Malaysia Introduces 0% Tax Incentive for Single Family Offices at Forest City’s Special Financial Zone (By Malaya Corporate)
On 20 September 2024, Malaysia’s Finance Minister II, Senator Datuk Seri Amir Hamzah Azizan, announced that the Special Financial Zone (SFZ) in Forest City, Johor will become the first location in Malaysia to offer a zero-tax incentive for the Single Family Office (SFO) scheme.
Under this new initiative, Single Family Office Vehicles (SFOVs) will enjoy a 0% tax rate on income generated from eligible investments, with the Securities Commission Malaysia (SC) overseeing the program.
What is an SFOV?
A Single Family Office Vehicle (SFOV) is a company owned and operated by one wealthy family. It is established to manage that family’s investments, wealth, and assets across multiple generations, ensuring continuity, privacy, and strategic control.
The Benefits: Family Office 0% Tax Rate
To enjoy a 0% tax rate on your investment income, your SFOV must meet a few conditions:
(i)Set up an office on Pulau 1 in the Special Financial Zone.
(ii)Operate for up to 20 years (an initial 10 years, plus a possible 10 more.)
How to be qualify?
To qualify for the tax incentive during the initial period, a SFOV must fulfil below conditions:
(i)Incorporate a new investment holding company in Malaysia.
(ii)Manage at least RM30 million in assets.
(iii)Spend RM500,000 a year locally.
(iv)Hire two full-time staff, including one investment professional earning at least RM10,000 per month.
And if you want another 10 years of incentives?
To qualify for the tax incentive during the additional period, a SFOV must fulfil below conditions:
You’ll need RM50 million in assets, four employees, and spend even more locally.
(ii)Manage at least RM50 million in assets.
(iii)Spend minimum RM6500,000 a year locally.
(iv)Employ minimum four full-time staff.
Licensing?
Normally, managing investments needs a license.
But good news! If your management company only serves your own SFOV, you might be exempted from licensing.
Interested?
You’ll need to pre-register with the Securities Commission Malaysia to check your eligibility.
Full launch expected by mid of 2025!
The SFO Scheme could bring billions in benefits to Malaysia, and help families grow their legacy for generations to come.
