After attracting a large number of tycoons, Singapore is about to start "harvesting".

In the face of a large amount of wealth brought by a group of billionaires, the Singapore authorities have launched a "harvesting" operation.

On Wednesday local time, the Monetary Authority of Singapore (MAS) announced that it will adjust the tax incentives for single-family offices to promote local employment and stimulate investment in the domestic stock market.

Ravi Menon, Managing Director of MAS, said at a press conference after the release of the annual report that the tax incentives will be adjusted to encourage these companies to invest in climate-related projects and carry out more charitable activities in Singapore.

Menon said, "Given the amount of wealth we have attracted here and the tremendous success we have achieved, we have the ability to make wealth play a greater role in our society and economy."

Due to the tax exemption enjoyed by family offices for a series of investments in Singapore, the number of family offices in Singapore has increased from 400 at the end of 2020 to 1,100 by the end of 2022.

The increase in family offices has boosted the total assets managed in Singapore, but most of the wealth has not been invested domestically, which has weakened people's expectations of creating a large number of local job opportunities. The new policy is expected to address this issue.

Under the new tax incentive plan, the Singapore authorities will encourage family offices to participate in joint venture financial institutions, including supporting institutions that facilitate the country's transition to net-zero carbon emissions.

For every SGD 1 donated by family offices to these institutions, they will receive a SGD 2 (equivalent to USD 1.48) incentive.

All investments in non-listed Singapore companies, including private credit, will be recognized.

For investments in Singapore-listed stocks and eligible ETFs, as well as non-listed funds that primarily invest in locally listed stocks, the investment amount will be recognized as double.

However, the effectiveness of the new tax incentive policy in boosting investment remains to be seen.

Menon said that in fact, most of the wealth flowing into Singapore comes from institutional investors, not family offices. He stated that as of 2021, single-family offices that have applied for and obtained tax incentives manage assets of about SGD 90 billion, which is less than 2% of the total assets of SGD 54 trillion managed domestically.