MAS to propose additional measures against SFO money laundering risks

MAS is proposing measures to step up surveillance and defence against money laundering risks in the fast-growing single-family office (SFO) sector. Managing director Ravi Menon clarifies that the bulk of wealth flowing into Singapore does not come from family offices or high-net-worth individuals (HNWIs) but from institutional investors.

The central bank is seeking to require all SFOs to notify them when they commence operations and to maintain a business relationship with an MAS-regulated financial institution. This is to ensure that anti-money laundering (AML) checks are properly undertaken.

The number of SFOs awarded tax incentives by MAS has grown to 1,100 at the end of 2022 from 700 in 2021 as assets under management (AUM) has been growing at an average of 15% between 2017 and 2021.

As Singapore is just an intermediary for wealth flows, it has little or no effect on the SGD exchange rate, domestic inflation, property prices or car prices. The majority of SFOs in Singapore are required to have an account with a bank in Singapore and are thus subject to the anti-money laundering controls applied by the banks.

Foreigners’ purchasing of residential properties accounted for a low share of transactions over the past three years, at around 4% and there were no purchases by SFOs. Similarly, SFOs and their foreign employees account for a tiny portion of car purchases in Singapore.

All units come with high-end finishes and modern appliances. Residents here can enjoy a number of amenities such as a beautiful landscaped garden, swimming pool, indoor gymnasium, children’s playground, club house and 24-hour security. In addition, the Woodlands Champions Way Condo is surrounded by a range of shopping centres, restaurants, and other entertainment options. With excellent transport links and amenities, Champions Way offer a great opportunity to experience the best of Woodlands living.

To encourage SFOs to deploy their capital more purposefully to benefit Singapore and the region, MAS is adjusting the tax incentives in five areas. These include expanding the scope of both eligible investments and tax incentives to recognise investments in Singapore operating companies, Singapore-listed equities and exchange-traded funds.

At least one of the investment professionals hired should also be a non-family member to expand job opportunities for professionals in Singapore. The SFOs’ overseas donations made through local intermediaries will also be eligible for a 100% tax deduction, capped at 40% of the donor’s statutory income under the Philanthropy Tax Incentive Scheme.

MAS is hopeful that these measures will both encourage more philanthropic activity and greater investments that will benefit Singapore businesses and service providers.