tat explained the popularity of the country as a premier financial hub. He added that the financial stability in Singapore, along with its pro-business policies and incentives from the government make it an attractive destination for ultra-high-net-worth families.

Government Support for Single Family Offices in Singapore

The government of Singapore has been proactive in shaping the investment ecosystem in the country. In September 2024, MAS reported that it granted incentives to approximately 1,650 SFOs by the end of August. This suggests that more than half of the new SFOs were established in the last four months of the year.

One of the key reasons for the spike in the number of single family offices in Singapore is a key policy shift in November 2024. An amendment was made during this time, which allowed non-family employees to hold shares in these offices.

The Strong Economy and Financial Resilience of Singapore

Single family offices are expanding in Singapore at a time when the country’s economy is on a growth trajectory. Singapore recorded a 4% growth in its GDP in 2024, outperforming the 1.1% growth recorded in 2023.

Interestingly, the wealth management sector and financial services form a significant part of the services-producing industries. It contributed to 4.1% growth, surpassing the 3.6% from goods-producing sectors.

Geopolitical Uncertainties That May Impact the Market

 With Donald Trump returning as the US President, experts are wary of certain challenges due to probable trade restrictions. Amidst tariff hikes and the economic slowdown in China, certain risk factors linger in 2025. If Trump decides to follow the 60% tariff rate, the GDP of China may slow down to 3%, further disrupting global markets.

Also, the prospect of higher-for-longer U.S. interest rates could strengthen the US dollar, leading to further depreciation for Asian currencies. An expert suggested that the Chinese yuan may fall to 7.5 against the dollar, while in the latter half of 2025, the Japanese. Amidst the uncertain market conditions, the Singapore dollar could fall by another 2%.

Why Singapore is Advantageous for Setting up a Single Family Office

Now, let’s understand why Singapore is advantageous for setting up a single family office even amidst global turbulence. The country is in a position to weather economic fluctuations. The country has strong fiscal reserves, which provide a buffer to absorb economic shocks. With the upcoming general elections expected in 2025, the new budget statement on February 18 may present a fiscal bonanza.

Also, Singapore’s stature as a global financial hub is expected to draw investors. Currently, the city-state is the top deep-tech startup ecosystem in Asia, and occupies the fourth spot globally. Its reputation for regulatory stability continues to attract investors looking for a strategic base for wealth management.

Advisory Services for Setting up Single Family Offices in Singapore

The government of Singapore is adopting a wait-and-see approach as the country steps into 2025. Finance Minister Chee expressed the commitment of the country to stay adaptable in at a time when the financial environment is evolving.

Top advisory experts like the IMC Group can guide single family offices in Singapore operate with confidence, establishing their presence in the country. The financial stability and favourable policies in the country continues to position Singapore as a premier destination for ultra-wealthy families.

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Private Equity - The Future of Family Office Investments in Singapore
  • NEWSLETTER,SINGAPORE

Private Equity – The Future of Family Office Investments in Singapore

Singapore has rapidly emerged as a global hub for family offices, thanks to its favorable regulatory frameworks and attractive tax incentives from the government. As per the MAS (Monetary Authority of Singapore), the number of single family offices in Singapore has surged from 400 in 2020 to 1,650 by August 2024. This exponential growth demonstrates how the country appeals as a destination for wealth management for affluent families.

Since 2023, wealth management AUM (assets under management) have recorded more than 8% growth. Interestingly, the wealth management sector in Singapore has achieved a CAGR of approximately 10% in the last five years. This impressive performance speaks for the increasing diversification of family office portfolios, with PE (private equity) emerging as a prime asset class.

Private Equity Takes Center Stage Amidst Global Shift

Globally, private equity has overtaken public equities as the leading investment choice for family offices. In 2023, PE investments accounted for 30% of the average family office portfolio, compared to 22% in 2021. Interestingly, public equities, that were once the dominant asset class, witnessed a decline in share from 34% in 2021 to 25% in 2023.

Some notable reallocations took place in 2024 from cash to fixed income and from public equity to PE. Currently, 43% of family offices have exposure to PE, rising marginally from 38% last year.

