In September 2025, Singapore’s regulators announced two major developments that directly affect family-office strategies. First, the Monetary Authority of Singapore (MAS) and the Economic Development Board (EDB) officially reduced the processing time for family-office tax incentive applications to three months, signalling the city-state’s determination to accelerate capital inflows and stay ahead of rival financial hubs. Second, regional surveys showed that Asia’s family offices now expect returns above 5 % despite market volatility—evidence of stronger risk appetite and active portfolio repositioning.
From 1 January 2025, Singapore updated its tax incentive regimes for funds and family offices and revised related rules, including requirements for investors under the Global Investor Programme (GIP), new transfer-pricing standards for related-party loans, and the Corporate Service Providers Act (CSP Act). These changes collectively reshape the operating environment for family offices and set the context for the detailed guidance that follows.
Together, these changes make Singapore an even more attractive jurisdiction for wealth management but also require family offices to understand the updated tax rules, compliance obligations, and local spending requirements to take full advantage of the incentives and protect their capital.
From 1 January 2025, Singapore updated its tax incentive regimes for funds and family offices and revised related rules, including requirements for investors under the Global Investor Programme (GIP), new transfer-pricing standards for related-party loans, and the Corporate Service Providers Act (CSP Act). These changes collectively reshape the operating environment for family offices and set the context for the detailed guidance that follows.
Together, these changes make Singapore an even more attractive jurisdiction for wealth management but also require family offices to understand the updated tax rules, compliance obligations, and local spending requirements to take full advantage of the incentives and protect their capital.
Sections 13O / 13U / 13D (and the new 13OA): AUM and LBS Get Stricter in 2025
The most important shift is that AUM is now measured using Designated Investments (DI) rather than NAV, and the Local Business Spending (LBS) obligations are applied on a stepped basis. The core thresholds are:
● 13O: minimum S$5 million in DI at each financial year-end.
● 13U: S$50 million in DI at application and each financial year-end.
● Tiered LBS:
○< S$250 million → ≥ S$200 000 per year
○ S$250 million – < S$2 billion → ≥ S$300 000 per year
○≥ S$2 billion → ≥ S$500 000 per year
In practice, this locks in a real economic footprint for an SFO and forces early planning for headcount, service providers, and annual budgets.
Key planning considerations:
Practical takeaway: Build three-year DI-AUM and LBS projections, synchronise budgets for investment professionals and administrative functions, and secure funding and allocations early. For 13U approvals, late DI contributions are unlikely to be excused—plan financing in advance rather than scrambling at year-end.
● 13O: minimum S$5 million in DI at each financial year-end.
● 13U: S$50 million in DI at application and each financial year-end.
● Tiered LBS:
○< S$250 million → ≥ S$200 000 per year
○ S$250 million – < S$2 billion → ≥ S$300 000 per year
○≥ S$2 billion → ≥ S$500 000 per year
In practice, this locks in a real economic footprint for an SFO and forces early planning for headcount, service providers, and annual budgets.
Key planning considerations:
- Transitional rules for older awards: If your 13O/13U approval predates 1 January 2025, the DI-based AUM tests and stepped LBS will only bite from the financial year ending 2027 (YA 2028). Until then, you may maintain the flat LBS (≥ S$200 000) and the previous investment-professional requirements (e.g., three IPs for 13U). Always confirm your approval letter’s exact terms.
- New awards from 2025 onward: For 13U there is virtually no grace period—S$50 million DI must be met immediately and maintained. For 13O, grace periods to reach S$5 million DI may apply in early years but disappear by FY 2027: new awards granted for that period face full requirements from year one, so delaying DI inflows is risky.
- 13OA expansion: Beginning 2025, the 13O-style tax framework now covers Singapore limited partnerships, offering flexibility for families preferring LP agreements and partnership economics.
Practical takeaway: Build three-year DI-AUM and LBS projections, synchronise budgets for investment professionals and administrative functions, and secure funding and allocations early. For 13U approvals, late DI contributions are unlikely to be excused—plan financing in advance rather than scrambling at year-end.
Global Investor Programme (GIP) — Mandatory Singapore Equity Allocation
As of 21 February 2025, family offices pursuing permanent residency under Singapore’s Global Investor Programme (GIP) must reconfigure their portfolios to comply with a new equity rule: at least S$50 million must be invested directly in Singapore-listed equities. REITs and Business Trusts no longer qualify toward this mandatory allocation, though they can still be held beyond the quota. This change is part of the broader Equities Market Review intended to deepen liquidity and broaden participation in Singapore’s capital markets.
