Minister of Finance II, Senator Datuk Seri Amir Hamzah Azizan announced the Single Family Office scheme as part of incentive packages for the Forest City Special Financial Zone on 20 September 2024.
Meanwhile, Securities Commission Malaysia (SC) has been tasked with coordinating the Single Family Office incentive scheme.
Meanwhile, Securities Commission Malaysia (SC) has been tasked with coordinating the Single Family Office incentive scheme.
This comes after the Prime Minister Dato’ Seri Anwar Ibrahim’s announcement last year on policies to encourage establishment of family offices in Malaysia to draw a larger pool of investors that will widen the financing support for SMEs and the new economy.
So, let's look at the incentives given...
- The incentive provides for a 0% concessionary tax rate on income generated by eligible investments from the Single Family Office Vehicle (SFOV).
- The Forest City will be the first location in Malaysia to offer a 0% tax rate incentive for Family Offices.
Okok... Before we go further, let's understand the glossary below first 👀:
Good. Continue... So, what are the requirements? 😕😉😎
- Single Family Office Vehicle (SFOV) 🙎It is typically a corporate vehicle which is wholly owned, directly or indirectly, by one or more individuals from a single family and established solely for the purposes of holding the investments of the family members.
- Single Family Office (SFO) Management Company 🏢It is an entity that provides management services exclusively to its related Single Family Office Vehicle (SFOV), handling tasks such as investment management, administrative services, and other related activities for the benefit of the family members.
The incentives offered are subjected to several conditions. They include:
- Location: Establish and operate a registered office in Pulau 1, Forest City Special Financial Zone.
- Duration: 20 years, covering the initial period of 10 years and additional/subsequent 10 years.
- To qualify for Initial Period (10 years):
- The SFOV must be a new investment holding company incorporated in Malaysia and seek pre-registration with the SC on the eligibility of the tax incentives;
- Management company or SFO2 which is a related company of SFOV to be set up and operate out of Pulau 1, Forest City Special Financial Zone with at least one investment professional with minimum monthly salary of RM10,000.
- Hold AUM of at least RM30 million; meet minimum local investment in eligible and promoted investments of at least 10% of asset under management (AUM) or RM10 million whichever is lower;
- SFOV to spend operating expenditure (OPEX) locally a minimum of RM500,000 annually;
- Employ a minimum of two full-time employees of whom at least one is an investment professional, with minimum monthly salary of RM10,000;
- To qualify for Additional Period (additional 10 years):
- Hold AUM of at least RM50 million; meet minimum local investment in eligible and promoted investments of at least 10% of asset under management (AUM) or RM10 million whichever is higher;
- SFOV to spend OPEX locally (30% higher than Initial Period) a minimum of RM650,000 annually;
- Employ a minimum of four full-time employees.
The SFO or management company may not need to get certain licenses under the Capital Markets and Services Act 2007 (CMSA), such as for fund management, as long as it only provides services for its related corporation, the SFOV.
Eligible SFOVs may apply to the SC for certification for purposes of the tax incentives, subject to the SFOVs demonstrating that it has complied with the relevant conditions.
The SC is currently working with the relevant stakeholders to operationalise the scheme by the first quarter of 2025.
Source: Securities Commission Malaysia
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Single Family Office (SFO) in Malaysia: An Attractive Destination with New Tax Incentives 💞
(Click here to read)
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