Malaysia – The Single-Family Office Scheme In Malaysia: A New Wealth Management Opportunity.
A single-family office (“SFO”) represents a corporate vehicle wholly owned or controlled by members of a single wealthy family, created to exclusively manage their assets, investments and long-term interests. The SFO may also extend to multiple generations and branches of that family.
To support this, Malaysia has introduced the Single-Family Office Scheme, offering a structured and tax-efficient environment for wealth management through Single Family Office Vehicles (“SFOVs”). This initiative aims to position Malaysia as a preferred destination for high-net-worth families looking to manage and grow their wealth efficiently.
Key Features of the Single-Family Office Scheme[1]
Strategic Focus: Forest City Special Financial Zone[2]
The SFO Scheme is part of Malaysia’s broader efforts to strengthen its financial services sector. A notable aspect of this scheme is its connection to the Forest City Special Financial Zone (“FCSFZ”) which was introduced by Prime Minister Anwar Ibrahim on 25 August 2023. Forest City is a major component of the larger Forest City development project, a futuristic smart city located in Johor, Malaysia, near the Singapore border. This ambitious project integrates cutting-edge technology, green spaces, and sustainable infrastructure and the financial zone within Forest City designed to establish itself as a global financial and business hub, attracting multinational corporations, financial institutions, and high-tech companies.
Eligibility Requirements for SFOVs[3]
Regulatory Framework[4]
The SC is responsible for overseeing the scheme and issuing certifications to eligible SFOVs. Notably, the management company or SFO may not need to get certain licenses under the Capital Markets and Services Act 2007, such as for fund management, as long as the management company or SFO only provides services for its related corporation (i.e., FundCo).
Conclusion
The introduction of the Single-Family Office Scheme in Malaysia presents an attractive proposition for high-net-worth families seeking a tax-efficient and well-regulated environment for wealth management. By leveraging the incentives offered, investors can benefit from Malaysia’s strategic location, growing financial ecosystem, and robust regulatory framework.
This scheme is set to play a pivotal role in strengthening Malaysia’s position as a premier wealth management hub in the region.
* Please note that the SFO Scheme is still developing and the SC has indicated that the detailed conditions for the SFO Scheme will be made available by the first quarter of 2025. Although the procedure to apply for the SFO Scheme has not yet been announced, interested applicants are welcomed to consult the SC to confirm their eligibility for the incentive.
- Securities Commission Malaysia, FAQ Single Family Office Scheme: https://www.sc.com.my/development/single-family-office/faq.
- ASEAN Briefing, Malaysia Issues Incentives for Forest City Financial Zone: https://www.aseanbriefing.com/news/incentives-for-malaysia-forest-city-financial-zone/.
- Baker McKenzie, Malaysia: Forest City Special Financial Zone – New family office incentive scheme: https://insightplus.bakermckenzie.com/bm/tax/malaysia-forest-city-special-financial-zone-new-family-office-incentive-scheme.
- Ibid.
A single-family office (“SFO”) represents a corporate vehicle wholly owned or controlled by members of a single wealthy family, created to exclusively manage their assets, investments and long-term interests. The SFO may also extend to multiple generations and branches of that family.
To support this, Malaysia has introduced the Single-Family Office Scheme, offering a structured and tax-efficient environment for wealth management through Single Family Office Vehicles (“SFOVs”). This initiative aims to position Malaysia as a preferred destination for high-net-worth families looking to manage and grow their wealth efficiently.
Key Features of the Single-Family Office Scheme[1]
Strategic Focus: Forest City Special Financial Zone[2]
The SFO Scheme is part of Malaysia’s broader efforts to strengthen its financial services sector. A notable aspect of this scheme is its connection to the Forest City Special Financial Zone (“FCSFZ”) which was introduced by Prime Minister Anwar Ibrahim on 25 August 2023. Forest City is a major component of the larger Forest City development project, a futuristic smart city located in Johor, Malaysia, near the Singapore border. This ambitious project integrates cutting-edge technology, green spaces, and sustainable infrastructure and the financial zone within Forest City designed to establish itself as a global financial and business hub, attracting multinational corporations, financial institutions, and high-tech companies.
Eligibility Requirements for SFOVs[3]
Regulatory Framework[4]
The SC is responsible for overseeing the scheme and issuing certifications to eligible SFOVs. Notably, the management company or SFO may not need to get certain licenses under the Capital Markets and Services Act 2007, such as for fund management, as long as the management company or SFO only provides services for its related corporation (i.e., FundCo).
Conclusion
The introduction of the Single-Family Office Scheme in Malaysia presents an attractive proposition for high-net-worth families seeking a tax-efficient and well-regulated environment for wealth management. By leveraging the incentives offered, investors can benefit from Malaysia’s strategic location, growing financial ecosystem, and robust regulatory framework.
This scheme is set to play a pivotal role in strengthening Malaysia’s position as a premier wealth management hub in the region.
* Please note that the SFO Scheme is still developing and the SC has indicated that the detailed conditions for the SFO Scheme will be made available by the first quarter of 2025. Although the procedure to apply for the SFO Scheme has not yet been announced, interested applicants are welcomed to consult the SC to confirm their eligibility for the incentive.
For further information, please contact:
Dato’ Azmi Mohd Ali, Partner, Azmi & Associates
azmi@azmilaw.com
- Securities Commission Malaysia, FAQ Single Family Office Scheme: https://www.sc.com.my/development/single-family-office/faq.
- ASEAN Briefing, Malaysia Issues Incentives for Forest City Financial Zone: https://www.aseanbriefing.com/news/incentives-for-malaysia-forest-city-financial-zone/.
- Baker McKenzie, Malaysia: Forest City Special Financial Zone – New family office incentive scheme: https://insightplus.bakermckenzie.com/bm/tax/malaysia-forest-city-special-financial-zone-new-family-office-incentive-scheme.
- Ibid.
