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- Haroon said that to fully capitalise on the opportunity, Malaysia needs to match the incentives with action in three key areas — policy stability, credibility, and ecosystem development.
KUALA LUMPUR (Oct 7): Malaysia’s package of tax incentives designed to attract single-family offices (SFOs) could deliver up to RM10.7 billion in economic benefits, but incentives alone are not enough to sustain growth in this segment.
In a statement Tuesday, Juwai IQI’s Global Wealth Office head Haroon Anwar said that to fully capitalise on the opportunity, Malaysia needs to match the incentives with action in three key areas — policy stability, credibility, and ecosystem development.
He noted that Malaysia can succeed as an accessible base for smaller and newer family offices, particularly those from South Asia and Southeast Asia.
“This is what you’ll start to see over the next few years: new infrastructure announced to improve connectivity and lifestyle options in Forest City, new banking regulations and tax laws addressing issues most relevant to family offices, a new visa for expert financial professionals, and ambassadors for Malaysia’s financial system who promote the opportunities available here,” he said.
Furthermore, he said Malaysia is targeting offices with smaller assets.
Malaysia sees an opportunity because, over the next decade, family offices will undergo an unprecedented generational transition. By 2035, 40% of all family offices operating today will have transferred their wealth to the next generation.
“In the next five years, the number of Asian SFOs is expected to surge, climbing by 40%, from 2,290 in 2024 to 3,200. Many of these will have just the right level of assets to be attracted to Malaysia.
“The economic benefits of attracting family offices are significant. The RM10.7 billion in additional economic growth will come partly from the requirement that every family office established in Malaysia must have a local team and spend at least RM500,000 in the local economy,” he added.
Haroon said Malaysia must eliminate ambiguity by enacting clear, long-term policies on inheritance, trust structures, jurisdictional matters, and family office taxation.
To achieve credibility as a hub for family offices, Malaysia needs world-class advisors to promote its strengths and successful case studies, to demonstrate real outcomes.
Creating a mature financial ecosystem is the most complex of the three keys to success, he said.
“An ecosystem combines regulations, lifestyle, financial opportunities, talent, market access, and connectivity. Together, all these factors make it possible to do business at a world-class level.
“The ecosystem in Malaysia needs a 'Family Office Talent Pass' to attract global wealth-management experts, of whom there are too few in the country. We also need to deepen capital market products tailored to family offices,” he added.
As Penang girds itself towards the last lap of its Penang2030 vision, check out how the residential segment is keeping pace in EdgeProp’s special report: PENANG Investing Towards 2030.
