A single family office under 13O or 13U, or a life policy? Costs and rules compared
A single family office with a 13O or 13U fund and a life policy do different jobs, so most families are not choosing between them. The schemes exempt qualifying investment income of an approved fund from Singapore tax. In return MAS asks for substance: at least S$20 million (13O or 13OA) or S$50 million (13U) in designated investments, two or three investment professionals including one who is not family, annual local business spending of at least S$200,000, capital deployment of 10% of AUM or S$10 million, whichever is lower, in eligible investments, and a private banking account with an MAS-licensed institution. On our estimates, running costs start in the hundreds of thousands a year. A life policy creates no Singapore tax saving for a family taxed only here, because individuals already pay little or no tax on most investment returns. Its uses are succession, foreign tax rules and portability. The tax benefit of 13O or 13U matters mainly where the vehicle is a company that would otherwise pay tax.
Singapore law, MAS conditions and IRAS guidance as at 21 October 2026. This compares structures; it does not tell any family which to use.
PPLI.com is a research publisher, not an insurer, broker or financial adviser, and is not licensed by the Monetary Authority of Singapore. Nothing here is an offer of insurance. To buy a policy, deal with an insurer or adviser licensed or exempted by MAS and check it on the MAS Financial Institutions Directory.
Two different questions
Families looking at a single family office or a "13O alternative" (or searching 家族办公室 新加坡) are usually asking two things at once: how to run the family's money, and how it should be taxed and passed on. A single family office (SFO) with a tax-incentivised fund answers the first question and part of the second. A life policy answers only part of the second.
What 13O and 13U actually give
Sections 13O and 13U of the Income Tax Act 1947 (formerly 13R and 13X) exempt a qualifying fund's "specified income" from "designated investments". In plain terms, gains, interest and foreign dividends earned by the approved fund vehicle are not taxed in Singapore while the fund meets its conditions. The exemption sits with the fund, not the family. Section 13O covers Singapore fund vehicles; section 13OA, which MAS lists alongside 13O and 13U, covers Singapore limited partnerships on the same conditions as 13O, following the Budget 2024 extension; section 13U is the enhanced tier with higher entry conditions. A variable capital company (VCC) can be the fund: IRAS treats a VCC as a company and a single entity for income tax, and it may be considered for these incentives.
Budget 2024 extended the schemes to 31 December 2029. MAS decides awards and revises the conditions by circular.
We could not open sections 13O and 13U on Singapore Statutes Online, so this summary of what is exempt rests on IRAS, MAS and secondary sources. Check each asset class against the list of designated investments.
13O and 13U requirements for a single family office fund
MAS sets separate conditions for funds managed by single family offices under sections 13O, 13OA and 13U. The table follows MAS's family office page and its FAQs on the family office schemes, both as read on 21 October 2026. MAS's page refers to its Circular on Tax Incentive Schemes for Funds; four firms identify this as FDD Cir 05/2026 of 31 July 2026, applying to awards from 1 August 2026. We could not open the circular itself, so its number, date and transition rules are reported, not confirmed.
| Condition | Section 13O or 13OA (SFO fund) | Section 13U (SFO fund) |
|---|---|---|
| Minimum AUM in designated investments | S$20 million | S$50 million |
| When AUM is tested | As at the end of each basis period (MAS FAQs). If AUM is below the minimum then, the fund cannot claim the exemption for that period, but can again in a later period in which it meets the minimum and all other conditions | |
| Investment professionals | At least 2, including at least 1 non-family member | At least 3, including at least 1 non-family member |
| Phasing of hires (2026 circular, secondary) | May apply with 1; the second hired within the first year of the award | May apply with 2; the third hired within the first year of the award |
| Annual spending | Tiered by AUM, from S$200,000 (see below) | |
| Capital deployment | The lower of 10% of AUM in designated investments or S$10 million, in designated investments listed on approved exchanges, or distributed by MAS-licensed financial institutions in Singapore, or in non-listed Singapore companies with an operating business and substantive presence here; some count at 2x | |
| Banking | A private banking account with an MAS-licensed financial institution | |
| Scheme end date | 31 December 2029 | |
MAS requires each qualifying investment professional to be employed as a portfolio manager, research analyst or trader, earn more than S$3,500 a month, spend more than half their time on that work, and be a Singapore tax resident throughout the incentive period. MAS counts at 2x, for capital deployment, Singapore-listed equities, funds investing substantially in them, blended finance instruments distributed by licensed institutions, and qualifying non-listed Singapore companies. Its FAQs add that the family's own operating businesses held by the fund do not count towards the minimum AUM, though they can count towards spending and capital deployment if they are designated investments.
