Malaysia Targets $110 Million to $270 Million AUM from Single Family Offices by 2030, New Malaysia Family Office Incentive Scheme Allows 0% Tax on Income from Eligible Investments with Registered & Operating Office in Forest City Special Financial Zone (Johor State), Duration of 20 Years (10 Years + 10 Years), Single Family Office Vehicle Must be New Investment Holding Company Incorporated in Malaysia & Seek Pre-Registration for Tax Incentives
8th November 2024 | Hong Kong
Malaysia is targeting $110 million to $270 million AUM from single family offices by 2030 (MYR 500 million to MYR 1.2 billion AUM). In 2024 September, Malaysia announced new Family Office Incentive Scheme – 1) 0% tax on income from eligible investments with registered & operating office in Forest City Special Financial Zone (Johor State), 2) Duration of 20 years (10 Years + 10 Years), 3) Single Family Office Vehicle must be new investment holding company incorporated in Malaysia & seek pre-registration for tax incentives. First 10 Years – Minimum AUM of RM30 million ($7.2 million) with lower of 10% or RM10 million ($2.4 million) invested in Malaysia, 2 full-time employees with at least 1 investment professional with minimum monthly salary of RM10,000 ($2,400) & minimum annual local operating expenses of RM500,000 ($121,000). Next 10 Years – minimum AUM of RM50 million ($12.1 million) with lower of 10% or RM10 million ($2.4 million) invested in Malaysia, 4 full-time employees & minimum annual local operating expenses of RM650,000 ($157,000). Securities Commission Malaysia (23/9/24): “The Securities Commission Malaysia (SC) welcomes the Government’s announcement on the new Family Office incentive scheme, which is aimed at enhancing investment landscape in Malaysia. This comes after the Prime Minister Dato’ Seri Anwar Ibrahim’s announcement last year on policies to encourage establishment of family offices in Malaysia to draw a larger pool of investors that will widen the financing support for SMEs and the new economy. Minister of Finance II, Senator Datuk Seri Amir Hamzah Azizan announced the Single Family Office scheme as part of incentive packages for the Forest City Special Financial Zone on Friday (20 September 2024). The SC has been tasked with coordinating the Single Family Office incentive scheme. The incentive provides for a 0% concessionary tax rate on income generated by eligible investments from the Single Family Office Vehicle (SFOV1). The Forest City will be the first location in Malaysia to offer a 0% tax rate incentive for Family Offices.” More info below:
“ Malaysia Targets $110 Million to $270 Million AUM from Single Family Offices by 2030, New Malaysia Family Office Incentive Scheme Allows 0% Tax on Income from Eligible Investments with Registered & Operating Office in Forest City Special Financial Zone (Johor State), Duration of 20 Years (10 Years + 10 Years), Single Family Office Vehicle Must be New Investment Holding Company Incorporated in Malaysia & Seek Pre-Registration for Tax Incentives “
New Malaysia Family Office Incentive Scheme: 0% Tax on Income from Eligible Investments with Registered & Operating Office in Forest City Special Financial Zone (Johor State), Duration of 20 Years (10 Years + 10 Years), Single Family Office Vehicle Must be New Investment Holding Company Incorporated in Malaysia & Seek Pre-Registration for Tax Incentives, First 10 Years – Minimum AUM of RM30 Million ($7.2 Million) with Lower of 10% or RM10 Million ($2.4 Million) Invested in Malaysia, 2 Full-Time Employees with at Least 1 Investment Professional with Minimum Monthly Salary of RM10,000 ($2,400) & Minimum Annual Local Operating Expenses of RM500,000 ($121,000), Next 10 Years – Minimum AUM of RM50 Million ($12.1 Million) with Lower of 10% or RM10 Million ($2.4 Million) Invested in Malaysia, 4 Full-Time Employees & Minimum Annual Local Operating Expenses of RM650,000 ($157,000)
25th September 2024 – Malaysia new Family Office Incentive Scheme – 1) 0% tax on income from eligible investments with registered & operating office in Forest City Special Financial Zone (Johor State), 2) Duration of 20 years (10 Years + 10 Years), 3) Single Family Office Vehicle must be new investment holding company incorporated in Malaysia & seek pre-registration for tax incentives. First 10 Years – Minimum AUM of RM30 million ($7.2 million) with lower of 10% or RM10 million ($2.4 million) invested in Malaysia, 2 full-time employees with at least 1 investment professional with minimum monthly salary of RM10,000 ($2,400) & minimum annual local operating expenses of RM500,000 ($121,000). Next 10 Years – minimum AUM of RM50 million ($12.1 million) with lower of 10% or RM10 million ($2.4 million) invested in Malaysia, 4 full-time employees & minimum annual local operating expenses of RM650,000 ($157,000). Securities Commission Malaysia (23/9/24): “The Securities Commission Malaysia (SC) welcomes the Government’s announcement on the new Family Office incentive scheme, which is aimed at enhancing investment landscape in Malaysia. This comes after the Prime Minister Dato’ Seri Anwar Ibrahim’s announcement last year on policies to encourage establishment of family offices in Malaysia to draw a larger pool of investors that will widen the financing support for SMEs and the new economy. Minister of Finance II, Senator Datuk Seri Amir Hamzah Azizan announced the Single Family Office scheme as part of incentive packages for the Forest City Special Financial Zone on Friday (20 September 2024). The SC has been tasked with coordinating the Single Family Office incentive scheme. The incentive provides for a 0% concessionary tax rate on income generated by eligible investments from the Single Family Office Vehicle (SFOV1). The Forest City will be the first location in Malaysia to offer a 0% tax rate incentive for Family Offices.” More info below:
The SC Chairman Dato’ Mohammad Faiz Azmi : “This move taps on the rising trend of Family Offices globally, providing comprehensive wealth management solutions, while leveraging on Malaysia’s robust regulatory environment. Establishing the SFO Scheme positions Malaysia to enhance its investor base by attracting regional and Malaysian families to manage their wealth from Malaysia. The projected economic multiplier of this initiative from the local substance requirements is estimated to range from RM3.9 billion to RM10.7 billion, which also includes the positive effects on creation of skilled employment and the demand for other ancillary services.”
The incentives offered are subjected to several conditions. They include:
- Location: Establish and operate a registered office in Pulau 1, Forest City Special Financial Zone.
- Duration: 20 years, covering the initial period of 10 years and additional/subsequent 10 years.
- To qualify for Initial Period (10 years):
- The SFOV must be a new investment holding company incorporated in Malaysia and seek pre-registration with the SC on the eligibility of the tax incentives;
- Management company or SFO2 which is a related company of SFOV to be set up and operate out of Pulau 1, Forest City Special Financial Zone with at least one investment professional with minimum monthly salary of RM10,000.
- Hold AUM of at least RM30 million; meet minimum local investment in eligible and promoted investments of at least 10% of asset under management (AUM) or RM10 million whichever is lower;
- SFOV to spend operating expenditure (OPEX) locally a minimum of RM500,000 annually;
- Employ a minimum of two full-time employees of whom at least one is an investment professional, with minimum monthly salary of RM10,000;
To qualify for Additional Period (additional 10 years):
- Hold AUM of at least RM50 million; meet minimum local investment in eligible and promoted investments of at least 10% of asset under management (AUM) or RM10 million whichever is higher;
- SFOV to spend OPEX locally (30% higher than Initial Period) a minimum of RM650,000 annually;
- Employ a minimum of four full-time employees.
The SFO or management company may not need to get certain licenses under the Capital Markets and Services Act 2007 (CMSA), such as for fund management, as long as it only provides services for its related corporation, the SFOV. Eligible SFOVs may apply to the SC for certification for purposes of the tax incentives, subject to the SFOVs demonstrating that it has complied with the relevant conditions. The SC is currently working with the relevant stakeholders to operationalise the scheme by the first quarter of 2025.
For more information or any queries regarding the Family Office Scheme, please refer to the FAQ available (here) or email [email protected].
Notes:
- A Single Family Office Vehicle (SFOV) is typically a corporate vehicle which is wholly owned, directly or indirectly, by one or more individuals from a single family and established solely for the purposes of holding the investments of the family members.
- A Single Family Office (SFO) Management Company is an entity that provides management services exclusively to its related Single Family Office Vehicle (SFOV), handling tasks such as investment management, administrative services, and other related activities for the benefit of the family members.
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