About 10% of that total is family offices that handle funds of Chinese origin, said Lo Kia Meng, chief operating officer and senior partner at Singapore law firm Dentons Roddick.
Although Lo expects the proportion of family offices in China to remain unchanged going forward, he said the growth rate has actually slowed as the city-state’s requirements for assets under management have increased.
“We expect growth to remain stable over the next two to three years,” he said in Asia this week. “We assume that there are no significant changes to the tax incentives related to family office eligibility criteria.”
The increased scrutiny of family offices in the city-state coincides with Singapore’s chairmanship of the Financial Action Task Force, a global money laundering and terrorist financing watchdog.
But city-states are by no means turning their backs on family offices. In February, the government announced that it would extend some tax incentives for family offices for a further five years until the end of 2029. Dentons Roddick’s Mr Low said the move “demonstrates Singapore’s commitment to continue to attract and support fund management activities and private asset management”.
Family offices’ investment portfolios typically include real estate as well as bonds and stocks, but real estate agents say they have seen fewer Chinese purchases recently.
“We see some wealthy Chinese looking to invest in companies in Singapore and Southeast Asia, but valuation disparities are limiting the ability to close deals,” a Singaporean consultant said on condition of anonymity. Told.
Still, the Singapore government is doing its best to make the country more investment-friendly for family offices.
Chinese family offices that established themselves in Singapore during the ‘boom period’ of the past five years will also mature.
Dentons Roddick’s Loh expects changes to tax benefits for family offices to be announced in the third quarter of this year, including expanded tax breaks for Singapore-registered limited partnerships.
He said this is a “welcome change that will give Singapore-based fund managers more flexibility in choosing the appropriate format for managing their investment funds.”
Mr Low said family offices’ investment scope could also change in the future as the government promotes philanthropy and encourages more local and sustainable investments.
“This is a sign that the private wealth management environment is maturing. The Chinese family offices that settled in Singapore during the ‘boom period’ of the past five years will also mature,” he said.
The first, developed with support from the Economic Development Board and the Central Bank of Singapore, aims to guide newly arrived family offices and introduce them to a range of investment opportunities.
The second initiative aims to strengthen the family office sector’s capacity to protect against financial crime, including money laundering, and ensure compliance requirements are met.
In a statement, the Monetary Authority of Singapore, the central bank, said: “Given that criminals often operate across borders, we are working hard to effectively combat money laundering and organized crime networks. We are actively cooperating with relevant agencies.”
“However, as a matter of policy and in line with international practice, we do not comment on the details of such cooperation.”
