Set up a Singapore family office: VCC, 13O, and 13U explained
Singapore is the world's second-largest family office hub after Switzerland, with over 1,100 family offices managing assets across Asia and globally. The combination of VCC structures, MAS-regulated tax exemptions, and a 130+ treaty network makes it the default choice for wealth families seeking Asia exposure.
The standard setup is a Singapore Pte Ltd (the family office management company) managing a VCC (the investment vehicle). The management company applies for Section 13O or 13U tax exemption — exempting the VCC's investment income from Singapore tax. Requirements: S$20M AUM minimum (13O) or S$50M (13U), 2–3 investment professionals, and local annual spending of S$200k–S$500k. Establishment takes 3–6 months from first meeting to MAS approval.
Why families choose Singapore
Political stability
Singapore has maintained AAA sovereign credit ratings from all three major agencies since 1995. English common law, independent judiciary, and zero corruption index ranking make it the most legally secure wealth management jurisdiction in Asia.
Tax efficiency
Section 13O and 13U exemptions eliminate Singapore tax on qualifying investment income — dividends, interest, capital gains, and derivatives — for family offices meeting AUM and staffing thresholds. No capital gains tax. No inheritance tax. No wealth tax.
VCC structure
The Variable Capital Company allows multiple sub-funds under one umbrella, ring-fenced assets, flexible capital returns to family members, and a single consolidated MAS filing. More flexible than a traditional Cayman LP and Singapore-regulated for tax treaty access.
130+ treaty network
Singapore's double tax treaties with India, China, US, UK, Indonesia, Vietnam, and 125+ other countries reduce withholding tax on dividends, interest, and royalties received by the Singapore family office. This is the core structural advantage over BVI or Cayman vehicles.
Talent and succession
Singapore's Employment Pass and ONE Pass provide straightforward paths for family members and investment professionals to relocate. Common law succession planning, trust law (Singapore Trust Companies Act), and philanthropy frameworks (IPCs) are all well-established.
Asia co-investment access
Singapore concentrates the largest cluster of Asia-focused private equity, venture capital, and alternative investment managers outside Hong Kong. A Singapore-based family office gains direct access to co-investment opportunities, deal flow, and limited partner relationships across Southeast Asia, India, and Greater China.
Section 13O vs Section 13U: comparison
The two primary MAS tax incentive schemes for Singapore family offices. Both exempt qualifying investment income from Singapore corporate tax.
| Condition | Section 13O (formerly 13R) | Section 13U (formerly 13X) |
|---|---|---|
| Minimum AUM | S$20M at application; S$50M within 2 years | S$50M at application |
| Investment professionals | Minimum 2 (at least 1 investment professional) | Minimum 3 (at least 1 investment professional) |
| Local annual spending | S$200,000/year minimum | S$500,000/year minimum |
| Investor domicile restriction | Investors must be Singapore entities/persons or non-Singapore non-individuals | No domicile restriction on investors |
| Fund vehicle | VCC, LP, or Pte Ltd | VCC, LP, or Pte Ltd |
| Tax exemption scope | Dividends, interest, gains, derivatives | Dividends, interest, gains, derivatives |
| Best for | Single family offices with primarily Singapore/Asian investors | Multi-family offices, global families, larger AUM |
The standard family office structure
How a Singapore single family office is typically set up — two entities, one MAS application.
Entity 1: Family Office Management Company (Pte Ltd)
A Singapore Pte Ltd owned by the family. This entity employs the investment professionals, holds the MAS exemption (not a licensed fund manager since it manages only family assets), and invoices the VCC for management fees. The Pte Ltd applies for the Section 13O or 13U exemption on behalf of the fund it manages.
Entity 2: Variable Capital Company (VCC)
The VCC is the investment vehicle — it holds the assets. Each asset class or strategy can be in a separate sub-fund (e.g., Sub-Fund A: public equities; Sub-Fund B: PE and venture; Sub-Fund C: real estate). Assets are legally ring-fenced between sub-funds. The VCC is managed by the Pte Ltd management company.
MAS application process
The management company submits an application to MAS for the 13O or 13U incentive. MAS reviews the investment mandate, AUM evidence, staffing plan, and local spending projections. Approval typically takes 2–4 months. The VCC can be incorporated before MAS approval, but the tax exemption only applies from the date of MAS approval.
Ongoing obligations
Annual MAS reporting; quarterly/annual financial statements for the VCC; evidence of meeting AUM, staffing, and spending thresholds each year. VCC must appoint a MAS-licensed fund administrator. The management company must file corporate tax returns (showing tax-exempt income) with IRAS. Karman provides full ongoing VCC compliance including fund administration.
Frequently asked questions
What is the minimum AUM to set up a Singapore family office?
For Section 13O: minimum AUM of S$20 million at application, growing to S$50M within 2 years. For Section 13U: minimum AUM of S$50 million at application. Both require a minimum of 2 (13O) or 3 (13U) investment professionals and specific annual local business spending thresholds of S$200k (13O) or S$500k (13U).
Do I need a CMS licence for a single family office?
No. A single family office managing only the assets of a single family (and their connected persons) is exempt from the requirement to hold a Capital Markets Services (CMS) licence under the Securities and Futures Act. The exemption applies as long as the family office does not solicit assets from or manage assets for third parties.
What is a VCC and why do family offices use it?
A Variable Capital Company (VCC) is a Singapore corporate fund vehicle with flexible capital structure. It allows multiple sub-funds under one umbrella, ring-fenced assets between sub-funds, and flexible capital distributions to investors. Family offices use VCCs to hold different asset classes in separate sub-funds while maintaining one consolidated governance structure and one set of MAS filings.
What are the local spending requirements for 13O and 13U?
For 13O: S$200,000/year minimum in Singapore-based business spending (staff costs, professional fees, investment management expenses). For 13U: S$500,000/year minimum. Spending must be genuine Singapore-based — salaries paid to Singapore-based staff, fees to Singapore advisers, office rent in Singapore. Remote-only arrangements don't qualify.
Can a non-Singapore family use a Singapore family office?
Yes. Singapore imposes no nationality or residency requirement on family office founders or beneficiaries. The management company and its staff must be Singapore-based, and the VCC must be Singapore-incorporated, but the underlying family can be based anywhere. This is why families from India, China, Indonesia, the Gulf, and Europe all use Singapore family offices.
How long does it take to set up a Singapore family office?
Company and VCC incorporation: 1–2 weeks. MAS incentive application preparation and submission: 4–8 weeks. MAS review and approval: 2–4 months. Realistically, plan for 4–6 months from first engagement to operational family office with MAS approval. Karman project-manages the entire process.
Guides and resources for family offices
Ready to establish your Singapore family office?
Karman provides end-to-end family office setup — VCC incorporation, MAS 13O/13U application, fund administration, corporate secretarial, and annual compliance. We work with families from India, GCC, Indonesia, China, and Europe.
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