What happened
In the Budget 2027 speech on 9 October 2026, Prime Minister and Finance Minister Anwar Ibrahim said a multi-family office (MFO) model will be introduced in the Forest City Special Financial Zone, allowing licensed fund managers to serve several families, including approved single family offices. The speech gave no tax rate, incentive period, eligibility or exit conditions, or start date for the MFO.
The existing Forest City single family office (SFO) regime is already law: the Income Tax (Single Family Office Incentive Scheme) (Pulau 1 of Forest City Special Financial Zone) Rules 2025 [P.U.(A) 350/2025], gazetted on 3 October 2025 and effective from 1 September 2024. It offers 0% tax for ten years of assessment, extendable for a further ten, for applications to the Securities Commission until 31 December 2034. Initial conditions include RM30 million AUM, two full-time staff (one investment professional paid at least RM10,000 a month), RM500,000 annual local operating expenditure, and local investment of the lower of RM10 million or 10% of AUM. The second ten-year period carries stricter conditions, including at least four full-time employees and RM650,000 of annual local operating expenditure.
Why it matters
For a Singapore-based family, the 0% headline is not "0% versus 17%": a Singapore 13O or 13U fund already exempts specified income. The real comparison is conditions, substance and control. A Forest City vehicle run in practice from Singapore risks a Singapore residence challenge, and the MFO route – if it extends the 0% rate – could let a Malaysian licensed manager carry the substance burden that a Singapore SFO must otherwise build in-house.
What to do now
Treat the MFO as an announcement, not a regime. If Johor appeals, cost the SFO rules as enacted against your Singapore structure – headcount, spending, local investment and where decisions are actually taken – and wait for the MFO conditions before moving assets.
Key resources
General information only; not tax or legal advice.
