SINGAPORE Trends and Developments Contributed by: Lee Woon Shiu and Cheung Kuan Swan (Catherine), DBS Private Bank
meaningful benefits to the local economy, have been refined a few times in recent years. These changes reflect the government’s commitment to ensuring that the wealth managed in Singapore contributes directly to domestic growth and develop - ment, especially as the city-state positions itself as a leading hub for wealth management. From 2025/2026, the requirements for SFOs seek - ing tax exemption have become more rigorous. The minimum assets under management (AUM) thresh - olds have been raised, ensuring that only substantial and professionally managed funds qualify. The scope of “Designated Investments” has been redefined to prioritise investments that generate tangible benefits within Singapore. This means that SFOs must focus on deploying capital into areas that have a clear domestic economic or social impact such as local enterprises, infrastructure, and projects that foster innovation or sustainability. As of 2025–2026, SFOs operating under both the Schemes are subject to a tiered annual business spending requirement which is directly linked to their AUM. For AUM below SGD50 million (ie, S13O), a min - imum local business spending (LBS) of SGD200,000 is required. If the AUM is between SGD50 million and SGD100 million, the minimum total business spending is required to be SGD500,000, of which SGD200,000 must be LBS. For SFOs with an AUM of SGD100 million or more, the mandatory annual LBS is SGD1 million. This eligible LBS encompasses various cat - egories such as management fees, tax advisory fees, legal fees and salaries paid to Singapore-based pro - fessionals. Toward the end of 2025, MAS announced plans to review and simplify the Schemes. The primary goal was to reduce the administrative burden on family offices while better aligning the framework with cur - rent industry need, and ensuring Singapore remains a leading centre for global wealth management, espe - cially amid rising competition from other regional cen - tres. Some simplifications include the following. • Reduction in documentation – the aim is to reduce the amount of paperwork at the initial stage which
includes minimising excessive pre-approval checks and using AI. More standardised templates for investment strategies and ownership declara - tions are expected in order to reduce the need for bespoke legal drafting for every submission. A private banking working group, co-led by MAS, has been established to improve account opening efficiency through AI and automation. • Easing of reporting requirements – a self-decla - ration model for certain ongoing criteria is in the works and expected to be launched soon. This is to move away from the need for exhaustive annual audits for every single criterion check. • Expanded eligible investments – to encourage more diverse and impactful investing, the scope of what qualifies as eligible investments has broadened to include non-listed funds distributed by Singapore-licensed financial institutions and certain green or climate-related products. There is also a renewed emphasis on Singapore-listed equi - ties, REITs, and Business Trusts. To boost philanthropy In recent years, philanthropy has become a hot topic in the wealth management space. With more private banking clients expressing interest in making an impact by giving back to society, more philanthropic funds are expected to flow into Singapore. The Singa - pore government has introduced a range of tax incen - tives in the philanthropic space primarily to foster a strong giving culture, strengthen social cohesion and position Singapore as a leading regional and global philanthropic hub. In the past, Singapore’s tax deduction framework for donations was primarily focused on local charitable giving where tax deductions were generally granted only for donations made to Institutions of a Public Character (IPCs) or the Singapore government for causes benefiting the local community. This meant that donations to overseas causes typically did not qualify for tax deductions. The rationale behind this was a bias towards “doing good in Singapore”, ensur - ing that tax-deductible donations exclusively bene - fited the Singapore community. Approved donations such as cash donations to IPCs could receive a 250% tax deduction on the donated amount.
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