Singapore will change the tax incentives it gives to qualified family offices in an effort to boost the hiring of locals and investment in the city's equity markets, as rival Hong Kong targets 200 family offices by 2025.
Tax incentives will also be adjusted to encourage these firms to invest in climate-related projects and undertake more philanthropy through Singapore, the managing director of the Monetary Authority of Singapore, Ravi Menon, said.
Even though the increase of family offices has boosted the overall assets under management, much of that wealth is not invested in Singapore, blunting expectations that their enlarged presence would result in a flood of local jobs. The planned measures aim to fix this.
The bulk of wealth flowing into Singapore was from institutional investors, rather than family offices or wealthy people, Menon said.
The single-family offices that applied for and were granted tax incentives managed about S$90 billion (HK$520.2 billion) of assets in 2021, less than 2 percent of the S$5.4 trillion total assets managed in Singapore, Menon said.
Singapore's monetary authority incurred a record net loss of S$30.8 billion in fiscal year 2022-23. Menon said the loss showed the challenges faced by policymakers as inflation lingers, but the loss was not a cause for concern.
The MAS maintained its forecast for Singapore's growth this year in a range of 0.5-2.5 percent, after posting a 3.6 percent expansion in 2022.
