Significant changes to the Singapore Tax Incentive Scheme application process announced

On 15 March 2024, the Monetary Authority of Singapore (MAS) announced significant changes to the application process for the S13O and S13U tax incentive schemes for single-family offices (SFOs). These updates aim to streamline the application process, providing greater clarity and efficiency for applicants. With Singapore's growing popularity as a base for high net worth individuals, these changes are timely and beneficial. 

Key Changes to the Processing Regime 

The revised process merges the old Annex A and Annex B stages into a single comprehensive submission helping simplify the application. This means that all necessary information must be prepared and submitted at the beginning of the application process. The new electronic form (E-Form) submission is expected to take about three months to review, with the formal submission process reduced to about six months. 

Previously, the application process was segmented into multiple stages, each taking several months. The consolidation under the new regime aims to reduce uncertainty regarding processing times and set clearer expectations for applicants. 

Impact on Pending Applications 

 Applicants who submitted applications before 28 April 2024 had to decide whether to remain under the old email processing track or switch to the new regime. 

The new regime also imposes a stricter one-month response time for applicants when additional information is requested by MAS. This tighter timeline is designed to attract legitimate high net worth individuals and families while deterring those seeking to misuse Singapore’s financial hub status. 

Preparatory Tasks for S13O/U Applications 

Before commencing an S13O/13U application, several preparatory tasks must be completed: 

1. Incorporating the Fund Company and the Fund Management Company 

2. Opening the Fund Company’s Singapore Private Bank Account 

3. Recruiting Designated Investment Professionals (IPs) 

4. Ensuring IPs complete their Employment Pass (EP) formalities 

One of the significant challenges has been opening the Fund Company’s private bank account, which can take over three months due to rigorous KYC and AML checks. Additionally, the requirement to hire at least one non-family member as an  Investment Professional has posed recruitment challenges. 

Equiom’s Expertise 

It is increasingly popular to hold the fund vehicle and family office within a Singapore trust structure due to the robust legal and regulatory framework. At Equiom, we have extensive local knowledge in setting up these structures. Lucia Luchetti, Director of Trust Services at Equiom, acts as a director for several Singapore companies held in trust. Our clients have successfully secured exemptions under the S13O/U schemes, with several others in the process of doing so. This setup ensures optimal asset protection and efficient wealth management, aligning with Singapore's reputation as a premier financial hub. 

Summary 

The updates to the S13O/U tax incentive schemes processing regime by the Monetary Authority of Singapore are a step towards making Singapore an even more attractive destination for high net worth families. These changes simplify the application process, enhance efficiency, and provide clearer guidelines for applicants. If you require assistance or advice on navigating these updates, please contact our local team who can assist.. 

For more information, please contact Lucia Luchetti. 

This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. This article cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained within this article without obtaining specific professional advice. Please contact Equiom Group to discuss these matters in the context of your particular circumstance. Equiom Group, its partners, employees, and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this article or for any decision based on it.