On 3 October 2025, the Ministry of Finance Malaysia formally gazetted the Income Tax for the Single-Family Office Incentive (the “Rules”), introducing Malaysia’s first dedicated and comprehensive tax framework for single family offices (“SFOs”).

The gazettement marks a pivotal step in the Government’s ongoing efforts to position Malaysia as a trusted and competitive jurisdiction for global family wealth management, providing families and their advisers with policy clarity and long-term tax certainty.

Overview of the SFO Incentive Scheme

The SFO Incentive Scheme (the “Scheme”) provides a 20-year incentive period, structured as an initial ten-year period renewable for a further ten years, subject to compliance and continued eligibility.

Under the Scheme, qualifying SFOs may enjoy exemptions on:

• Income tax;
• Capital gains tax;
• Foreign-sourced income;
• Dividend income; and
• Stamp duty on specified transactions.

This long-term horizon and scope of reliefs place Malaysia’s framework among the most competitive in Asia, designed to attract both domestic and international family offices.

Structured Certification and Oversight

The Scheme adopts a two-tier certification framework designed to ensure governance, transparency, and regulatory oversight:

1. Initial Conditional Approval – obtained through mandatory consultation with the Securities Commission Malaysia (SC); and
2. Annual Tax Certification – confirming the SFO’s continuing compliance with the applicable requirements.

This structure affords families and their advisers’ regulatory predictability while maintaining a streamlined approval process.

Strong Market Response and Early Approvals

Since the Scheme’s launch in September 2024, the SC has reported a robust uptake. Conditional approval has been granted to six family offices, representing an indicative aggregate asset under management (AUM) of approximately RM400 million.

More than 30 Expressions of Interest have been received to date, reflecting strong momentum from both Malaysian families seeking to repatriate wealth and international families looking to establish a strategic base to access ASEAN markets.

The SC has also undertaken international outreach, including engagements in Taiwan and Oman, underscoring Malaysia’s growing visibility in the global family office ecosystem.

Economic Anchoring within the Forest City Special Financial Zone

A cornerstone of the Scheme is the requirement for qualifying SFOs to establish their operations within Pulau 1 of the Forest City Special Financial Zone (SFZ). This embeds the Scheme within Malaysia’s broader nation-building agenda by mandating:

• The employment of local professionals;
• Capital market participation; and
• Domestic investments aligned with strategic sectors.

Investments channelled into Promoted Sectors including initiatives under the New Industrial Master Plan (NIMP) 2030, the Johor–Singapore Special Economic Zone (JS-SEZ), sustainability-linked ventures, and waqf-related projects qualify for a 1.5x AUM multiplier, effectively incentivising alignment with Malaysia’s long-term industrial and sustainable development goals.

Supporting Measures: One-Stop Facilitation and Dedicated Visa Track

To ensure ease of establishment, a one-stop centre has been introduced to coordinate regulatory engagement, licensing, and operational facilitation for family offices.

Additionally, a dedicated visa track for family members and investment professionals has been implemented, enhancing Malaysia’s attractiveness as a domicile for cross-border families seeking both residency and investment alignment within a stable and well-regulated jurisdiction.

Institutional Support and Future Outlook

The SC, led by Chairman Dato’ Mohammad Faiz Azmi, has reaffirmed the government’s commitment to cultivating a robust and well-governed family office ecosystem. The SC will continue to expand its promotional efforts, including through the annual Family Office Summit, publication of a Family Office Guide, and further global engagements to drive awareness and participation.

With the Rules now in force, the Scheme is fully operational, offering the clarity and structure needed to underpin Malaysia’s ambition of becoming a regional hub for family offices and long-term wealth management.

The gazettement of the Rules signifies not merely a tax incentive, but the establishment of a comprehensive regulatory ecosystem integrating wealth management, nation-building, and sustainable finance objectives.

Malaysia’s approach combining policy certainty, substance-based requirements, and operational flexibility positions it as a compelling alternative for families evaluating jurisdictional diversification across Asia.

How KGP Legal Can Assist

KGP Legal advises clients on:

• Establishment and structuring of family offices in Malaysia and across ASEAN;
• Qualification under the SFO Incentive Scheme and related certification processes;
• Cross-border tax, regulatory, and residency considerations; and
• Compliance with the Securities Commission’s consultation and reporting requirements.

Do contact our Malaysian Team lead (Ashvinie) at enquiry@familyofficeforestcity.my or WhatsApp at +65 9810 1685 for further details. The InterAsia Law Alliance has a team of Malaysian-qualified lawyers and any Malaysian-law advice required for the setting up of the SFOVs and related services will be handled by Malaysian qualified attorneys.