Singapore reworks its family office tax conditions, and sets a November deadline
MAS Circular FDD Cir 05/2026 changes the section 13O, 13OA and 13U conditions for single family office funds from 1 August 2026: phased hiring, wider spending bands, a simplified deployment test, and a three-month banking grace period.
On 31 July 2026 the Monetary Authority of Singapore issued Circular FDD Cir 05/2026, reworking the economic conditions attached to the section 13O, 13OA and 13U tax incentives that single family offices in Singapore depend on. Most of the changes took effect on 1 August 2026. A few apply retroactively from 1 January 2025.
The circular refines rules MAS introduced on 1 October 2024, which themselves sat on top of conditions imposed in April 2022 and July 2023. A Singapore family office fund is now governed by one of several vintages of conditions, depending on when its award was granted, and the circular does not affect them equally.
Hiring requirements phased at the point of application
Under the July 2023 conditions, a single family office applying for a 13O or 13OA award had to employ two qualifying investment professionals from the outset, at least one of them from outside the family. That is now staged. An applicant may enter with one investment professional, family member or not, and hire the second by the end of the financial year relating to the first year of assessment. For 13U funds, the entry requirement falls from three professionals to two, with the third due on the same timetable. The non-family requirement stays.
Reporting on assets under management in designated investments has been simplified as well. An SFO fund now tests the threshold at application and at each year end rather than continuously. Baker McKenzie reads this as removing the burden of constant tracking. The thresholds themselves are unchanged: S$20 million for 13O and 13OA, S$50 million for 13U.
Local spending moves in two directions
The tiered local business spending requirement widens considerably. A fund now needs S$250 million of AUM in designated investments, rather than S$50 million, before it leaves the S$200,000 floor, and S$2 billion rather than S$100 million before it reaches S$1 million. That drops a large group of mid-sized funds into a lower band.
For funds that remain in the upper tiers, RSM Singapore reads the revised table as tightening the cash component: more of the requirement must be met by actual local business spending rather than by charitable donations or blended finance grants.
The capital deployment requirement has been cut from six eligible categories to three: investments listed on approved exchanges, investments distributed by MAS-licensed institutions in Singapore, and unlisted Singapore-incorporated operating companies with substantive local presence. The 10 per cent of AUM in designated investments, or S$10 million if lower, is unchanged, and four types of investment now count at twice their value.
Two portfolio changes reach beyond the compliance file. The 5 per cent cap on physical investment precious metals disappeared on 1 August, so a family office can now hold considerably more bullion inside the incentive. Tokenised interests in an existing designated investment also qualify, provided the token confers the same rights and obligations as direct ownership.
The deadline with a date on it
SFO funds whose letter of award never specified a Singapore banking account have three months from 1 August 2026 to open one with an MAS-licensed institution. That window closes at the start of November. MAS may revoke the award from the end of the grace period if the account is not in place.
What it means for family offices
The direction is a lighter entry and a firmer floor. Singapore has made the regime easier to join, with fewer hires required up front and less continuous reporting, while holding on to the substance conditions that decide whether an incentive survives from year to year. For families already holding an award, the work is unglamorous but time-sensitive: establish which vintage of conditions applies, because awards granted before April 2022, in 2022, and from July 2023 are now on three different footings, and only two of them are touched by this circular. The banking account grace period is the single item with a hard date, and it expires in about two months.
Sources: Baker McKenzie; RSM Singapore.