Choosing a family-office structure: SFO + private company, SFO + VCC, external licensed manager + VCC, direct trust holding and PPLI

Choosing a family-office structure comes down to two questions: which legal person holds the investment assets, and who bears management responsibility for them. This page compares the five structures families most often use in Singapore: an SFO managing a private-company fund, an SFO working with a VCC, an external licensed fund management company managing a VCC, a family trust holding investment accounts directly, and assets held through a PPLI policy. The first three are "fund" structures. The last two are not fund vehicles but an ownership arrangement and an insurance contract, and they are often combined with the first three. This page compares only structures available in Singapore, not other domiciles such as Cayman or Luxembourg; for cross-domicile comparisons see vccfund.si.

The five structures in one table

A to E below refer to: A SFO + private-company fund; B SFO + VCC; C external licensed manager + VCC; D family trust holding investment accounts directly; E assets held through a PPLI policy.

The table is a structural description, not a recommendation. Any structure should be designed by Singapore counsel and tax advisers in light of the family's assets, members' places of residence and objectives.

Legal vehicle and manager: where A, B and C divide

A and B differ in the vehicle. A private company is an ordinary company with no sub-fund segregation, and increases or reductions of capital must follow Companies Act procedures. A VCC issues and redeems shares at net asset value under s 19 of the VCC Act, so its share capital always equals its net asset value, and an umbrella VCC can segregate the assets and liabilities of each sub-fund under s 29. The price is that a VCC must have a statutory manager, must appoint an EFI and, as ACRA explains, cannot use the audit exemptions in ss 205B and 205C of the Companies Act.

B and C differ in the manager. Section 46(1) of the VCC Act requires a VCC to have, at all times, a manager qualifying under s 46(2), and s 46(3) provides that a VCC cannot be its own manager. Section 46(2) lists licensed fund management companies, institutions under s 99(1)(a)–(d) of the SFA and persons prescribed by regulations; it does not expressly name an SFO exempt under paragraph 5(1)(ba). Whether the SFO itself can act as statutory manager in structure B therefore requires legal advice or confirmation from MAS; see manager arrangements.

In structure C, a licensed fund management company is the statutory manager. Note MAS's position in para 3.4 of SFA 04-G05: a company that, in form and substance, manages only its own assets does not need a licence, and MAS will not grant a licence to enable it to obtain tax incentives or to use fund structures that require a licensed manager. In other words, a family cannot "obtain a licence for its own family office" simply to satisfy the manager requirement.

Tax schemes: which structure falls on which track

Para 2.5 of MAS Circular FDD Cir 05/2026 provides that 13O applies to companies incorporated and tax resident in Singapore and 13U to approved fund vehicles; para 2.6 states that all fund tax incentive schemes are open to both SFO funds and non-SFO funds. The dividing line between the tracks is the manager:

• SFO fund: a fund whose assets come mainly from a single family and which is managed by an SFO exempt under paragraph 5(1)(ba). For awards granted on or after 1 August 2026, a 13O fund needs at least S$20 million of AUM in DI and 2 qualifying investment professionals (at least 1 of them not a family member); a 13U fund needs S$50 million and 3 professionals. There are also local business spending, capital deployment and private bank account conditions.
• Non-SFO fund: usually managed by a licensed fund management company, and must have capital from third-party investors or a bona fide intention to raise capital from third parties (para 3.1); if this cannot be shown, MAS reserves the right to revoke the award. A third-party investor is an investor not related to the fund management company.

Structure A is managed by the SFO and falls on the SFO-fund track. For structure B, the answer depends on how duties are divided between the statutory manager and the SFO: the definition of an SFO fund uses "managed by an SFO", while the conditions say "managed or advised directly by the SFO", and the gap between the two wordings should be confirmed in writing with MAS before applying. For structure C with only family money, the primary text gives no answer for a family setting on whether the non-SFO third-party investor condition can be met, and it should not be inferred. D and E are not fund vehicles in themselves; where a tax incentive is sought, it is usually a fund vehicle outside the trust or policy that applies. The conditions are set out item by item in the two 13O / 13U tracks.