The spending tiers, old and new
MAS's family office page sets a tiered local spending requirement by AUM in designated investments: S$200,000 below S$250 million, all of it local business spending; S$500,000 from S$250 million to below S$2 billion, at least S$300,000 of it local business spending; and S$1 million at S$2 billion or more, at least S$500,000 of it local business spending. The rest may be eligible donations or grants to blended finance instruments distributed by licensed financial institutions in Singapore, recognised at 2x.
These replace the tiers MAS applied from 5 July 2023, which older articles still quote: S$200,000, S$500,000 and S$1 million at thresholds of S$50 million and S$100 million, with S$200,000 of local business spending in each. Firms report that existing awards move to the new tiers from the year of assessment whose basis period ends on or after 1 August 2026, and that awards granted before 18 April 2022 are unaffected. That is reported, not confirmed; check the award letter.
Neither set is the non-SFO tiers. For funds run by managers other than family offices, Withers and RSM report local business spending minimums of S$200,000, S$300,000 and S$500,000 at the same S$250 million and S$2 billion thresholds, phased in for most funds from the year of assessment 2028. Those amounts are not the SFO totals.
Processing time
Press reports on 9 July 2025, quoting MAS deputy chairman Chee Hong Tat, said most applications now took about three months, against up to a year before. We could not find this on an MAS page.
The licence question: the 2026 SFO framework
Fund management normally needs a capital markets services licence. In a media release of 11 June 2026, MAS announced a revised framework for single family offices, in force from 15 June 2026. MAS describes it as structure-agnostic, giving qualifying SFOs a straight-through class exemption from licensing. A qualifying SFO need only notify MAS of its operations, keep an account with an MAS-licensed bank, and file a straightforward annual return stating its total AUM and the bank's name. Existing SFOs have a transition period to 15 June 2027.
MAS sets out the details in FAQs last revised on 31 July 2026, which we could not open. The finer conditions below are as reported by Allen & Gledhill, Rajah & Tann, CMS and WongPartnership. CMS places the exemption in paragraph 5(1)(ba) of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations, which the version we could see on Singapore Statutes Online did not yet show.
- The SFO must be incorporated in Singapore. It may be held through a trust, foundation or other structure.
- It may manage money only for family members (including family trusts and companies wholly owned by and for the family), charities funded only by the family, and key employees (whose assets are capped at 10% of AUM). It must be funded only by the family, with key employees allowed a non-controlling stake of up to 10%.
- A new SFO must notify MAS within 14 days of starting business. The bank account requirement extends to its fund vehicles (with an exception for some foreign fund vehicles). It must name a Singapore-resident employee as MAS contact, and the annual return is due within four months of its financial year end.
- Existing SFOs file a notice of continuation by 15 June 2027.
The exemption and the incentive are separate. An SFO can rely on the exemption and never apply for 13O or 13U.
Where the 13O or 13U benefit really comes from
Start with a Singapore-resident individual investing in their own name. IRAS says gains from buying and selling shares and other financial instruments are generally treated as personal investment gains and are not taxable. Foreign-sourced income received here by a resident individual has been exempt since 1 January 2004, unless received through a Singapore partnership. Singapore dividends are exempt under the one-tier system.
A company is different. IRAS taxes companies at 17%. An investment holding company pays tax on interest, and on foreign dividends received here unless the foreign-income conditions are met (taxed abroad, headline rate of at least 15%). Since 1 January 2024, under section 10L, gains received here from selling foreign assets can be taxable for an entity in a group with entities or places of business outside Singapore, unless it has adequate economic substance here. Individuals are outside that rule. And a company trading actively risks having its gains taxed as income.
So 13O or 13U mostly removes those company-level risks. For a family holding investments personally and passively, much of that value is absent.
What a life policy does and does not replace
An investment-linked policy, including private placement life insurance, holds a portfolio inside an insurance contract: the insurer owns the assets, the policy owner owns the contract.
| Need | SFO with a 13O or 13U fund | Life policy holding a portfolio |
|---|---|---|
| Singapore tax on investment returns | Removes tax that the fund vehicle would otherwise pay | No saving for a family taxed only in Singapore; individuals already pay little or none |
| Foreign tax of family members abroad | Not designed for it; foreign rules may look through the fund | Can matter a great deal, depending on the country and the policy's compliance with its rules |
| Investment control | Full: the family's own professionals decide | Limited: the policy owner cannot direct individual investments; a manager chosen within the insurer's rules does |
| Employment and governance | Creates jobs, a board and a place for the next generation | None |
| Succession | Shares pass under a will, trust or holding structure | Payout to beneficiaries; for Singapore-licensed policies, nominations under the Insurance Act 1966 |
| Portability if the family moves | Tied to Singapore substance and MAS conditions | Moves with the owner, subject to the new country's rules |
| Minimum size in practice | S$20 million under 13O; fixed costs push many families higher | Lower, though charges matter more on smaller policies |
The control row matters most. A policy generally works for foreign tax purposes only if the owner gives up day-to-day investment control (see what you can hold in a policy).
