13O & 13U Tax Incentives for Family Offices
Compare eligibility, staffing, local expenditure and application requirements for a family-office fund.
Four routes for family capital
Start with the investment and governance requirements, then assess tax treatment. Using a VCC does not require a family to establish an SFO.
Sub-fund on an existing umbrella
Use established fund management, administration and governance without building a full office solely for the investment vehicle. Assess the mandate, liquidity, fees and tax treatment under the platform’s terms.
Read the guide →Family-sponsored VCC
For families needing dedicated governance, tailored mandates or several sub-funds. Appoint a permissible fund manager and service providers; the family sponsor does not self-manage under an SFO exemption.
Read the guide →Dedicated single family office
For families needing an in-house investment team and broader family governance. Plan the office, fund vehicle, licensing and tax incentive separately, including the staffing and ongoing operating costs.
Read the guide →Singapore company with 13O approval
A qualifying Singapore-incorporated and tax-resident company can be used instead of a VCC. It has no VCC sub-fund framework. Management activity still needs the appropriate licence or exemption, and the fund must separately meet its tax-award conditions.
Read the guide →Tax relief does not automatically attach to a sub-fund. An eligible commercial fund’s management and substance arrangements may avoid the need for a family to establish its own team, but the applicable tax track, award conditions and fees must be confirmed. There is no automatic exemption.
The fund’s tax application is separate from its choice of legal vehicle and VCC manager. The SFO Section 13O threshold is S$20 million in designated investments; S$5 million is the commercial non-SFO entry threshold, not a reduced SFO threshold. Appointing a licensed manager alone does not establish the commercial track: the fund must satisfy the applicable conditions, including the third-party-capital requirement where relevant. For a VCC, assess 13O or 13U; 13OA concerns Singapore limited partnerships. Confirm the award conditions with MAS before relying on relief.
Update — August 2026: MAS Circular FDD Cir 05/2026 (31 July 2026) now formally separates the commercial (non-SFO) and family-office (SFO) condition sets under sections 13O, 13OA and 13U — different minimums (S$5M vs S$20M at 13O), different spending tiers, and a capital deployment requirement that applies to SFO funds only. Our full two-track breakdown.
Should a family office apply for 13O or 13U?
Most single family offices start with 13O . It is the lower-threshold scheme and fits a family that has consolidated S$20M+ of designated investments and can staff two investment professionals. A family office crosses to 13U when AUM passes S$50M and it can field a third investment professional — and many do so deliberately because institutional counterparties, banks and co-investors tend to regard the enhanced tier more favourably. There is no benefit to over-reaching: applying for 13U before you can sustain its headcount and spending simply raises cost and compliance risk.
13O vs 13U for family offices — at a glance
| Feature | Section 13O | Section 13U (Enhanced Tier) |
|---|---|---|
| Best for | Most single family offices | Larger SFOs, MFOs, institutional investor base |
| Minimum AUM | S$20M designated investments (end of each FY) | S$50M at application and each FY |
| Investment professionals | ≥2 (≥1 non-family) | ≥3 (≥1 non-family) |
| Local business spending | SFO track: below S$250M — S$200k; S$250M to below S$2B — S$500k; S$2B and above — S$1M. Permitted donation or blended-finance contributions may meet part of the higher tiers, subject to minimum local-business-spending floors. | |
| AUM test timing | End of each FY | At application and each FY |
| MAS application | Required | Required |
| Investor perception | Standard | Often preferred by institutions |
How many investment professionals must a family office employ?
13O requires at least two investment professionals and 13U at least three. In both schemes at least one must be a non-family member, and all must be Singapore tax-resident and paid above the MAS salary floor. This headcount rule is the biggest single driver of a family office's cost — it is what pushes the annual run-rate into the S$300k–1.5M range covered on the cost page. The broader substance obligations are on the requirements page.
What local business spending is required?
Local business spending is tiered by AUM: at least S$200,000 a year below S$250M, S$300,000 between S$250M and S$2B, and S$500,000 above S$2B. Qualifying spend includes Singapore-based fund administration, audit, tax, legal and management fees — much of which a family office incurs anyway, so the tier is usually met by genuine operating cost rather than artificial spend.
What changed for family offices in 2025?
Separate the fund’s tax track from its legal vehicle and manager. The SFO 13O threshold is S$20 million in designated investments; S$5 million is the commercial non-SFO entry threshold. Section 13U has a S$50 million threshold. Staffing, expenditure, investment and transition conditions depend on the applicable track and award. A family using a VCC must appoint a permissible fund manager, and that appointment alone does not establish commercial-track eligibility.
How does a family office apply?
The fund’s tax application is separate from its choice of legal vehicle and VCC manager. The SFO Section 13O threshold is S$20 million in designated investments; S$5 million is the commercial non-SFO entry threshold, not a reduced SFO threshold. Appointing a licensed manager alone does not establish the commercial track: the fund must satisfy the applicable conditions, including the third-party-capital requirement where relevant. For a VCC, assess 13O or 13U; 13OA concerns Singapore limited partnerships. Confirm the award conditions with MAS before relying on relief.
Discuss a fund structure for your family
Use our structure, cost and tax guides to prepare your requirements. VCC Singapore can then introduce you to a fund manager or administrator to assess a dedicated VCC or an existing umbrella sub-fund.
Request an introduction →Frequently asked questions
Should a family office apply for 13O or 13U?
Most single family offices start with 13O (S$20M AUM, two investment professionals). A family office crossing S$50M with a third investment professional can apply for 13U, which institutional counterparties tend to prefer.
How many investment professionals must a family office employ?
13O requires at least two and 13U at least three, with at least one non-family member in each case. All must be Singapore tax-resident and paid above the MAS salary threshold — the biggest driver of running cost.
What local business spending must a family office incur?
Tiered by AUM: at least S$200,000 a year below S$250M, S$300,000 from S$250M to S$2B, and S$500,000 above S$2B. Qualifying spend includes Singapore-based fund admin, audit, tax, legal and management fees.
Did the family office tax incentive rules change in 2025?
Separate the fund’s tax track from its legal vehicle and manager. The SFO 13O threshold is S$20 million in designated investments; S$5 million is the commercial non-SFO entry threshold. Section 13U has a S$50 million threshold. Staffing, expenditure, investment and transition conditions depend on the applicable track and award. A family using a VCC must appoint a permissible fund manager, and that appointment alone does not establish commercial-track eligibility.
VCC Singapore is an independent informational resource and is not a regulator, law firm or tax adviser. Tax thresholds and conditions are set by MAS and IRAS and change periodically — confirm the current figures before acting. This page is general information, not legal, tax or financial advice.