Privacy, segregation and flexibility of entry and exit

Privacy: ACRA states that "unlike companies, VCCs do not need to share their member lists with the public". However, s 82 of the VCC Act allows the manager, the custodian (for an umbrella VCC, a sub-fund's custodian, limited to that sub-fund's members), a public agency for law enforcement purposes and a holder of a court order to request the register, and a member may inspect only the part relating to that member. Trusts and policies are likewise not publicly registered with ACRA, but trustees, insurers and banks all carry out customer due diligence. No structure can be used to avoid CRS or source-of-wealth checks.

Segregation: B and C can set up sub-funds under one umbrella VCC by member, generation or strategy; under A, segregation is only possible through several companies, each meeting the conditions on its own. D can separate beneficial arrangements through different trusts or sub-trusts, and E can separate by policy. Note that sub-fund segregation operates only between sub-funds; the VCC shares themselves remain assets of the shareholders.

Entry and exit: a VCC issues and redeems shares at net asset value, so members joining or leaving, or increasing or reducing their investment, is smoother than a private company's capital reduction procedure, but it depends on regular valuation and fund administration. Contributions to and distributions from a trust are governed by the trust deed; partial surrenders and policy loans follow the contract terms and may incur charges.

Ongoing obligations and cost categories

A, B and C all face the ACRA, MAS and IRAS lines; the difference is that a VCC adds a layer: a statutory manager, EFI due diligence and a register of beneficial owners (MAS Notice VCC-N01), and audited financial statements with separate accounts for each sub-fund. IRAS treats a VCC, umbrella or not, as a single entity for income tax that needs to submit only one set of forms, but the tax rules apply at sub-fund level and the losses of a loss-making sub-fund cannot be set off against a profitable sub-fund (IRAS, paras 2.1, 5.11–5.12 and 5.40). Stamp duty is charged by sub-fund.

In structure D, tax is filed by the trustee; the trustee's statutory income is generally taxed at 17%, and resident beneficiaries are taxed at personal income tax rates (IRAS, 2 February 2026). A private trust company can be exempt from licensing but must appoint a licensed trust company to ensure anti-money laundering compliance. Fees, underwriting and the place of issue vary widely for structure E; this site does not cover them, see the comparison page on ppli.com.sg.

On costs, this site cites only official fees (VCC incorporation S$8,000, each sub-fund S$400, annual return S$1,600; ACRA, 29 January 2026); service fees depend on quotations. The full annual timeline is in the annual compliance checklist.

Combining structures and the questions to answer before choosing

The five structures are not mutually exclusive. Common combinations include: a family trust holding VCC shares (ownership in the trust, pooled management in the VCC); a VCC alongside PPLI, with the policy taking on protection and part of the assets and the remaining investment assets in the VCC; and a trust holding both a PPLI policy and VCC shares. A policy held by a trust, company or VCC cannot use a nomination of beneficiaries under the Insurance Act, because LIA states that a nomination must be made by a policyholder aged 18 or above who is also the life assured. How the layers fit together is covered in trust and PPLI layering.

Before choosing, a family may wish to answer the following questions in writing and then ask its lawyers and tax advisers to compare options:

1. How much of the investable assets are "designated investments", and how much is shares in operating businesses?
2. Does the family need segregation by member, generation or strategy?
3. Does the family have, or plan to build, an SFO team with qualifying investment professionals?
4. Are there investors outside the family, or a genuine plan to raise external capital?
5. Is there an existing trust or policy, and can its holding chain be adjusted?
6. In which jurisdictions are family members tax resident (Singapore, Hong Kong, mainland China or elsewhere)?

Typical approaches for different answers are set out in five typical scenarios. For a reading against your family's circumstances, register your needs through this site's contact details.