Singapore’s central bank and financial regulator has relaxed requirements for single family offices, including allowing them to open up shareholding to key employees outside of the family.
The move comes seven weeks after neighbouring Malaysia announced a scheme to draw wealthy families. The central feature of the scheme is zero tax rate of up to 20 years, provided they set up single family offices in the Forest City special economic zone, a 45 minute drive from Singapore.
According to a 46-page document published by the Monetary Authority of Singapore (MAS) on November 7, single family offices in the city state will now be allowed to grant equity stakes of up to 10% to non-family key employees, who can now also invest alongside the family. Key employees are C-suite executives and executive directors.
If these key employees leave, they will have to sell their stakes back to the family within 12 months.
Single family offices have also been given more time to file financial accounts. They can submit the accounts within four months of their financial year end, instead of within 14 days of the end of a calendar year.
“This will relieve the reporting burden on single family offices,” MAS says.
Loosening the requirements can help family offices attract and retain key talent, according to a fund manager at a US asset management firm in Singapore.
“In this investment management industry, there’s always a shortage of good talent. By allowing key employees to own a stake in the single family office, it can significantly help incentivise performance and long-term commitment,” he tells Asia Asset Management, speaking on condition of anonymity.