This trend is particularly evident in the APAC (Asia-Pacific) region. Here, nearly half the family offices are planning to increase their PE allocations over the next five years. Besides aiming to capitalize on high-growth opportunities in this region, these offices are also diversifying into developed markets with fixed income, equities, and alternative investments like hedge funds.

What makes Private Equity Ideal for Family Offices?

Private equity offers a unique combination of high return potential and long-term wealth preservation while allowing investors to diversify their portfolios. We have presented seven reasons why a single family office in Singapore would turn to PE investments.

1. Long-Term Wealth Preservation

Family offices specialize in managing wealth across generations. Their prime goal is to establish long-term investment strategies for wealthy families. The extended investment cycles of private equity seamlessly complement these goals. Family offices can directly participate in growth as they invest in private equities, benefitting from the value appreciation of these businesses.

Private equity also allows families to leave a lasting legacy. They tailor investments based on the values of wealthy families, like supporting sustainability or innovation, or investing in industries that share the same vision as theirs. This approach helps in building wealth while reinforcing the principles of such families.

2. Potential for Higher Returns

Over the last 25 years, private equity has consistently outperformed public markets. These investments offer superior results, thanks to strategic interventions and active management. PE firms focus on enhancing the value of their portfolio companies through mergers, acquisitions, improvements in operations, and innovative governance strategies.

These high-growth opportunities, particularly at early stages, help family offices create significant value. This access to lucrative private markets often surpasses the returns public equity investments deliver.

3. Better Portfolio Diversification

Diversification is the key to effectively manage wealth. Private equity offers investors an avenue to create value in addition to traditional asset classes like equities and bonds. PE investments tend to have lower correlations with public markets, which help them stabilize portfolios during periods of volatility or uncertainty in the market.

Many family offices leverage their entrepreneurial backgrounds to identify and invest in niche sectors or industries where they have deep expertise. With this targeted approach, they mitigate risk and open up the doors for significant returns.

4. Active Involvement and Control

The level of control and influence private equity investments offer is rarely available in public markets. Family offices can directly invest in their portfolio companies and participate in their strategic decisions. This involvement often includes representation in boards or close collaborations with their management teams.

While investments in public markets are standardized, private equity brings in tailored investment structures. PE deals can also be customized to align with the specific needs and goals of a family office.

5. Access to Exclusive Opportunities

Family offices often benefit from access to exclusive investment opportunities unavailable to the broader market. Take the instance of co-investment deals, where family offices invest along with institutional players. These arrangements come with lower management fees, which enhance the overall returns.

Family offices frequently tap into proprietary deal flows through their extensive networks. These off-market opportunities provide a competitive edge, which allows them to invest in high-potential ventures before they become widely accessible.

6. Preserving Wealth Amid Inflation

With inflation rates rising globally, private equity provides an effective hedge through investments in real assets and businesses that have the pricing power. Many PE strategies focus on tangible assets or companies with intrinsic value. This keeps wealth resilient against inflationary pressures. This exposure to real assets enhances the overall stability of the portfolio for family offices.

Professional Consultation for Family Offices in Singapore

While private equity appeals to investors, family offices in Singapore encounter several challenges including the illiquidity of investments and high risk profiles. Along with this active portfolio management has its own set of operational demands.

Working in close coordination with established advisory service providers like the IMC Group, family offices can combat these challenges. These experts provide comprehensive guidance on how to setup single family offices in Singapore, and have a proven track record of providing tailored investment solutions. With a professional edge from these advisors, family offices can align investments to the goals of investors as they stride ahead to their long-term financial goals.

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Singapore Tax Update Key Legislative Developments in October 2024
  • NEWSLETTER,SINGAPORE

Singapore Tax Update: Key Legislative Developments in October 2024

In a major development in the tax regime in Singapore, the Singapore Parliament approved two major bills on October 15, 2024. These are the Multinational Enterprise (Minimum Tax) Bill and the Income Tax (Amendment) Bill, which introduce significant changes in tax to ensure compliance with global frameworks while supporting local economic activities.

