Singapore Family Office 13O vs 13U: Minimum AUM, Investment Professionals and Local Spending

The three schemes in one table

Singapore's fund tax incentives sit in the Income Tax Act and are administered by MAS. Three sections matter in a family office context:

Terms as published at September 2026. MAS revises these periodically; confirm the prevailing requirements with MAS before filing.

13U's local spending is tiered — the most commonly miscalculated condition

13O's local business spending is a flat floor: at least S$200,000 per financial year.

13U is not. It steps with the fund's AUM:

• below S$50 million: at least S$200,000;
• S$50 million to under S$100 million: at least S$500,000;
• S$100 million and above: at least S$1 million.

The recurring error in practice is budgeting against AUM at the date of application and overlooking that growth pushes the requirement into the next tier. A fund that applies at S$90 million and reaches S$110 million two years later moves from S$500,000 to S$1 million in annual local spending — a figure that belongs in the operating budget from the outset.

What counts as local business spending

Local business spending means operating expenditure actually incurred in Singapore. Typical items include remuneration of investment professionals and administrative staff, office rent, management fees paid to Singapore service providers, audit fees, tax and compliance fees, and corporate secretarial costs.

Note that management fees paid to the fund's own manager are subject to specific treatment, and not every payment to an offshore party counts. Confirm each line item against the applicable basis rather than estimating from "money spent in Singapore".

Local investment: 10% or S$10m, whichever is lower

Both 13O and 13U require deployment of 10% of AUM or S$10 million, whichever is lower, into qualifying Singapore-based investments.

"Whichever is lower" favours larger funds: a S$200 million fund faces a S$10 million requirement, not S$20 million. Qualifying local investments include SGX-listed equities, qualifying debt securities, funds managed by Singapore-licensed fund managers, and investments into unlisted Singapore-incorporated companies.

Investment professionals: three details beyond headcount

"Two for 13O, three for 13U" is widely known. What decides outcomes in practice is usually:

1. At least one non-family member — required under both schemes, which normally means hiring locally in Singapore rather than appointing family members alone.
2. A substantive employed role — reasonable remuneration, genuine responsibilities and a Singapore working arrangement. A nominal appointment does not meet the substance requirement, and it also affects how local spending is counted.
3. Timing of the hire drives the timeline — recruitment is frequently the least compressible part of the project, and needs sequencing against the application rather than after it.

Since October 2024: the screening report is a hard prerequisite

From 1 October 2024, every new 13O and 13U application for a fund vehicle managed by a family office must be accompanied by a screening report issued by a MAS-prescribed screening service provider.

The designated providers include EY, KPMG, PwC, BDO Advisory, Avvanz, and Handshakes by DC Frontiers. The screening itself typically takes around two weeks, though assembling the inputs — family member lists, source of wealth narrative, related entity mapping — usually takes longer.

The requirement is part of MAS's tightening of anti-money-laundering scrutiny of family offices. It is additive: it does not replace the existing conditions on AUM, investment professionals, spending and capital deployment.

Choosing between 13O and 13U

Set the thresholds aside and the decision usually turns on three questions:

• How certain is the AUM? Both schemes require the minimum to be maintained for the entire life of the fund, not merely at application. A fund oscillating around S$50 million will carry continuing compliance pressure under 13U.
• How much domicile flexibility is needed? 13O requires a Singapore-incorporated fund; 13U does not, which suits families with an existing offshore structure.
• Does scale carry the cost? 13U's higher spending and headcount requirements need an asset base that can absorb them.

Where the 13O threshold is not yet met, 13D is often used as an interim arrangement — no minimum AUM, no application to MAS, available to a fund incorporated outside Singapore but managed by a Singapore-based fund manager. Note that from YA 2028 (financial year ending 2027), the fund manager must employ at least one investment professional in Singapore.

Where CM1 fits in the application

On 13O/13U projects CM1 GROUP acts as the coordinating and execution party: structuring and feasibility modelling, entity incorporation and corporate secretarial work, establishing the basis for local spending and capital deployment budgets, coordinating investment professional recruitment, engaging the screening provider, coordinating bank account opening, and managing the process with MAS. Approval rests with MAS; tax advice, legal opinions and audit work are issued by licensed local professionals we coordinate.