Setting up a family office: 3 families share their journeys and what draws them to Singapore

There are an estimated 700 single-family offices (SFOs) as at end-2021 in Singapore and about 200 of them are awaiting approval for their tax incentive applications, according to the Monetary Authority of Singapore (MAS).

An SFO manages the assets belonging to a family and is not required to be registered or licensed by MAS as it does not deal with third-party monies.

However, many SFOs apply for tax incentives on the funds that they manage, so they can be exempted from income tax on certain investments.

An MAS spokesman told The Straits Times that the growth of family offices in Singapore is in line with the growth of family offices globally in the past few years. “There is a mix of Asian families and non-Asian families coming to Singapore to set up family offices to support their investments in the region.”

The Straits Times takes a look at the family office scene in Singapore.
 

1. Have set up a family office

Mr Wang Jue, 35, is a Chinese entrepreneur in the art gallery business from Chengdu, China.

Mr Wang set up his family office here with his sister in January 2022 to manage their investments and grow the business.

This is their only family office, and is among the 200 SFOs waiting for MAS approval for tax exemptions.

“We intend to bring in some of our overseas business into Singapore and expand our business. The family office will help to facilitate that,” he said in Mandarin.

Mr Wang conducts his business in China through his art gallery in Chengdu. The art gallery features his collection of works by Czech artist Alphonse Mucha, a pioneer of the late 19th-century to early 20th-century Art Nouveau movement.

Mucha is known for his distinctive style of portraying women using traditional flowers, hair motif and swirling lines.

Mr Wang started collecting these art pieces when he was a student in Britain. During the Covid-19 pandemic, he expanded his collection and is now the biggest private collector of Mucha works besides the artist’s family.

With his family office in place, he is ready to bring some of his Mucha art pieces to Singapore.

“We want to hold global art shows around the world. In order to facilitate our plans to expand our business overseas, Singapore was chosen as our base due to its various open policies and friendly business environment,” he said.

When his business develops further, Mr Wang plans to do philanthropic activities by supporting history/cultural programmes in Singapore as he said there is a fit with his art gallery.

Besides his art gallery business, Mr Wang has invested in electric vehicle, clean energy, and food and beverage projects. One of his investments, Clean Energy Technologies, is listed on the Nasdaq stock exchange in the United States.

He will be transferring his personal investments, which include US stocks and digital currencies, art pieces, cash and other overseas assets to his family office in Singapore.

Mr Wang said he will invest in the local stock market but he is staying clear of the local property market because property prices have “gone up by too much”.
 

2. In the process of setting up a family office

Ms Lim Tjie Minn is the Business Development Manager of her family’s Kosma Holdings in Singapore. She, her parents and her brother run the family business.

Kosma used to be in the coffee-shop business but Ms Lim’s parents pivoted and now lease out space to other F&B businesses.

Ms Lim, 37, started in the family business when she was 21 and she is now one of its key decision-makers. She is also taking charge of the family’s plans to set up a family office.

“It is not a very fast process. It takes about a year or two.  Along the way, there will be questions and documents that we need to furnish... We are still in the process of getting all the necessary information,” she said, adding that it might be tough to get the family office up and running this year.

Ms Lim said the family decided to set up the office to ensure proper management of its assets so that wealth gets passed down to the next generation.
 

“We want the family wealth to be managed professionally. We will need to hire external professionals after the family office is set up because they will know better how to manage our portfolio.”

Any decisions from the external professionals will still have to be reviewed by the family, Ms Lim said. “At the end of the day, the decisions will still be made by the family, whether we want to go through with an investment.”
 

3. Exploring and finding out more about family offices

Ms w is the 32-year-old Director of the family-run Panaflo Controls, part of Malaysia’s Pantech Group, which specialises in steel pipes, valves and fittings for the oil and gas industry.

From its headquarters in Malaysia, the company has expanded to Singapore and Britain.

Ms Chew said her family is in the exploratory stage of trying to understand more about family offices. “We still need to find out more but that is definitely the direction that we want to proceed.”

The family invests in a lot of properties and its investments are all very fragmented, so having a family office can “streamline our wealth”, Ms Chew added.

Ms Chew also plans to hire an expert to manage the family office when it is up and running, so at least “the family wealth is more protected”.

For the family office to move ahead, Ms Chew said it is important to get everyone’s approval because if “one family member disagrees, then they cannot move forward”.

However, it will take a while for the older members of the family to come on board, she added.

“We are not talking about a few thousand dollars. We are talking about a few million dollars. So definitely, it takes time for the older generation to be open about this and for the family to align with it,” said Ms Chew.

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.