For businesses operating in Singapore, it’s imperative to remain abreast of these tax updates to ensure compliance. Consulting established companies providing professional taxation services in Singapore, enterprises can adhere to the latest regulations.

In this edition, check out what these new updates are, and how they can impact your business.

1. Multinational Enterprise (Minimum Tax) Bill

The legislation in Singapore introduced two new top-up taxes under the Base Erosion and Profit Shifting (BEPS) initiative of OECD. The goal of this initiative is to make sure Singapore complies with international tax frameworks. These measures are likely to be implemented from January 1, 2025. This legislation introduces two new top-up taxes under the OECD’s Base Erosion and Profit Shifting (BEPS) initiative to align Singapore with international tax frameworks.

Key Features:

a. Domestic Top-up Tax (DTT)

  • Targets entities in Singapore within large MNE groups.
  • Imposed if the effective tax rate of the group in Singapore is below 15%.

b. Multinational Enterprise Top-up Tax (MTT)

  • Applicable to MNE groups with their headquarters in Singapore.
  • Imposed if the entities of the company in foreign jurisdictions have an effective tax rate below 15%.
  • The MTT ensures that the global effective tax rate for the group is increased to a minimum threshold of 15%.
It applies only to large MNE groups with at least €750 million as the annual group revenue in two or more of the four preceding financial years.

Compliance and Enforcement

The Comptroller of Income Tax is authorized to administer, collect, and enforce the MTT and DTT.

Offences under the new norms include:

  • Failure to maintain proper records
    Tax evasion
  • Obstruction to the duties of the Comptroller
These powers are already in place under the Income Tax Act 1947 to ensure that the IRAS (Inland Revenue Authority of Singapore) can effectively enforce compliance.

2. Income Tax (Amendment) Bill

This bill introduces tax measures announced in the 2024 Budget Statement last February, along with some periodic updates to the income tax regime in Singapore. The provisions under this bill are presented below.

a. Refundable Investment Credit (RIC)

The RIC has been designed to encourage high-value economic activities in Singapore. It provides tax credits for local expenditures, like:
  • Capital investments
  • Research and development (R&D)
  • Manpower training
  • Freight and logistics

Eligible Activities

  • Establishing or expanding manufacturing facilities
  • Setting up headquarters and services operations
  • Conducting R&D and innovation projects
  • Commodity trading
  • Decarbonization initiatives

How It Works

  • Tax credits offset corporate income tax payable
  • Unused credits are refunded within four years of the qualifying claim for expenditures

b. Renovation and Refurbishment (R&R) Scheme Enhancements

The scheme allows businesses to deduct R&R expenses, which are typically not deductible as capital expenses. From Year of Assessment (YA) 2025, qualifying expenses will include designer and professional fees.

Standardized Expenditure Cap Period

Previously, the cap period used to vary, based on the time when a business made its first claim. Currently, the standardized rate involves a three-year cap of SGD 300,000, starting from YA 2025 to YA 2027. Businesses can now opt to claim the entire R&R deduction in one YA instead of spreading it over three YAs. This significantly improves their cash flows.

Why These Changes Matter for Businesses

Now, let’s understand how these changes in the tax regime in Singapore are likely to affect businesses.

1. Global compliance

The DTT and MTT ensure Singapore remains compliant with the global tax framework of BEPS (Base Erosion and Profit Shifting) of the OECD. This will safeguard its reputation as a leading financial hub.

2. Encouraging investments

The RIC provides incentives to businesses to channel their investments into activities driving innovation and economic growth in Singapore while maintaining sustainability.

3. Greater flexibility

New updates to the R&R Scheme now provide businesses with greater flexibility and control over their financial management, particularly in areas sensitive to cash flow.

What Businesses Should Do Next?

Successful businesses are looking to adopt a proactive stance and assess the updated tax structures. For large MNEs, it’s necessary to evaluate their global tax positions and maintain compliance with the DTT and MTT requirements by 2025.

