“””Singapore Tightens Regulations for Family Offices and Hedge Funds Amid Rising Foreign Wealth”” “

SINGAPORE – Singapore is intensifying oversight on family offices and hedge funds, with new regulations aimed at tightening monitoring processes as foreign wealth flows into the city-state. Prompted by recent financial scandals, Singaporean authorities are implementing measures to ensure transparency and reduce risk in the financial system, The Edge Malaysia reports.

Since March, family offices benefiting from tax exemptions have received updated forms requiring more comprehensive data, with the first submissions due by the end of June. These updates include declarations on the backgrounds of beneficial owners, directors, and shareholders to confirm they have no prior involvement in money laundering or terrorism-related offenses. In addition, the Monetary Authority of Singapore (MAS) has mandated stricter reporting requirements for hedge funds, ending a lighter licensing regime by August 1, 2024, which previously applied to funds managing assets under US$250 million.

The new regulations address weaknesses exposed by recent criminal cases involving high-value money laundering. Family offices linked to those facing charges will no longer qualify for tax incentives, MAS has announced. This approach is complemented by an expanded due diligence framework, including new background checks and the formation of a review panel for evaluating applications.

Singapore’s Accounting and Corporate Regulatory Authority (ACRA) is also playing a part, actively closing inactive companies to prevent misuse for illicit purposes. Sources indicate that ACRA has intensified these efforts, removing 17,000 inactive companies from the registry in recent years. These steps are expected to raise operational costs for smaller firms, yet industry experts believe they will strengthen the city-state’s data quality and regulatory framework.

The combined actions by MAS and ACRA represent Singapore’s ongoing commitment to maintaining robust financial integrity as it manages increasing foreign investments.