A total of six single family office (SFO) funds in Singapore given tax benefits were found to be linked to the 10 foreigners arrested and convicted in the nation’s largest money laundering case.

This comes after the country’s financial regulator said in December 2023 it had tightened the tax incentive process to include casting a wider net when conducting due diligence and appointing a panel to screen applicants for money laundering risks.

On July 2, Nominated Member of Parliament Usha Chandradas asked the Prime Minister and Minister of Finance how many family offices linked to the 10 convicted foreigners were granted tax benefits.

Responding in a written reply on behalf of Prime Minister Lawrence Wong, Deputy Prime Minister Gan Kim Yong said there were six SFOs, including those owned by the 10 convicted or their spouses.

Family offices are organisations set up to manage the wealth of a single family or multiple families.

In Singapore, SFOs are not required to be registered or licensed by the Monetary Authority of Singapore as they do not manage third-party funds.

DPM Gan said the tax benefits granted by MAS were withdrawn at the start of the financial year the SFO’s owners or spouses were charged or convicted.

The Straits Times understands this could have been as early as the 2022 financial year.

Said DPM Gan: “Tax benefits accorded prior to that will not be clawed back, unless there were breaches of the conditions of the tax incentive awards then.

“In addition, as part of enforcement actions in this case, assets have been forfeited from the convicted individuals. The total value of assets forfeited from convicted individuals with links to SFO funds that were awarded tax incentives far exceeds any tax benefits accorded to the SFO funds.”

Since their arrests in August 2023, more than $1 billion in cash and assets linked to the 10 foreigners were seized and issued with prohibition of disposal orders.

About $944 million worth of those assets and cash were forfeited to the State.

The remainder of the $3 billion in cash and assets still seized by the authorities belong to 17 others on the run, and are part of ongoing investigations.

In October 2023, Minister of State for Trade and Industry Alvin Tan had said in Parliament that MAS would review its internal incentive administration processes for SFOs, after at least one of the convicted was found to be linked to an SFO that had been awarded tax incentives.

To receive tax incentives at the time, SFOs had to employ at least two investment professionals, incur business expenditure of between $200,000 and $1 million, and invest at least 10 per cent of their assets under management in local equities, bonds, funds, or Singapore-operating firms.

In a written reply in Parliament on March 6, Prime Minister Lawrence Wong said there were around 1,400 SFOs that were awarded tax incentives in Singapore. This is up from the 1,100 SFOs in 2022, and 700 in 2021.

Meanwhile, SFOs that apply for and are granted tax incentives by MAS managed about $90 billion of assets in 2021.