Another challenge involves detecting qualifying expenditures early to maximize benefits under the RIC framework. Forward-thinking businesses are already reaching out to leading companies providing professional taxation services in Singapore, like the IMC Group. Consulting these experts can help in optimizing their tax deductions for expenses related to renovation and refurbishments. With a trusted tax advisory partner providing accurate guidance, businesses in Singapore can remain compliant amidst the new tax regime.

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M&A Market in Singapore Witnesses 29% Growth in 2024
  • NEWSLETTER,SINGAPORE

M&A Market in Singapore Witnesses 29% Growth in 2024

Singapore continues to strengthen its position as a leading regional hub for M&A (mergers and acquisitions). In 2024, the country has recorded substantial growth in such deal values, as evident from the latest data. In the first three months, M&A turnovers that involve Singapore-based companies reached $51 billion, marking a 29% YoY increment compared to the same period in 2023. These figures clearly demonstrate the resilience and attractiveness of Singapore as a global hub for businesses.

With the volume of transactions on the rise, businesses are looking for expert advisory solutions regarding Singapore mergers and acquisitions to remain profitable in the long run.

Eight High-Stake Deals Boost M&A Transactions in Singapore

The boost in M&A deals is largely driven by major transactions. Over the last year, there have been eight major deals valued at over $1 billion. These M&A deals account for a transaction value of $16.2 billion. Some of the notable deals among these were acquisitions by the Australian company Lendlease and Warburg Pincus.

However, the country noted a 25.5% YoY decline in the total number of deals. It reflects broader global market conditions that point to concerns like political instability and valuation issues. As a result, certain businesses have reassessed their strategies.

Surge in Inbound and Domestic M&A Activity

Over the last year, inbound M&A activity in Singapore recorded a striking rise. Foreign investors acquired a number of Singapore-based companies. The total worth of these companies comes to $14.3 billion, which marks a 66.4% increment from the previous year.

These figures demonstrate the increasing appeal of Singapore as a primary destination for investment in the region. M&A activities also witnessed a surge in the domestic front, as total transactions reached $4.5 billion, recording a 15% YoY increment. This indicates a healthy level of consolidation within the local market in Singapore.

A Decline in Outbound M&A Transactions

However, there has been a sharp decline in outbound M&A transactions, where Singaporean companies acquire foreign businesses. At $14.7 billion, the figure is the lowest in the last nine years. This decline can be attributed to factors like discrepancies in valuation, regulatory challenges, and geopolitical uncertainties. Moreover, 62% of CEOs in Singapore reported that they had delayed or abandoned M&A deals over the past year due to these market conditions.

Amidst all these challenges, forward-thinking businesses must have a look at the key regulations for M&A in Singapore. Consulting reputed advisory professionals for due diligence can pave the road to success for global firms.

  • In the M&A market financial services sector emerged as the most dominant player, accounting for around 20% of all transactions. With deals amounting to $10 billion, this sector witnessed a 36% increase from the previous year.
  • With a 15% market share, the real estate sector followed closely, accounting for transactions worth $7.7 billion.

Professional Advisory Solutions for M&A Activities in Singapore

The M&A market in Singapore continues to maintain a positive outlook, with strong growth in inbound activities expected in the coming months. Singapore’s role as a pivotal business hub in Southeast Asia is attracting international investors. This significantly reinforces the reputation of the city as a key center for strategic acquisitions.

For due diligence and expert insights regarding Singapore mergers and acquisitions, global players are partnering with established advisory companies like the IMC Group. Consulting seasoned experts, businesses can strike M&A deals with confidence and propel towards growth in Singapore.

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Tax Incentive Requirements for Family Offices in Singapore
  • NEWSLETTER,SINGAPORE

Tax Incentive Requirements for Family Offices in Singapore

Singapore continues to strengthen its position as a global hub for family offices as a major economy in Southeast Asia. Recent updates to its tax incentives demonstrate a shift towards transparency, philanthropic impact, and local investment. As the Monetary Authority of Singapore (MAS) introduced new regulations in 2023, single family offices in Singapore now need to adhere to more rigorous standards under the major tax exemptions in the country. These include the Enhanced Tier Tax Incentive Scheme (13U), Offshore Fund Exemption Scheme (13D), and Onshore Fund Incentive Scheme (13O).

