No wonder then that authorities are coaxing them to do more. The Monetary Authority of Singapore last week promised $2 in incentives for every $1 family offices put into climate-related projects where they don’t even expect to see their money back, let alone hope for a return on it. Similar concessions will also be on offer if they invest in locally traded equities, either directly or via funds. But it won’t be a free lunch. Rules were tightened just last year; and they may be tweaked again. New entrants will have to notify the central bank when they start operations as well as maintain a relationship with an MAS-regulated financial institution, according to a Bloomberg report.
Singapore has seen a boom in family offices. The number of investment vehicles that oversee assets exclusively for the benefit of a single ultra-rich household has risen 22-fold over the past five years, thanks to liberal tax exemptions. But what have the wealthy brought to the table?
The short answer: Very little. The assets of those who claim these fiscal sops made up barely 2% of the US$4 trillion managed in the Asian city-state in 2021, and their linkages with its economy are practically non-existent. While opposition lawmakers would love to blame the uber-affluent foreigners for some of the property-market froth and high cost of living, the reality is that no family office has done a local residential-property transaction in the past six years, a government minister informed parliament in May.
