THE recent tightening of regulations for family offices in Singapore does not seem to have dissuaded wealthy investors, with a growing number anecdotally pursuing this route to permanent residency after the Global Investor Programme (GIP) scheme was expanded in 2020 to include them.

Ultra-high net worth families seeking to move their assets here form the largest category of investors under the enhanced GIP, professional service providers told The Business Times (BT).

Application figures were not available from the Economic Development Board (EDB), which manages the scheme. But the Monetary Authority of Singapore (MAS) has disclosed that there were about 400 single family offices in Singapore as at end-2020, doubling from the year before.

“The number of family applications we handled largely reflects the increase reported,” said Dentons Rodyk chief operating officer Loh Kia Meng, who co-heads the firm’s high net worth and family office and trust, estates and wealth preservation practices.

The EDB expanded the list of eligible GIP applicants in March 2020 by adding next-generation business owners, founders of fast-growing companies and family office principals. Investors had previously been required to put at least S$2.5 million into a new or expanding business, or a fund invested in Singapore-based companies.

Vikna Rajah, head of tax, trust and private client at Rajah & Tann, told BT that the law firm has seen “a slight increase in the number of GIP applications” under all 3 new categories since the change. The firm expects this trend to continue in light of the initial public offerings of high-growth companies, and government investments in late-stage private funding.

Lee Woon Shiu, group head of wealth planning, family office and insurance solutions at DBS Private Bank, similarly said that overall applications have seen “strong double-digit growth” since 2020.

International lawyer Zac Lucas – who specialises in private wealth and succession planning – told BT that the main interest is in family offices, as well-endowed households look to professionalise and restructure white-label family fund arrangements.

DBS’ Lee said: “The pandemic was a wake-up call for many ultra-high net worth families, on the crucial necessity of having a Plan B in place for the management of their most crucial asset.”

Besides being included under the GIP, Drew & Napier director of tax and private client services Ong Sim Ho said that family offices have increasingly been used to boost GIP applications more generally, with investors setting them up to demonstrate their long-term commitment to Singapore.

Observers told BT that clients hail from a range of source markets: mainly North and South Asia, followed by South-east Asian countries like Indonesia and Malaysia.

Recently, they have also seen an uptick in investors leaving Hong Kong and mainland China for Singapore instead.

Interest in Singapore PR status has been even higher during the pandemic, owing to “global pressure in the respective home countries and mobility planning”, said Batoul Achour, global immigration manager at London-based law firm Hudson McKenzie, which specialises in immigration.

She cited recent unrest in Hong Kong and the push for a “common prosperity” agenda in mainland China as other factors prompting interest in moving to Singapore.

Ong added that Singapore’s public health approach to the pandemic may have “reinforced the attractiveness of residency here” compared with other investment destinations.

Another factor in Singapore’s favour may be the ongoing crackdown in Europe on so-called “golden visas” or “golden passports”, suggested Lucas.

In the wake of recent sanctions against Russian oligarchs and their families, the European Commission has called on member states to tighten their residence-by-investment offerings.

While the MAS recently raised the threshold for family offices to qualify for tax breaks, the bar is still higher under the GIP than under the latest tweaks to the prevailing Income Tax Act.

Family office funds regulated by the Act now face a minimum fund size of S$10 million at the point of application, and must raise the value of assets under management to S$20 million within 2 years.

Funds of S$100 million and above must also make business spending of at least S$1 million, among other changes that took effect on Apr 18, 2022.

In comparison, family office principals under the GIP need at least S$200 million in net investible assets, excluding real estate. The family offices must also employ 10 or more people, including at least 5 Singaporeans, and incur at least S$2 million in annual business costs.

Achour, from Hudson McKenzie, added that the success of applications depends less on the dollar value of investments, and more on “what the investors can contribute” over 5 to 10 years.

Still, the GIP investment thresholds may dissuade some investors from considering Singapore, said Lucas, who pointed to feedback from some clients, especially those from South Asia.

“It does seem rather odd that the threshold is so high in comparison to the other options that are available. They can’t get their head around it… It’s out of sync with the market generally,” he said, adding that some view Dubai as an attractive alternative destination.

Singapore, which has offered residence for investment since 1960, introduced the GIP in 2004.

The government has previously disclosed that some 1,800 applicants were granted PR status under the scheme as at mid-2017, with S$1.8 billion yielded in business spending from 2011 to 2016. Updated figures were not available when BT contacted the EDB in 2020 and 2022.