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Single Family Office (SFO) Tax Incentive
  • INTRODUCTION
  • KEY REQUIREMENTS
  • TAX INCENTIVE CERTIFICATION
  • GETTING IN TOUCH
  • INTRODUCTION

    The SFO Incentive Scheme offers a unique tax incentive framework aimed at making Malaysia a competitive hub for wealth management. The table below outlines the key tax incentive available for the Single Family Office Vehicle (SFOV) under the SFO Incentive Scheme.

    Beneficiary

    		 Incentive Tax Order
    Single Family Office Vehicle / Single Family Fund Company (SFOV)

    Exemption from income tax in respect of chargeable income of a SFOV which carries on the following activity  undertaken:

    • holding of assets by the SFOV for the interest of the single family; and
    • investment activity for the interest of the single family including buying or selling of assets and trading of capital market products.


    The rate of income tax which shall be charged under the Income Tax Rules is zero per cent.

    Income Tax (Single Family Office Incentive Scheme) (Pulau 1 of Forest City Special Financial Zone) Rules 2025
    (“P.U.(A) 350/2025”)
    (“Income Tax Rules”)

    Download PDF
  • KEY REQUIREMENTS

    To qualify for the tax incentive above, prospective applicants must meet specific criteria as summarised in the table below. Kindly note that information in this table is not exhaustive and must be read together with the relevant tax order, guidelines, instructions, or any other communication issued by the SC.

    Key requirements

    Initial assessment period
    (First 10 Years)

    Subsequent assessment period
    (Next 10 Years)
    Assets Under Management (AUM) Minimum AUM of RM30 million in permitted investments as stated in Appendix 1 of the Guidelines on Single Family Office Incentive Scheme Minimum AUM of RM50 million invested in permitted investments as stated in Appendix 1 of Guidelines on
    Single Family Office Incentive Scheme
    Local investments 10% of AUM or RM10 million, whichever lower, in local eligible and promoted investments as stated in Appendix II of the Guidelines on Single Family Office Incentive Scheme 10% of AUM or RM10 million, whichever higher, in local eligible and promoted investments as stated in Appendix II of the Guidelines on Single Family Office Incentive Scheme
    Full-time officers At least 2 full time employees of which 1 must be an investment professional (IP) At least 4 full-time employees
    Local operating expenditure Minimum of RM500,000, annually Minimum of RM650,000, annually
    Audited financial statements Annual submission
    Permitted AUM
    List of Permitted Assets and Investments (Local & Global) 90% of AUM
    1. Shares or securities equivalent to shares1 that are traded on any exchange
    2. Shares of any company2 incorporated under the Companies Act 2016
    3. Debenture, stocks or bonds issued by any government
    4. Shares in or debenture of, a body corporate or an unincorporated body
    5. Notes, commercial papers and treasury bills
    6. Derivatives that are traded on a derivatives exchange, or dealt in the OTC market, where the underlying instrument of a derivative is a commodity, such derivative must be settled in cash at all times
    7. Placement of domestic and foreign deposits with a licensed bank
    8. Interest rate or currency contracts on a forward basis, interest rate or currency options, interest rate or currency swaps, and any financial derivatives
    9. Units or shares in collective investment schemes that are managed by an entity which is approved, authorised or licensed by any securities regulator to conduct fund management activities
    10. Assets that are managed by CMSL holder for fund management undertaking portfolio management
    11. Foreign venture capital & private equity fund
    12. Unit trust fund issued by an entity incorporated in Malaysia
    13. Islamic capital market products including Shariah-compliant equities, Islamic Collective Investment Schemes (ICIS) and Sukuk.
    14. Real estate limited to Forest City – residential and commercial properties
    15. Any other assets as may be permitted by the SC on a case-by-case basis

    1The following are excluded and do not form part of the permitted assets -
          i. tokenised capital market products, i.e. using distributed ledger technology (DLT) to create a digital representation of the assets; and

          ii. digital assets, as defined in the Guidelines on Digital Assets issued by the SC.
    2 Other than standalone companies whose sole business is holding Malaysian immovable properties without any operational business activities.


    List of Local Eligible and Promoted Investments

    Local Eligible Investments

    1. Securities listed on Bursa Malaysia Sdn Bhd
    2. Islamic capital market products including Shariah-compliant equities, Islamic Collective Investment Schemes (ICIS) and Sukuk issued by an entity incorporated in Malaysia
    3. Ringgit-denominated debentures and Malaysia Government Securities
    4. Exchange traded derivatives listed on Bursa Malaysia Derivatives Berhad
    5. Private Equity (PE) funds managed by SC registered PE managers
    6. Venture Capital (VC) funds managed by SC registered VC manager
    7. Assets under a portfolio management mandate, where at least 70% of the underlying assets is in Malaysia and the mandate is carried out by a holder of a Capital Market Services Licence for fund management undertaking portfolio management.
    8. Shares of companies* incorporated in Malaysia that is under technology-based sectors or relating to Sustainable and Responsible Investments (SRI), as set out in the table below
    9. Any other assets as may be permitted by the SC on a case-by-case basis

    Categories

    		 Sectors
    Technology-based
    • Advanced electronics and information; components, systems and architecture, software, applications, communications, supporting product and services
    • Telecommunication
    • Equipment/instrumentation, automation and flexible manufacturing systems
    • Biotechnology, bioconversion and genetic engineering
    • Healthcare
    • Electro-optics, non-linear optics and optoelectronics
    • Advanced materials
    • Energy
    • Aerospace
    • Transportation
    • Value-add services
    • Emerging technologies
    • Artificial intelligence and machine learning
    • Cybersecurity
    • Green technology
    • Virtual reality and augmented reality
    • Internet of Things (IoT)
    • Automation and autonomous systems
    • Blockchain and distributed ledger technology
    • Financial technology
    Sustainable and Responsible Investments (SRI)

    Guided by SRI Taxonomy

    *Shares of private companies whose sole business is holding Malaysian immovable properties without any operational business activities are not eligible local investment.

    Local Promoted Investments - 1.5x multiplier amount for these assets

    1. Sustainability funds, bonds and sukuk that align with Malaysian or ASEAN standards for underlying Malaysian projects
    2. Islamic Capital Market funds under the Waqf Featured Fund Framework
    3. Equity Crowd Funding (ECF) campaigns on SC-registered ECF platforms
    4. Peer-to-Peer (P2P) campaigns on P2P platforms regulated by the SC
    5. Shares of companies approved by MIDA to carry out approved projects under the Johor-Singapore Special Economic Zone (JS-SEZ) Tax Incentive Package
    6. Shares of companies operating within the New Industrial Master Plan 2030 (NIMP) prioritised sectors
    7. Any other assets as may be permitted by the SC on a case-by-case basis

    Categories

    		 Sectors

    NIMP Prioritised sectors
    • Aerospace
    • Chemical
    • Electrical and Electronics
    • Pharmaceutical
    • Medical devices

  • TAX INCENTIVE CERTIFICATION

    Prior to submitting a claim to the IRB for the income tax exemption, a prospective applicants must obtain certification from the SC demonstrating that the a prospective applicant has met all the relevant criteria and conditions as specified in the Income Tax Rules or by the SC.

    The certification process is outlined in the Guidelines on Single Family Office Incentive Scheme are available here.
  • GETTING IN TOUCH

    Any questions or queries regarding these incentives can be addressed to [email protected].

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