For family offices not using GIP, investment menus remain as before, but GIP applicants now face a non-negotiable requirement. This impacts portfolio construction, liquidity management, and reporting.
How to implement effectively:
For family offices not using GIP, investment menus remain as before, but GIP applicants now face a non-negotiable requirement. This impacts portfolio construction, liquidity management, and reporting.
How to implement effectively:
- Approve an investment policy statement that includes a dedicated SG-equities sleeve of S$50 million.
- Define KPIs for managers: concentration limits, active vs index strategies, and volatility controls.
- Verify custodial and administrator systems can generate clear, regulator-ready reports showing the equities exposure.
- Coordinate this with 13O/13U AUM and LBS planning so that shifting assets to listed equities does not inadvertently jeopardise DI or spending compliance.
Corporate Service Providers Act (CSP Act) — Providers Under Scrutiny
The Corporate Service Providers Act, effective 9 June 2025, fundamentally changes how family offices engage incorporation and nominee service providers. Any business offering corporate services—from company formation and secretarial support to nominee director or shareholder services—must:
Why this matters for SFOs:
The regulator is no longer focusing only on banks and trust companies. Any weak link in the compliance chain—such as a non-compliant secretarial service or an informal nominee—can now expose a family office to operational disruption and reputational damage. Before engaging or renewing a provider:
- Register with ACRA and satisfy fit-and-proper criteria.
- Implement robust AML/CFT and proliferation-financing controls: thorough KYC on clients, beneficial owner verification, record-keeping, suspicious-transaction reporting, and internal compliance reviews.
- Maintain transparent procedures subject to audit and enforcement.
Why this matters for SFOs:
The regulator is no longer focusing only on banks and trust companies. Any weak link in the compliance chain—such as a non-compliant secretarial service or an informal nominee—can now expose a family office to operational disruption and reputational damage. Before engaging or renewing a provider:
- Check the ACRA register to confirm status.
- Request documentation of AML/CFT procedures.
- Update engagement letters or SLAs to specify obligations, response times for KYC updates, and penalties for non-compliance.
Transfer Pricing for Related-Party Loans — A New Safe Harbour
Starting 1 January 2025, Singapore’s Inland Revenue Authority (IRAS) introduced important updates to its transfer-pricing framework for related-party domestic loans. The safe-harbour rules have been expanded: if both borrower and lender are Singapore taxpayers and neither is in the business of borrowing or lending, you may now apply IRAS’s indicative margin regardless of loan size—removing the previous S$15 million cap. For 2025, the indicative margin is +1.70 % over the relevant reference rate (RFR/IBOR, with encouragement to migrate legacy IBOR contracts to risk-free rates).
The long-standing “interest-restriction proxy” has been abolished for new domestic loans: pricing must either follow the indicative margin or be supported by an arm’s-length analysis. IRAS has also tightened documentation expectations—long-term loans require annual reviews and robust records ready for audit. For family offices, these changes simplify treasury operations but increase the importance of formal processes.
Practical treasury checklist:
The long-standing “interest-restriction proxy” has been abolished for new domestic loans: pricing must either follow the indicative margin or be supported by an arm’s-length analysis. IRAS has also tightened documentation expectations—long-term loans require annual reviews and robust records ready for audit. For family offices, these changes simplify treasury operations but increase the importance of formal processes.
Practical treasury checklist:
- Rewrite intra-group loan policies: for new domestic loans, adopt the indicative margin or a full benchmarking study; refinance old IBOR-linked loans under RFR terms.
- Update loan agreement templates—include review triggers, covenants, and renewal procedures.
- Align transfer-pricing documentation schedules with your corporate calendar to avoid compliance gaps.
Building a 12–24 Month Operating Model
AUM-in-DI and LBS strategy:
Plan capital inflows and spending so that DI-based AUM always meets thresholds at financial year-end and LBS accrues evenly. Avoid expensive December catch-ups by smoothing spending quarterly. Factor in rising compliance costs: audit fees, tax updates, and regulatory changes can push LBS higher than expected—budget a buffer instead of scrambling to justify a shortfall.
Provider ecosystem:
Review every counterparty—banks, brokers, custodians, VCC/fund administrators, lawyers, tax advisers, CSPs (now ACRA-registered), and auditors. Each should actively support DI/LBS/KYC compliance rather than obstruct it. Include service-level terms for prompt KYC updates and document submissions.