Family office Singapore cost: a comparison at three sizes
The figures below are estimates, not quotes. SFO costs are our estimated annual ranges for two or three investment professionals, an operations person, office, audit, administration and compliance, most of which usually counts towards local business spending. Policy charges are illustrative at 0.6% to 1.2% a year of account value; investment management fees arise under both routes and are left out.
| AUM | Spending floor (current MAS tiers / earlier 5 July 2023 tiers) | Our estimate: SFO running cost a year | Estimate as % of AUM | Illustrative policy charges a year (0.6% to 1.2%) |
|---|---|---|---|---|
| S$20 million (13O minimum) | S$200,000 / S$200,000 | S$400,000 to S$800,000 | 2.0% to 4.0% | S$120,000 to S$240,000 |
| S$50 million (13U minimum) | S$200,000 / S$500,000 | S$600,000 to S$1.1 million | 1.2% to 2.2% | S$300,000 to S$600,000 |
| S$100 million | S$200,000 / S$1 million | S$1 million to S$1.5 million | 1.0% to 1.5% | S$600,000 to S$1.2 million |
At S$20 million an SFO costs a large share of the portfolio every year, so the 13O minimum is an entry threshold, not a guide to the size at which an SFO pays its way. The comparison is not like for like: the SFO cost buys a team and control; the policy charge buys a wrapper. The break-even tool tests policy charges against foreign tax.
The Global Investor Programme family office route
Option C of EDB's Global Investor Programme lets a family office principal apply for permanent residence by setting up a Singapore SFO. The EDB factsheet we opened (marked updated 21 February 2025) requires net investible assets and family office AUM of at least S$200 million, with at least S$50 million deployed in Singapore in EDB-specified investments within 12 months of final approval, and a five-year entrepreneurial, investment or management track record.
Combining the two, carefully
A 13O fund owned through a trust
This is common, and it fits the 2026 framework, which MAS describes as structure-agnostic; law firms report that family trusts may be clients and may sit in the ownership chain. A policy can sit beside it, for a family member abroad or liquidity at death.
A policy owned by a holding company
IRAS's keyman insurance guide (third edition, January 2026) says premiums on a policy with a cash surrender or investment value are not deductible, and that where the business is the beneficiary, premiums are generally treated as spent on acquiring a capital asset, the policy itself. The guide does not cover tax on the proceeds of such a policy, so the company's position needs specific advice or an advance ruling. Whether a policy counts as a designated investment for a 13O or 13U fund we could not confirm; do not assume it.
Worked examples
Hypothetical, with invented names. These show what the published rules point to, not advice.
Example 1: Mr Goh, S$25 million, Singapore family only
Assumptions: Mr Goh, a Singapore citizen, holds S$25 million of listed shares and bonds in his own name. His family are all Singapore tax residents. He trades rarely. A banker suggests a 13O fund.
What the rules point to: his share gains are generally not taxable, and his foreign-sourced income and Singapore dividends are exempt. A 13O fund would save him little Singapore tax while costing, on our estimates, S$400,000 or more a year. A policy would save him none. If succession is the concern, a will, a trust or insurance nominations are usually cheaper tools. On these facts the Singapore tax rules give no reason to do either.
Example 2: the Tan family, S$120 million in a holding company
Assumptions: after selling a business, the Tan family holds S$120 million in a Singapore holding company that receives interest and foreign dividends and trades actively. Two members of the next generation want to work in investing. The family is Singapore resident.
What the rules point to: this is the case 13O and 13U were built for. The company would otherwise face tax at 17% on interest, on foreign income failing the exemption conditions, and possibly on trading gains. An SFO relying on the class exemption, with a 13U fund, would give the family a team, governance and a fund whose specified income is exempt. At S$120 million the spending floor under MAS's current tiers is S$200,000 (it was S$1 million under the 5 July 2023 tiers). A policy adds nothing here for Singapore tax.
Example 3: Mr Rao, S$30 million, children in the UK and US
Assumptions: Mr Rao, a Singapore permanent resident, has S$30 million. One child lives in London and another is a US citizen in New York. He has no wish to employ staff.
What the rules point to: an SFO would cost a large share of his assets. His children's UK and US tax positions are the real issue, and there a policy may have a role, judged under those countries' rules. Our pages on US citizens and life policies and offshore bonds and the UK set out those rules.
Questions to ask before choosing
- Would the money otherwise sit in a company that pays Singapore tax, or with individuals who mostly do not?
- Does the family want its own investment team, and can it fill the non-family professional role with someone it trusts?
