Asia was home to more than 165,400 ultra-high net worth individuals (UHNWIs) in 2023. By 2028, that number is expected to rise to 230,000, surpassing North America in terms of ultra-wealthy individuals. With a 3 per cent rise in UHNWIs in 2023 and a projected 37.3 per cent growth by 2028, the Asia-Pacific (APAC) region is witnessing a tremendous wealth creation spike, led mainly by the Chinese Mainland, Malaysia, Indonesia and India.  

Considering the growing wealth of APAC countries, the need for wealth management solutions and services, such as family offices, is expected to rise. Family offices now play a more significant role in corporate governance, strategic investments and managing the wealth of HWNIs.  

How do family offices help?

Setting up a family office or hiring a family office manager or administrator is an efficient way for wealthy families to preserve their assets, reduce financial risks, grow and diversify their portfolios, and ensure a seamless transfer of wealth to future generations.  

Family offices provide services that help high-net-worth families achieve their goals and objectives by customising financial planning and investment strategies. One key benefit of family offices is that they help their clients diversify their assets while also assisting with governance and succession planning.  

Why set up a family office in Singapore and Hong Kong

Hong Kong and Singapore are the two leading jurisdictions that play a vital role in family offices in the APAC region. Despite their small geographical size, these two countries are considered global financial centres and hubs for family offices. McKinsey analysis reveals that the two countries together account for around 15 per cent of all single-family offices globally. 

The wealthy from APAC should consider to set up a family office in Hong Kong and Singapore. Here’s why:  

• tax incentives 
• transparent regulations  
• established financial ecosystems 
• vast pool of talent  
• residence pathways for investors  

Koelewijn also stated that both Hong Kong and Singapore have specific corporate structures tailored toward the needs of the private wealth and family office sectors. “Lastly, both have a very wide array of service providers that are specialised in such clients, varying from corporate, legal, audit, tax to administration, which can assist such clients during the lifecycle of their structures,” he added.  

Family office challenges

In Asia-Pacific, many UHNW individuals and business owners have various requirements and challenges that require more thorough and efficient solutions.  

Weak governance

“Many family offices have relatively weak governance structures, lacking formal decision-making processes and clear guidelines for information sharing,” McKinsey senior partners Bernhard Kotanko and Joydeep Sengupta said. Family offices still lacking a professional setup and operational strategy face this challenge.  

On the other hand, Koelewijn explained the ideal governance structures for family offices: “With a focus on Singapore, the variable capital company (or VCC) has proven to be an ideal structure for setting up a private wealth vehicle or a family office operation. A VCC, which is always required to be managed by a licensed manager in Singapore, is a corporate structure that is specifically designed for collective investment schemes and similar structures, with the ability to establish either a stand-alone or an umbrella VCC (which can have multiple sub-funds for specific clients and/or with different strategies).”  

“Moreover, VCCs can benefit from various tax incentives. With a VCC structure, it is also no longer necessary for private wealth and family office operators to have offshore structures, as both the manager and the VCC will be based in Singapore, making this a cost-efficient solution as well (as it avoids the need for service providers in both the offshore and onshore locations),” he continued.  

Read more about VCC here.  

Operational costs

Another challenge is the rising operational costs. A McKinsey analysis indicates that personnel expenditures usually account for around 45 to 65 per cent of operating expenses for a single-family office with $15 million to $500 million in AUM, making them the highest expense category for family offices.  

Hong Kong and Singapore are hotbeds of competition for financial expertise, with top talent frequently gravitating toward investment banks and hedge funds due to higher remuneration than family offices generally offer.  

However, outsourcing family offices and having a trusted partner like Bolder Group can help reduce these costs.  

In conclusion

Due to the expansion of family offices throughout Asia-Pacific, corporations, entrepreneurs and UHNWIs have more reasons to conduct business or manage their wealth in Singapore and Hong Kong. As leading financial centres globally that offer tax-friendly policies and business-friendly regulatory frameworks, it is ideal to set up a family office in these jurisdictions. 

Bolder family office solutions

If you plan to set up a family office in Singapore or Hong Kong to protect your assets and preserve your legacy, seeking advice or working with a qualified private wealth service provider is crucial.  

With our strong presence in Asia, particularly in Singapore and Hong Kong, Bolder Group assists families and managers with setting up family offices in these financial hubs and offering professional advice on governance, compliance, private equity structuring and succession planning.  

Start your family office in Asia today! Contact our Singapore or Hong Kong office to learn more about our private wealth services, tailored to your requirements and your family office’s goals.  

Bolder Group does not provide financial, tax or legal advice and the information contained herein is meant for general information purposes only. We strongly recommend that before acting on any of the information contained herein, readers should consult with their professional advisers. The Bolder Group accepts no liability for any errors or omissions in the information, or the consequences resulting from any action taken by a reader based on the information provided herein.

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