THE Monetary Authority of Singapore (MAS) will broaden the scope of due diligence checks to a wider group of individuals and entities associated with the single family offices which are applying for MAS tax incentives.
It will also appoint a panel of “specialised firms” to screen these individuals and entities for money laundering and terrorism financing risks, a spokesperson from the central bank said on Tuesday (Dec 19).
Depending on the screening results, tax incentive applicants may be required to provide additional document validation, such as a statutory declaration or a certificate of non-criminality from the country where the adverse news was reported in, if applicable.
This comes after police arrested a group of individuals believed to be involved in a S$2.8 billion money laundering ring. At least one of them is believed to be connected to a single family office which may have received tax incentives from MAS.
The regulator said more details on the new measures will be provided next year.
“MAS is refining the terms and conditions of the tax incentive scheme to guard against illicit actors,” it said in a statement.
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This includes swiftly suspending or withdrawing tax incentives where individuals or entities are found to be under investigation for money laundering and terrorism financing offences. These measures will apply regardless of where the investigations are conducted – whether in Singapore or elsewhere.
Singapore has been viewed as an attractive investment haven in recent years. In 2022, the city-state attracted a record high S$22.5 billion in fixed asset investment commitments, up from the S$11.8 billion it drew in 2021, and the S$17.2 billion investors parked here in 2020.
The number of family offices has been on the rise too. As at end-2022, 1,100 of these single family offices obtained tax incentives from MAS, up from the 700 in 2021.
In July this year, the central bank introduced measures which broadened the tax perks that can be enjoyed by single family offices, in a bid to encourage investments into the country.
These include recognising all investments in non-listed Singapore operating companies and twice the amount invested in Singapore-listed equities, exchange-traded funds and unlisted funds which invest primarily in Singapore-listed equities, for the purpose of meeting their investment requirements.
At the same time, it also launched a public consultation on new proposals to ensure that all single family offices come under anti-money laundering controls. This will be done by introducing specific requirements through a class exemption for the sector.
MAS said at the time that the measures will beef up surveillance and defence against money laundering risks in Singapore’s single family office sector.
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