GIP equity policy:
If pursuing GIP, formalise the S$50 million SG-equities sleeve in investment-committee rules. Define approved exchanges, manager-selection criteria, rebalancing processes, and guardrails on liquidity and volatility. Coordinate with banks and custodians so reporting to EDB/MTI is unambiguous.
Transfer-pricing discipline:
Intra-group loans are a common audit target. Ensure you maintain (i) rate analyses or IRAS indicative-margin evidence, (ii) loan agreements with market-based terms, and (iii) an annual review calendar.
Source-of-funds/wealth preparation:
Even as incentives accelerate, regulators, banks, and CSPs scrutinise SoF/SoW more than ever. Prepare dossiers early to prevent prolonged back-and-forth requests that could stall approvals or transactions.
Plan capital inflows and spending so that DI-based AUM always meets thresholds at financial year-end and LBS accrues evenly. Avoid expensive December catch-ups by smoothing spending quarterly. Factor in rising compliance costs: audit fees, tax updates, and regulatory changes can push LBS higher than expected—budget a buffer instead of scrambling to justify a shortfall.
Provider ecosystem:
Review every counterparty—banks, brokers, custodians, VCC/fund administrators, lawyers, tax advisers, CSPs (now ACRA-registered), and auditors. Each should actively support DI/LBS/KYC compliance rather than obstruct it. Include service-level terms for prompt KYC updates and document submissions.
GIP equity policy:
If pursuing GIP, formalise the S$50 million SG-equities sleeve in investment-committee rules. Define approved exchanges, manager-selection criteria, rebalancing processes, and guardrails on liquidity and volatility. Coordinate with banks and custodians so reporting to EDB/MTI is unambiguous.
Transfer-pricing discipline:
Intra-group loans are a common audit target. Ensure you maintain (i) rate analyses or IRAS indicative-margin evidence, (ii) loan agreements with market-based terms, and (iii) an annual review calendar.
Source-of-funds/wealth preparation:
Even as incentives accelerate, regulators, banks, and CSPs scrutinise SoF/SoW more than ever. Prepare dossiers early to prevent prolonged back-and-forth requests that could stall approvals or transactions.
Common Mistakes in 2025 and How to Avoid Them
- Confusing NAV with DI values:
- Some offices still plan AUM using net asset value out of habit. In 2025, MAS measures AUM strictly on Designated Investments. Maintain quarterly DI reports through your administrator or back office to ensure accuracy.
- Delaying LBS spending until year-end:
- Rising professional fees and tight December schedules make last-minute spending costly. Distribute LBS expenditures evenly throughout the year.
- Ignoring the GIP equity requirement:
- For permanent residency applicants, this is now non-negotiable. REITs and Business Trusts no longer counttoward the S$50 million. Build direct equity exposure early to avoid non-compliance.
- Working with unregistered CSPs:
- Engaging a provider not registered with ACRA is a direct compliance and reputational risk. Always check the register, obtain proof of policies, and include AML/CFT obligations in contracts.
- Backdating or omitting transfer-pricing documentation:
- Even with IRAS’s indicative margin, missing or late files can trigger penalties. Keep documentation current and tie reviews to your fiscal calendar.
NB! The information provided in this article is for general informational purposes only and does not constitute legal advice. While we strive to ensure the content is accurate and up-to-date, it should not be relied upon as a substitute for professional consultation. For personalized advice or assistance with legal matters, please contact our specialists directly.
RSBU Group Expertise
We have extensive experience in providing legal and financial support in Singapore for over 13 years. From choosing the right tax scheme (Section 13O, 13U, or 13D) to structuring investments and ensuring compliance with Singapore’s regulations, our team provides end-to-end support. We assist with operational setup, hiring professionals, and developing long-term strategies for wealth preservation and growth. Whether you need help with establishing a Single Family Office (SFO) or scaling a Multi-Family Office (MFO), we offer the expertise and resources to make the process seamless and efficient.
We have extensive experience in providing legal and financial support in Singapore for over 13 years. From choosing the right tax scheme (Section 13O, 13U, or 13D) to structuring investments and ensuring compliance with Singapore’s regulations, our team provides end-to-end support. We assist with operational setup, hiring professionals, and developing long-term strategies for wealth preservation and growth. Whether you need help with establishing a Single Family Office (SFO) or scaling a Multi-Family Office (MFO), we offer the expertise and resources to make the process seamless and efficient.