KUALA LUMPUR: The Securities Commission Malaysia (SC) has reaffirmed the country’s openness to long-term, purpose-driven investments through the establishment of a dedicated framework for a Single-Family Office (SFO) Incentive Scheme.
SC chairman Datuk Mohammad Faiz Azmi said the framework was developed through the engagement with industry leaders, high-net-worth families both locally and internationally, as well as other key stakeholders.
“Minister of Finance II Datuk Seri Amir Hamzah launched the scheme in September last year as part of the Forest City Special Financial Zone. The scheme was designed with a clear purpose: to position Malaysia as a home for generational wealth, committed to long-term value creation, and providing transformative spillovers for our economy,“ Faiz told reporters in a briefing today.
An SFO is a private setup created by a wealthy family to manage their entire financial affairs under one roof. Instead of using different banks, advisers or services, the family builds its own team of experts to handle everything from investments and property to taxes, legal matters and daily expenses, as well as charitable giving.
It is called “single-family” because it serves only one family, allowing for complete control, privacy and tailored management of their wealth across generations.
In announcing the formal gazetting of the SFO tax incentive, Faiz said the interest in the scheme over the past 12 months has been very encouraging, with six conditional approvals granted, indicative of assets under management (AUM) of close to RM400 million.
“Alongside this, we have also received 30 Expressions of Interest and have a target of RM2 billion in AUM by the end of 2026. The pipeline includes Malaysian families repatriating wealth back home, as well as foreign families establishing a regional base,“ he said.
Faiz pointed out that SFOs are required to have a minimum of RM30 million in AUM, which increases to RM50 million after the first 10 years.
These assets will be centrally managed from Malaysia, ensuring that investment decisions, oversight and governance functions are anchored domestically.
The SFOs are required to invest RM10 million or 10% of AUM, whichever is lower (for the first 10 years) and higher (for the next 10 years), in eligible and promoted investments.
Faiz said each SFO brings substantial domestic economic substance requirements.
These include a minimum of RM500,000 in annual operating expenditure during the initial period, rising to RM650,000 thereafter, the hiring of investment professionals and the setting up of an office space within the designated financial zone.
“This will result in spill-over effects for legal, banking, property, education and other support services.
“Equally important is how the scheme aligns with Malaysia’s national development plans through Promoted Investments.
“Investments into key sectors provide a 1.5 times multiplier for assets under management – a powerful incentive that ensures private wealth is actively deployed in support of national priorities,“ Faiz said.
Promoted investments include sustainability funds, bonds and sukuk aligned with Malaysian or Asean standards for local projects.
They also included priority sectors under the New Industrial Master Plan 2030, investments in the Johor–Singapore Special Economic Zone and startups and SMEs through recognised equity crowdfunding and peer-to-peer financing platforms, as well as waqf funds aimed at strengthening Malaysia’s leadership in sustainable and Islamic finance.
Faiz said, “The formal gazette of three key tax orders, covering capital gains tax The exemption, stamp duty relief, and the zero per cent tax rate for eligible income represent the culmination of extensive preparation.
“We are confident that the scheme’s 20-year duration and the two-step certification process will provide the proper oversight, stability and predictability that multi-generational wealth requires.
“Looking ahead, we anticipate continued expansion of both domestic and international interest, particularly from the Asian region and the Middle East.”
With the formal gazettal of the tax order and the robust structure the SC has put in place, the SFO scheme moves into its next phase, from commitment to execution.
“I am confident that with the early success we have achieved, the strong foundation established and the robust pipeline we continue to build, Malaysia will be well-positioned to tap the opportunities in the global wealth management segment,“ Faiz said.