Smaller family offices may face challenges from proposed GIP tweaks

WEALTHY individuals who want to set up a family office (FO) in Singapore through the Global Investor Programme (GIP) may face more challenges, given that the scheme may be tweaked in a bid to revitalise the local stock market.

Market observers said that families may have difficulty in diversifying their portfolios in the Republic’s small market, even as they expect the proposed moves to be, overall, a step in the right direction.

The Monetary Authority of Singapore (MAS) recently announced adjustments to the GIP, which grants permanent residency to eligible foreign investors, among other moves to boost the Singapore equities market.

New applicants under the “family office” option of the GIP must now allocate at least S$50 million of their assets under management (AUM) to equities – excluding real estate investment trusts (Reits) and business trusts – listed on Singapore-approved exchanges.

Previously, this capital could be spread across equities, Reits, private equity in Singapore-based businesses, and other asset classes.