- Which conditions apply to the award, the current ones or conditions carried from an older award, and has that been confirmed with MAS?
- Are any family members, now or later, tax resident outside Singapore? If so, under which country's rules is a policy being judged?
- If a policy is proposed, who will own it: an individual, a trust or a company? Has the tax position of that owner been checked?
Where this sits
Background: tax efficiency in Singapore and inheritance tax in Singapore. On policies: universal life, IUL, VUL and PPLI, trust or life insurance and trust and revocable nominations. The broader hub is investment flexibility. For what PPLI is and when it suits a Singapore resident, see private placement life insurance in Singapore. Planning a sale: the liquidity event planner. If you have a question about the research, ask a Singapore research question.
Single family office in Singapore: questions
What are the 13O requirements for a single family office in Singapore?
MAS asks for at least S$20 million in designated investments, at least two investment professionals including one who is not a family member, minimum annual spending tiered by AUM, S$200,000 below S$250 million, capital deployment of the lower of 10% of AUM or S$10 million in eligible investments, and a private banking account with an MAS-licensed financial institution. Section 13OA applies the same conditions to Singapore limited partnerships.
What are the 13U requirements?
At least S$50 million in designated investments, at least three investment professionals including one non-family member, the same tiered spending and capital deployment conditions as 13O, and a private banking account with an MAS-licensed financial institution. For awards from 1 August 2026, firms report that the third professional can be hired by the end of the award's first financial year.
How much does a single family office in Singapore cost to run?
Our estimates, not quotes, put annual running costs at roughly S$400,000 to S$800,000 at S$20 million of assets and S$1 million to S$1.5 million at S$100 million, mainly salaries, office, audit, administration and compliance. Set-up costs are extra.
Does a single family office need a fund management licence?
Not if it qualifies for the MAS class exemption in force from 15 June 2026. MAS says a qualifying SFO need only notify MAS, keep an account with an MAS-licensed bank and file a straightforward annual return, and existing SFOs have until 15 June 2027 to transition. The detailed eligibility conditions, such as incorporation in Singapore and managing money only for the family, family-funded charities and key employees, are as reported by Singapore law firms.
Is a life policy an alternative to 13O?
Only in part. A policy does not create a Singapore tax saving for a family taxed only in Singapore, because individuals already pay little or no tax on most investment returns, and it gives no investment team or control. Its uses are succession, portability and the foreign tax position of family members abroad.
When do the 13O and 13U schemes expire?
Budget 2024 extended the fund tax incentive schemes under sections 13D, 13O and 13U to 31 December 2029. Whether they are renewed after that is a decision for a future Budget.
Can a VCC be used for a Singapore family office?
Yes. IRAS treats a variable capital company as a company and a single entity for income tax, and a VCC may be considered for the 13O and 13U fund incentives. It is one possible fund vehicle, not a requirement.
How long does MAS take to approve a family office tax incentive?
Press reports in July 2025, quoting MAS deputy chairman Chee Hong Tat, said most family office applications were being completed within about three months, compared with up to a year before. We could not find this on an MAS page, so treat it as a reported target that depends on a complete application.
Sources and authorities
MAS: fund tax schemes for family offices; FAQs on the schemes for family offices; media release, 11 June 2026, on the revised SFO framework; VCC Bill speech, 2019. Not opened by us: the MAS Circular on Tax Incentive Schemes for Funds (reported as FDD Cir 05/2026); MAS FAQs on the Licensing Exemption Framework for Single Family Offices (revised 31 July 2026). IRAS: Budget 2024 tax changes; VCC tax framework; gains on shares; foreign-sourced income; s 10L; investment holding companies; corporate tax rate; keyman insurance premiums. EDB: GIP factsheet. Secondary: on the 2026 circular and its transition rules, RSM, PwC, Baker McKenzie, WongPartnership; on non-SFO funds, Alvarez & Marsal, RSM, Withers; on the SFO licence exemption, Allen & Gledhill, Rajah & Tann, CMS, WongPartnership; on processing times, The Online Citizen, Hubbis.
Research checked 21 October 2026 against the MAS, IRAS and EDB pages linked above; the MAS circular and the MAS FAQs on the licensing exemption could not be opened, and the text attributes points taken only from them to the secondary sources. Our editorial standards explain how errors are corrected.
PPLI.com is not licensed by the Monetary Authority of Singapore and does not give financial advice. This is general information about Singapore law and other tax systems, not an offer or invitation to enter into any contract of insurance. Policies issued by insurers not licensed in Singapore are not covered by the Policy Owners' Protection Scheme or by the nomination rules in the Insurance Act 1966.
Eldar leads PPLI.com’s strategy, research and partnerships. He acquired PPLI.com in 2020 and has worked on private placement life insurance since then.
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