A thriving economy in Asia, Singapore presents an ideal destination for investors and high net worth individuals to park their money in the country. Not only does it provides sound investment opportunities, but it is also one of the best places to live.

As such, family offices and investment holding companies are fast booming in Singapore. Find out the differences and the advantages of setting up an investment holding company and/or family office.

Differences Between Family Office & Investment Holding Company

The difference between a family office and an investment holding company is as below:

  • Family office – manages the wealth, insurance, trusts, and estates
  • Investment holding company – portfolio of business equity stakes

There are 2 types of family offices:

  • Single family office (SFO) – the management for only one family

  • Multiple family office (MFO) – privately-owned organisation that provides management services for more than one family

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What are the Advantages of Having a Family Office/ Investment Holding Company in Singapore

What makes Singapore an attractive location for setting up a family office? The advantages of doing so are listed below.

  • Singapore tax system

    A key consideration when setting up a family office is how tax efficient and flexible the jurisdiction when it comes to moving or divesting these family assets and investments.

    In Singapore, the tax system is quasi-territorial, meaning only income generated from Singapore will be taxed while foreign-sourced income is exempted.

  • Low corporate tax rates

    The corporate tax rate in Singapore is very competitive at just 17%, as compared to other countries.

  • Tax incentives

    If your funds are managed by a local SFO company in Singapore, there are also tax exemptions that you can enjoy on a broad range of income – these include, amongst others:

    • Equities
    • Bonds
    • Immovable properties

    For investment holding companies in Singapore, there are various tax incentives that are initiated by the Singapore government that is industry and investment specific.

    There is also tax exemption on the first earned 100k SGD in the first three years after incorporation.

  • Double tax treaties

    Singapore has many double tax treaties and agreements with different countries. This means that you will be exempted from tax on certain types of incomes and avoid being taxed in two different jurisdictions.

  • No capital gain tax

    Capital gains from selling your stocks, bonds, and properties are not taxed in Singapore.

  • Best-in-class infrastructure & connectivity

    Singapore is well-known for its modern infrastructure and strong business connectivity, and political environment, making it a safe and attractive location.

Wan Yi
FUN FACT: Singapore been working to promote itself as Asia’s new “Swiss Banking Haven” and has since made a series of legislation changes from taxation, administration and trust law to promote private banking.

Looking for tax planning services? Reach out to us today to see how we can best set you up on the most tax efficient and asset protection structure!

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FAQs

What is Singapore’s income tax rate?2021-09-06T15:44:02+08:00

Singapore’s personal income tax rates for resident taxpayers are progressive. This means higher income earners pay a proportionately higher tax, with the current highest personal income tax rate at 22%

Why is it necessary for Singapore to have tax exemptions on international air travel and shipping income?2021-09-06T15:43:25+08:00

The countries to which these tax exemptions apply are heavily involved in shipping and air routes to and from Singapore. Therefore, these exemptions encourage the people of these countries to continue to engage with and conduct business activities in Singapore.

Why must Singapore have Tax exemptions on International aire travel and shipping income?2020-06-22T11:38:39+08:00

The countries to which these tax exemptions apply are heavily involved in shipping and air routes to and from Singapore. Therefore, these exemptions encourage the people of these countries to continue to engage with and conduct business activities in Singapore.

What are the most recent changes to Singapore’s income Tax Rates?2020-06-22T11:36:06+08:00

Singapore’s current maximum personal income tax rate is 22%. This represents an increase from the prior maximum rate of 20%. On the other hand, the corporate income tax rate has steadily declined over the years. It once sat at 26% but is now at 17%.

Which Business Entities do not qualify for the Start-up tax exemption scheme?2021-09-06T15:42:42+08:00

Not all business entities in Singapore are eligible for the government’s tax exemption. Only private limited companies, foreign subsidiary companies, foreign branch companies, and Singapore offshore companies qualify for it. Therefore, business entities such as sole proprietorships, partnerships, and limited liability partnerships may not receive the tax exemption.

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