[August 2026 Update] The Optimal Approach to Wealth Management in Singapore

How Should SFOs, MFOs, and VCCs Be Used?

Executive Summary

In 2026, Singapore's SFO framework reached another turning point. A licensing exemption framework for SFOs was introduced in June, followed in August by revisions to the requirements for SFOs under 13O, 13OA, and 13U. AUM testing, staffing, and other requirements were made more practical.

At the same time, the policy emphasis on Substance remains unchanged. Singapore continues to require substantive ties to its economy through measures such as a non-family Investment Professional, Local Business Spending (LBS), and the Capital Deployment Requirement (CDR).

SFOs, MFOs, and VCCs are not competing frameworks; they serve different roles. SFOs and MFOs determine who manages the assets, a VCC is the vehicle that holds the assets, and 13O and 13U are tax incentive schemes applicable to funds that meet specified requirements.

The critical issue in wealth management in 2026 is governance design rather than the selection of a framework. In addition to asset size, the family must consider residence, its Japanese business interests, investment targets, and succession policy when deciding which functions to maintain in-house and which external infrastructure, such as an MFO, to use.

Singapore's strength lies not in its tax framework alone but in its wealth management ecosystem. Even as frameworks change, the ability to build finance, legal, tax, succession, and governance functions as an integrated whole remains the essential competitive advantage that attracts business-owning families from around the world.

Singapore has become one of Asia's leading wealth management hubs for business-owning families and high-net-worth individuals worldwide.

According to the Singapore Economic Development Board (EDB), more than 2,000 Single Family Offices (SFOs) have been established in Singapore. The number of SFOs benefiting from tax incentives also rose rapidly, from approximately 400 at the end of 2020 to more than 2,000 at the end of 2024.

What is noteworthy is that this growth has not resulted from deregulation alone.

In recent years, Singapore has instead required family offices to maintain a certain level of Substance in the country through Investment Professionals, Local Business Spending (LBS), the Capital Deployment Requirement (CDR), and other measures.

In 2026, the frameworks surrounding SFOs changed significantly once again.

A new class exemption framework for SFO licensing took effect on June 15, 2026. On July 31, the Monetary Authority of Singapore (MAS) also issued a Circular on fund tax incentive schemes. The economic requirements applicable to funds managed by SFOs were revised, with the new conditions taking effect on August 1.

Accordingly, family office planning in Singapore in 2026 has clearly moved beyond the stage of simply saying:

"We should establish an SFO,"

or

"We should obtain 13O or 13U status."

It has entered the next phase.

The key is to design how the following should be used separately or in combination, based on the family's asset size, businesses, residence, investment policy, and succession plan:

SFO (Single Family Office)

MFO (Multi-Family Office)

VCC (Variable Capital Company).

This is fundamentally a question of design.

Drawing on the reforms in effect as of August 2026, this article organizes the practical points that Japanese business-owning families and asset owners should understand.