Introduction

In our June 2020 immigration newsletter, we touched on the newly introduced next generation business owner qualifying criteria (the updates to the GIP qualifying criteria took effect from 1 March 2020), as part of our newsletter series on the latest changes to the Global Investor Programme (“GIP”).
Whilst the latest update to the GIP scheme brings with it heightened requirements, it also allows more
categories/class of investors to be eligible for fast-track permanent residency in Singapore. For this reason, the GIP remains a very popular choice amongst the ultra-high net-worth foreign individuals who wish to get residency status in Singapore.

In the spotlight for this month’s immigration newsletter is the fresh introduction of the “Family Office
Principals” qualifying criteria. Mr Matthew Lee, director of Contact Singapore (a division of the Economic Development Board (“EDB”) which oversees the GIP), who was quoted in The Straits Times (article dated 29 January 2020) said that the updates to the scheme were made to better reflect rapid shifts in the global economy over the past few years which have resulted in new business opportunities and new breeds of entrepreneurs and business owners.

He also added that the expansion of the GIP scheme to include the “Family Office Principals” was meant to attract business owners who want to start a single-family office in Singapore, which will “strengthen our banking and finance sector”.

Why the Family Office Principals?

For the professionals in Singapore’s private wealth sector, it is no secret that the latest buzzword is “Family Office” when it comes to a high net worth individual’s needs for, amongst other things, succession planning, wealth transfer and immigration. According to the Monetary Authority of Singapore (“MAS”), Singapore has established itself as one of the leading private banking and wealth management centres globally and in Asia. Indeed, the high net worth individuals choose Singapore for our sound financial regulation, strong rule of law, as well as political and economic stability. On the back of all these, Singapore has established a strong eco-system to support wealth planning and structuring, including single family office structures. Singapore also has a ready pool of talent such as our private bankers, legal and finance professionals like tax advisers.

According to Ms Thong of the MAS, who was quoted by The Business Times in an article dated 31 August 2019, the MAS is currently working with the EDB to build a strong network of family offices in Singapore to allow “family offices to provide mutual support in each other’s operations as well as to partake in co-investment opportunities”. The amendment to the GIP and introduction of this new qualifying criterion is therefore a part of Singapore’s plan to boost and leverage on the world-class family office eco-system that we currently have, with the added advantage of fast track permanent residency.

Qualifying Criteria For Family Office Principals

In order to qualify for this scheme, the applicant/investor must possess at least five (5) years of entrepreneurial, investment or management track record, as well as net investible assets of at least S$200 million. An applicant under this qualifying criterion is restricted to the Family Office Option (i.e. Option C), wherein the applicant would need to invest S$2.5 million in a new or existing Singapore based single-family office having assets under- management of at least S$200 million.

What Does This Mean For Family/Wealth Advisors

According to the MAS, Singapore has seen 5x increase in the number of family offices between 2017 – 2019. In this connection, the MAS Assistant Managing Director Mr. Ng Yao Loong at the Euromoney Asia Private Banking Seminar, 13 September 2018, said that “Wealth management of the future will be one of stewardship and purposeful deployment of assets… We will continue to work with our industry partners to facilitate future-planning for the future generation.” This necessarily means that private bankers are well-placed to play the critical role of family/wealth advisors to the increasing number of families that are consolidating their wealth in Singapore through the single-family office structure. To further hone in on this point, the Institute of Banking and Finance Singapore (IBF) and the MAS launched on 27 July 2020, the Family Office Advisors Skills Map, for family office advisors to deepen specialist skillsets in order to better serve Singapore’s growing family office ecosystem. It is intended that this will expand the career pathway and expertise for private bankers when it comes to, amongst other things, the single-family office structure.
This is also consistent with the trend observed by our experienced immigration and family office scheme lawyers at Sim Mong Teck & Partners (“SMTP”), who have been serving as the legal advisors to many Asian families, many of whom are keenly aware of the availability of the single-family office platform for its wealth and succession planning advantages/functions. Again, the crux of a successful pitch is two-pronged: (i) the availability of fast track permanent residency in Singapore through the GIP programme; and (ii) access to an efficient wealth and succession planning platform. Specifically, the option of permanent residency acts as a critical cog to family and business succession, as it sets the pathway for next generation business continuity, wealth preservation and succession planning in Singapore.

Forging A Close Relationship – Family Office Principal

In our previous June 2020 newsletter, we mentioned that private bankers may forge long lasting relationships with their elderly clients, but may find difficulty bonding with the next generation business owners. Similarly, the GIP Family Office Principals qualifying criterion may also be similarly leveraged upon to unlock a strong relationship with both the first and second generation of such Asian wealthy families.

SMTP – GIP Family Office Track Record

At SMTP, our immigration and family office department headed by our Managing Partner, Mr Sim Mong Teck, have more than a decade’s worth of experience handling GIP applications for high networth families from North Asia and South East Asia.

Accordingly, our extensive experi-ence puts us in a better position to understand our clients’ needs and requirements.

In recent years, we have seen an influx of applications from North Asian and South East Asian high networth families. In this regard, we are happy to share that amongst our recent success include the approval of two (2) separate GIP Family Office applications, which took seven (7) months from the time of the application to the time we received the in-principle approvals.

Contrary to popular belief, applying via the GIP is not a simple form-filling exercise. We hold our client’s hand from the very beginning to the end of their GIP journey and beyond.

Our comprehensive scope of work includes:- (i) qualifying the client’s background to assess if he/she even meets the GIP requirements and to provide alternative suggestions if he/she can’t meet the GIP requirements; (ii) understanding the client’s needs behind his/her GIP aspirations; (iii) arranging a preliminary assess-ment of the client’s application with the EDB; (iv) discussing and drafting the five (5) year business plan with a view of meeting the requisite Singa-pore permanent residency renewal requirements tied to the GIP; (v) preparing the client for the formal interview with the EDB, including the use of role-play as a means to build up the client’s experience and self-confidence, based on our extensive experience with past GIP clients that we have advised over the years; (vi) preparation and submission of the GIP application form; (vii) advising and handling the entire permanent residency application process with the Immigration and Checkpoints Authority of Singapore; and (viii) discussing and strategizing the client’s long-term plans post GIP approval, including the renewal of Singapore permanent residency and possible Singapore citizenship applica-tion.

As is apparent, the bulwark of our success lies in our wealth of experi-ence handling numerous GIP cases over the years.

Typical Motivations of Family Office Principals

Based on our observation, these Asian families with keen interest to apply under the GIP Family Office Principals qualifying criterion share very consistent motivations. These include: –
• Family wealth preservation;
• Ensuring inter-generational wealth transfer;
• Consolidation of assets;
• Greater control over investments; and
• Efficiency of wealth management.

Conclusion

Insofar as GIP is concerned, the newly introduced Family Office Principals qualifying criteria provides yet another potential option for such individuals to obtain residency in Singapore, and to take advantage of all the obvious benefits that Singapore has to offer.
As is apparent above, Singapore is in an excellent position when it comes to the family office eco-system, and it is also expected to improve tremendously in the coming years.
This represents a very attractive value proposition and potentially effective means/tool for private bankers and advisors serving such Asian families.

Lastly, even though the requirements of the GIP may seem daunting at first, rest assured that at Sim Mong Teck & Partners, our experienced immigration and family office scheme lawyers will be on-hand to guide you and your client at every step of the journey.