Wealthy families who seek to establish single-family offices in Singapore will face enhanced due diligence reviews as part of the government’s effort to crack down on money laundering and fraud. The enhanced measures take effect this month.
The Monetary Authority of Singapore (MAS) will suspend or withdraw tax incentives — which have helped make the island nation a popular destination for family offices — if it detects adverse activities and if applicants are being investigated for money laundering or terrorism financing, said Gillian Tan, MAS’ assistant managing director for development and international.
One of the reasons for the enhanced measures was a recent money laundering case involving a family office that was awarded tax incentives by the MAS, said Alvin Tan, Singapore’s minister of state for trade and industry.
The screening process will be done by a panel of specialized firms, which will provide those findings to regulators. If adverse information is uncovered, the applicant may be required to provide more information, including a certificate of noncriminality from the country where the negative finding originated.
Rather than receive tax incentives, some family offices use Singapore’s Global Investor Programme to establish residency in the nation.
In recent years, more families have chosen to establish their family office in Singapore — the number of single-family offices receiving tax incentives increased from 700 in 2021 to 1,100 in 2022.