Singapore is one of the perfect locations that business investors can count on when it comes to setting up an offshore company. Now, among the varied different offshore structures, a trust company is widely preferred by the majority of the business investors and owners. So, if you are looking forward to investing in Singapore offshore business, then a trusted company is where you can proceed ahead with.
A Singapore trust company primarily provides trust formation and asset management services to a wide range of clients. Such entities fall under the ambit of the Trust Companies Act. The Monetary Authority of Singapore (MAS) regulates trust companies and their registration affairs. Trust formation requires submitting an application to the Monetary Authority of Singapore (MAS) through the proposed trustee-manager or a certified agent.
What is a Singapore Trust Company?
As per the Trust Companies Act 2005 (TCA), a Singapore trust company is one that:
Renders services relating to trust formation;
Acts as a trustee for an express trust (a trust deliberately and intentionally created by the settlor);
Arranges a person to act as a trustee;
Facilitates trust management services concerning the express trust.
The entity must maintain a minimum asset value of $250,000 to qualify for Singapore trust company registration.
Benefits of Starting a Trust Company in Singapore
Singapore fosters immense growth potential for trust companies. Here’s why:
Thriving Fund Management Market
Trust in Singapore has become a go-to vehicle for most HNIs and investors. This has fueled the growth of family offices within the region. In 2024, the country witnessed the incorporation of over 2,000 single-family offices (SFOs), a 43% YoY increase. Additionally, Singapore has become a home to 242,400 millionaires and 47 billionaires, which has fueled the demand for private trust companies.
Significant Tax Incentives
Section 13O and 13U tax incentive schemes have further enhanced the appeal of trusts among fund-conscious investors. These schemes provide significant tax exemptions on specific types of income arising from designated investments, making trust-governed funds highly tax-efficient.
Supportive Environment
Hailed as the financial powerhouse, Singapore offers a robust political environment, infrastructure, and strong regulations. Presently, it is home to more than 700 financial institutions, making it a thriving landscape for trust development.
Tax Liberalization
Singapore's tax-friendly framework does not include estate duty and capital gains taxes. Income originating from overseas locations for a foreign trust may be exempt from taxes under specific circumstances. This enhances its appeal among wealth-conscious entities.
Rising HNWI Population
Asia's high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs) are growing rapidly, with the UHNWI population expected to increase by 33% by 2025. This growth fosters a thriving environment for entities seeking to establish a trusted business.
How to Reach BSW for Incorporating a Singapore Trust Company?
Contacting BSW for company formation services is a two-step process shown below:
Step 01
Drop an inquiry
The first step is to navigate to the official Business Setup Worldwide (BSW) website and submit an inquiry.
Step 02
Personalized Consultation
BSW’s expert will contact you after reviewing your inquiry. They will assist you with everything from the registration process and required documents to service costs.
Who Can Legally Serve as a Singapore Trust Company?
Here is the tabular representation of entities that qualify to be certified as a Singapore trust company:
Entity Type
Key Legal Conditions & Requirements
Licensed Trust Company (LTC)
Must be a Singapore-incorporated company or registered foreign branch. Minimum paid-up capital or qualifying assets of S$250,000. Must have at least 2 resident managers. Mandatory Professional Indemnity Insurance (PII).
Private Trust Company (PTC)
Must only serve "connected persons" (family trusts). Cannot solicit business from the public. Must engage a Licensed Trust Company to perform mandatory AML/CFT due diligence.
Banks & Merchant Banks
Must be licensed under the Banking Act 1970. Must notify MAS via Form 8 within 31 days of commencing trust business. Trust activity must be incidental to banking services.
CMS License Holders
Must hold a Capital Markets Services license (for fund management/custody). Must notify MAS via Form 8. Trust services must be incidental to their primary regulated activity.
Lawyers & Law Firms
Trust services must be incidental to their legal practice. Must notify MAS via Form 8. Governed by the Legal Profession Act in addition to TCA exemptions.
Public Accountants
Trust services must be incidental to their accounting practice. Must notify MAS via Form 8. Must be a registered public accountant or accounting firm.
Licensing Requirements for a Singapore Trust Company
Category
Requirement Detail
Statutory Reference / Criteria
Legal Entity
Must be an entity registered in Singapore or an overseas entity incorporated in Singapore
TCA Section 4
Physical Presence
Must maintain a physical establishment within the country, i.e., Singapore
MAS Guidelines
Minimum Capital
S$250,000 (Paid-up capital for local firms or qualifying assets for foreign branches).
TCR Regulation 11
Net Asset Value (NAV)
Must maintain the higher of:
1. S$187,500 (75% of min. capital) OR
2. 25% of annual expenditure from the previous year.
TCR Regulation 12
Professional Insurance
Must maintain Professional Indemnity Insurance (PII) proportionate to business size and risk
TCR Regulation 14
Resident Management
Minimum of 2 Resident Managers:
• Manager 1: At least 5 years of relevant experience.
• Manager 2: At least 3 years of relevant experience.
TCR Regulation 8 & 9
Personnel Integrity
Adherence to the MAS "Fit and Proper" criteria is mandatory for all directors and managers
MAS Fit & Proper Guidelines
Audit & Reporting
Appointment of an external auditor is mandatory. Annual accounts must be filed within 5 months of the financial year-end.
TCR Regulation 19
Compliance Systems
Must have implemented policies regarding AML/CFT (Anti-Money Laundering & Countering the Financing of Terrorism).
TCA Section 13
Documents Required For Incorporating a Singapore Trust Company
Depending on your goals, you need to arrange various key documents for trust company formation. These include:
Memorandum and Articles of Association for local and foreign entities
Incorporation certificate
ACRA-issued business profile
Audited financial statements (if applicable).
Details concerning fund procurement
Confirmation about fulfilling the minimum capital requirement
Completed MAS Personal Questionnaire Forms (to be filled by resident manager and directors)
CVs/resumes of directors and resident managers.
Certified copies of ID proof concerning directors, residential managers, and shareholders.
Cover letter to MAS.
Why Choose BSW for Forming a Trust Company in Singapore?
Establishing a trust requires compliance with numerous local laws and completing various paperwork. With BSW, you no longer have to encounter such inconveniences, as our team will take care of everything from the ground up. BSW offers a perfect blend of skill and expertise in meeting diverse business goals. Contact us today and let us know how we can help you!
Frequently Asked Questions
Is a Singapore trust company governed by the company law?
No, the Trust Companies Act (TCA) governs them.
How does a Singapore trust company differ from a trust?
A trust is a legal arrangement created by a trustee to protect its assets from claims by third parties. It can be used for wealth planning. A trust company, on the other hand, is primarily a licensed service provider specializing in trust formation services.
Which authority in Singapore oversees the incorporation of trust companies?
The name of the authority is the Accounting and Corporate Regulatory Authority (ACRA).
How long does it take to register a Singapore trust company?
The registration process can last from 3 to 5 days, depending on the paperwork and compliance thresholds.
Is a trust company in Singapore liable to pay taxes?
Yes, the income of such companies can be subject to corporate tax.
Which act governs the trust companies and their formation in Singapore?
The Trust Companies Act 2005 (TCA) governs trust companies in Singapore.
Which authority regulates the trust companies in Singapore?
The Monetary Authority of Singapore (MAS) regulates trust companies in Singapore.
