In recent years, Asia has proven its pedigree as a world class area for global business and investment — and in that time, the region’s number of high net-worth individuals (HNWI) has grown by 7.6%. China itself continues it’s regional dominance, becoming home to the second largest group of billionaires in the world.
With that wealth, comes responsibility.
Responsibility to invest wisely, in a safe and politically stable locality, with the ultimate goal of assuring a family’s legacy for generations to come.
It’s these factors that have led forward-thinking HNWI and ultra high net-worth individuals (UHNWI) from Asia and abroad to trust Singapore’s proven track record of prosperity and stability with the family office investment vehicle.
The family office is a truly bespoke, end to end, multigenerational fund management vehicle that covers everything from budgeting, to financial education for progeny, to personal protection services while travelling.
Given the complexities of such a custom-made, all encompassing solution, setting up a home office is no simple task. With that in mind, let’s take a look at 10 steps for setting up a family office in Singapore.
1. Establish Your Family Charter
Given that your end game goal is to create a family legacy for generations to come, a family charter is essential to guide the strategic direction of your family office.
By sitting down with your family and your family office service provider, you should establish the goals, culture, and ideals you would like your legacy to achieve.
It goes beyond investment strategy too — for example, do you want your children directly involved in future investment decisions, or would you like to create a reputation for charitable giving?
2. Decide Which Assets Will Be Controlled by Your Family Office
At this stage of your life, your investments are likely to be extremely varied, ranging from stocks and shares, to property, to fine art. Each class of assets will have specific needs in terms of tax responsibilities, so it’s advisable that you and your family office service provider decide how to treat each asset segment.
For example, it may be decided that your property should be put into a private family trust under the umbrella of your family office to optimise your tax obligations.
Remember, a family office is a completely bespoke solution to your special needs, and no competent family office service provider would gloss over this step.
3. Choose the Services You Want Your Family Office to Provide
A reputable family office service provider should offer a truly bewildering array of services to you, so take your time to go over what would be of use to you.
Here’s an incomplete list of services that could be offered under your family office:
- Tax services
- Legal services
- Wealth management
- Concierge services
- Property management
- Charitable giving
- Family governance
- Wealth succession
- Investment education for the family’s next generations
- Establishment and operations of private foundations
- Payroll and human resources
Each of these services will be assigned to dedicated staff, creating a team of experts at your disposal virtually 365 days a year.
4. Decide How Your Family Office Leadership Will Be Structured
While it might feel natural to hire a former employee, banker, or CxO given your long and trusted relationship, they may not actually have the skills or experience to handle the complexities of a family office.
With that in mind, when it does come to choosing your family office CEO, CIO, etc., we do advise that you defer somewhat to the advice of your family office service provider. They will be able to use their network to help you recruit the very best person to lead your family office.
It is of course ultimately your choice, but do keep the above in mind — after all, this will be the team charged with leading your family’s legacy for decades to come.
5. Draft Your Family Office Business Plan
Of little surprise, the next step will be to draft your family office’s business plan. Feel free to take the advice of your existing advisors, but your family office service provider will be your team to put the pieces together to create a robust business plan for you and your family’s business affairs.
Related Read: Why Singapore is Ideal for Family Office Setup »
6. Establish Pro Forma Family Office Budgeting
While largely a formality, setting up your family office costs and budgeting will set the framework for more definitive budgeting further down the decision chain.
7. Structure Your Family Office for Tax Optimisation
Singapore famously offers corporations the ability to effectively pay no tax on specified income under Onshore (Singapore Resident Company) Fund Tax Exemption Scheme (also known as 13R) and Enhanced Tier Fund Tax Exemption Scheme (also known as Section 13X). This can also be achieved by a family office in Singapore, however you will need to make some considerations, such as hiring local staff, investment requirements, and local spending on goods and services. Talk to your family office service provider to establish the correct structure.
8. Recruit the Rest of Your Family Office Staff
Depending largely on the services you select for your family office, your family office service provider can recruit, shortlist, and ultimately hire your entire complement of staff. Within a few short weeks, you could have a dedicated team of bankers, lawyers, travel agents, or even bodyguards.
9. Organise Your Family Office Operation Infrastructure
While not the most exhilarating of our steps in this article, setting up the actual infrastructure of your family office is absolutely essential.
Everything from computers, to cybersecurity, to operational practices will need to be considered — but fear not, your chosen family office service provider can take care of every single part of these concerns if you so desire.
10. Rest Assured You Now Have a Family Office Located in One of the Most Lucrative, Stable Regions in Asia
That’s it, your family’s legacy is now located in the world’s freest economy, with the added benefit of knowing if you wish to visit, Singapore offers some of the highest quality of living on the planet.
Where to Next for Setting up Your Family Office in Singapore?
InCorp’s expert team is ready to help you make your move to the safe shores of Singapore for your family office. Our accountants, lawyers, bankers, and HR specialists, all have extensive experience in family office planning and implementation, so no detail is too small.
We also understand that your family office isn’t just about wealth management — it’s about ensuring that your children, and their children, have the tools needed to thrive in an uncertain future. We are eager to work with you to achieve that goal and more.