In this edition, we have explored the eligibility requirements in-depth, along with the evolving role of family offices within the financial landscape in Singapore.

Overview of Key Tax Incentives for Family Offices in Singapore

Tax Incentive Tax Incentive Key Requirements Minimum Assets Under Management (AUM)
13D Offshore Fund Exemption Scheme Non-Singapore residents managed by a Singapore-based fund manager Non-resident in Singapore – No full ownership by Singaporean entities No minimum AUM required
13O Onshore Fund Incentive Scheme Companies incorporated in Singapore 100% Singapore investors – S$200,000 minimum annual spending – Employ at least two investment professionals (IPs) S$20 million
13U Enhanced Tier Tax Incentive Scheme Offshore and onshore entities Open to foreign investors – S$500,000 minimum annual spending – Employ at least three IPs S$50 million
Each of these schemes provides significant tax exemptions for family offices that meet the guidelines of MAS. The schemes have been designed to fostering local investment and ensure compliance with environmental and social governance (ESG) standards in Singapore.

Detailed Evaluation of Tax Schemes For Single Family Offices in Singapore

Now, let’s take a look at the detailed breakdown of tax schemes for single family offices in Singapore.

Offshore Fund Exemption Scheme (13D)

Under the 13D scheme, funds managed by Singapore-based managers on income derived from certain investments are subjected to certain tax exceptions. The eligibility for this exception depends on the non-resident status of the fund in Singapore and a structure prohibiting full ownership by Singaporean entities. However, this scheme doesn’t have any AUM or minimum local spending requirements. It is crucial for compliance and effective tax planning.

Onshore Fund Incentive Scheme (13O)

The 13O scheme encourages the establishment of fund vehicles within Singapore. It targets companies that are locally incorporated. The requirements of this scheme are as follows.

  • Investors must be entirely from Singapore
  • The minimum AUM should be $20 million
  • To strengthen local economic contributions, the minimum annual spending should be S$200,000
  • Professional staffing requirements involve two qualified investment professionals with a monthly income of at least S$3,500

 

Thus, MAS remains committed to foster local talent and developing various sectors.

Investment Allocation

Coming to investment allocation, at least 10% of AUM or S$10 million must be allocated to climate-related investments, local equities, or non-listed funds that are distributed by financial entities licensed in Singapore. Thus, the financial ecosystem will benefit from local investments, including non-listed Singapore companies with a notable presence.

Enhanced Tier Tax Incentive Scheme (13U)

The 13U is the most comprehensive scheme and applies to both onshore and offshore entities. Key components of this scheme are:

  • Jurisdiction: Flexible residency requirements
  • AUM: Minimum S$50 million to qualify
  • Annual local spending: At least S$500,000 to promote consistent reinvestment within Singapore
  • Professional staffing: There should be three investment professionals that support an advanced level of fund management and compliance oversight

In recent years the role of single family offices in Singapore in wealth management for affluent families has gained unprecedented prominence. Thus, it’s imperative to maximize tax incentives through this scheme. It allows family offices to use the tax treaties in Singapore and is applicable to Variable Capital Companies (VCCs).

Local Philanthropy and Contributions to ESG

 The Philanthropy Tax Incentive Scheme of Singapore, designed in 2023, has been effective from January 2024. It provides incentives to family offices that allocate funds towards local and global philanthropic causes. This scheme includes a provision of up to 100% tax deduction, which is capped at 40% of the income of the donor.

With this scheme, Singapore demonstrates its strategic goal to allocate capital toward important social causes. The funds donated to charities in Singapore also qualify as business expenses under the regulations of MAS. Thus, philanthropy has been embedded as a component of compliance in Singapore.

Maximize Tax Incentives with Professional Consultation Services from Experts

The tax schemes in Singapore offer a clear pathway for single family offices to achieve tax efficiency while they support local economic and social initiatives. Established advisory professionals like the IMC Group work closely with single family offices in Singapore to help affluent families manage their wealth and maximize their tax savings through incentives. With expert assistance, single family offices can optimize the tax structure amidst the dynamic regulatory environment in Singapore.

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