Malaysia’s ambition to establish itself as a premier destination for Family Offices is underscored by the strategic initiatives under the Malaysian Family Office Incentive Scheme (the “Scheme”). Spearheaded by the Securities Commission Malaysia (SC) and Bank Negara Malaysia (BNM), the Scheme introduces a robust framework to attract global wealth, enhance operational flexibility, and foster sustainable investment practices. Below, we delve into the key aspects shaping this ground-breaking initiative.
Central to Malaysia’s strategy is the recognition of international expertise as a driver of the Family Office ecosystem. The SC has committed to facilitating employment passes for full-time staff of Single-Family Office Vehicles (SFOVs) and Single-Family Office (SFOs). This support extends to visas for accompanying family members, ensuring seamless integration for professionals relocating to Malaysia.
To further enhance its appeal, a comprehensive residence package is under development, tailored to meet the needs of high-net-worth individuals (HNWIs) and their teams. This initiative, expected to be operational by the first quarter of 2025, reflects Malaysia’s commitment to creating a welcoming and competitive environment for global wealth managers, investment advisors, and other specialized talent.
The Forest City Special Financial Zone (SFZ) is envisioned as a hub for investment agility. BNM has introduced Foreign Exchange Policy (FEP) flexibilities that empower Family Office to adapt swiftly to dynamic market conditions. Key provisions include:
These flexibilities, subject to a straightforward one-time registration with BNM, enable Family Office to diversify their portfolios and align investment strategies with global opportunities.
While SFOVs must be based in Forest City, there are no exclusivity requirements limiting investments to the SFZ. Family Office retain the freedom to invest both domestically and internationally, leveraging Malaysia’s diverse economic landscape.
The Scheme mandates a minimum Assets Under Management (AUM) of RM30 million, with a diversified composition including:
Additionally, at least 10% of the total AUM or RM10 million (whichever is lower) must be allocated to Malaysian investments, spanning Bursa Malaysia-listed securities, Islamic products, venture capital, and promoted investments in sectors like technology and sustainability.
This carefully structured framework ensures that Family Office can pursue diverse investment opportunities while contributing to Malaysia’s broader economic objectives.
To ensure clarity and accessibility, detailed guidelines for the Scheme are set to be released by the first quarter of 2025. Prospective applicants are encouraged to engage with us for personalised consultations as we will be able to assist prospective applicants in navigating the requirements’ effectively once detailed guidelines are available.
Additionally, Malaysia’s commitment to sustainability aligns seamlessly with global trends in Environmental, Social, and Governance (ESG) investing. While no additional compliance frameworks are being introduced under the Scheme as for now, Family Office are still encouraged to align with existing national and ASEAN sustainability standards.
This approach offers Family Office the flexibility to integrate ESG principles into their investment strategies, reinforcing Malaysia’s position as a hub for innovative and responsible investment practices.
The Scheme offers tax incentives for up to 20 years, structured across two 10-year periods. While the scheme is currently exclusive to Forest City, its success may pave the way for broader applications in the future, potentially expanding benefits or introducing new investment categories.
The Scheme represents a sophisticated, forward-looking initiative designed to attract global wealth and talent. Through a balanced emphasis on flexibility, sustainability, and strategic planning, the Scheme positions Malaysia as a leading destination for Family Office seeking a dynamic and supportive environment.
As the operational launch of the Scheme in Q1 2025 draws near, we invite you to connect with our team to ensure you are fully equipped to capitalize on this transformative opportunity. For personalised assistance and further details, please contact our Malaysian Team Lead, Nathan Maharajah, at enquiry@familyofficeforestcity.my or via WhatsApp at +65 9810 1685.
With a team of highly skilled Malaysian-qualified lawyers, the InterAsia Law Alliance is well-positioned to provide comprehensive legal support for setting up SFOVs and related services.