Global family office trends: Focus on Singapore
Why is Southeast Asia attractive to family office?
Singapore has gradually become one of the first choice for family offices. Consider the well-known entrepreneurs who have set up family offices in Southeast Asian countries since July 2019: Sergey Brin- co-founder of Google, Ray Dalio- founder of bridge water investment, one of the world's largest hedge funds , Sir James Dyson- the founder of British technology company Dyson Co., Ltd., which is famous for vacuum cleaners, and Zhang Yong and Shu Ping, the behind the scenes leaders of Haidilao International Holdings Co., Ltd., the world's largest Chinese hot pot chain giant, and so on.
As of October 2020, there were about 200 family offices in Singapore, with a total of about US $20 billion in assets under management. The demand of high net worth families for wealth planning, wealth inheritance and family inheritance highlights the necessity of the existence of family offices, and directly stimulates the growth of the number of family offices in Asia.
Why do you prefer Singapore?
In addition to tax incentives, Asia's potential growth has also made it more and more popular with investors. Singapore, an island country, is regarded as a gateway to Asia. In addition, many families were impressed by the way the Singapore government handled the epidemic and had confidence in Singapore's security.
The family office is essentially a business tool designed to plan and manage investments to inherit family wealth. In Singapore, there are two forms of family office: single family office and joint family office. A single family office serves only one wealthy family. It is usually set up by one family and equipped with its own professional team to deal with the affairs of that particular family. The United Family Office concentrates resources on the affairs of two or more families.
The number of family offices in Singapore continues to grow
With more than $20 billion settled in Singapore
Tharman Shanmugaratnam, senior minister of Singapore, said that the number of single family offices in Singapore had increased to about 200 in recent years. Recent industry studies estimate that each SFO typically manages more than $100 million in assets. Tharman, head of the monetary authority of Singapore (MAS), said that this means that the total assets managed by SFO may be about $20 billion.
MAS does not have conclusive data on the business scale of SFO. Because SFO does not manage third-party funds, these family offices are not registered with or licensed by financial regulators. The securities and Futures Act does not define the term "SFO". It usually refers to an entity that manages assets for or on behalf of only one family and is wholly owned or controlled by members of the family.
In addition to direct employment, such family offices create indirect employment opportunities in Singapore because they usually employ external financial, tax and legal professionals to advise on wealth planning and operations, Tharman said.
