(KUALA LUMPUR) Malaysia is looking to attract wealthy locals and foreigners with assets under management (AUM) of between RM500 million (S$151.3 million) and RM1.2 billion to set up family offices in the country over the next five years, said Finance Minister II. Amir Hamzah Azizan.

During a parliamentary session on Tuesday (Nov 5), he expressed optimism that the initiative could generate between RM40 million and RM110 million in local investments in high-growth, high-value sectors.

The number of single-family offices worldwide, currently estimated at 8,030, is expected to grow 75% to more than 10,720 by 2030, with assets under management increasing from $3.1 trillion to $5.4 trillion. dollars. according to a Deloitte report.

“The Securities Commission (of Malaysia) also projects a potential economic multiplier effect of three to five times local investment in the first five years,” Amir added.

This announcement follows a single-family office program unveiled by the government in September, aimed at encouraging wealthy individuals to set up operations in Forest City, Johor, from the first quarter of 2025.

The program is part of the government’s broader efforts to revitalize Forest City – a multibillion-dollar mixed-use development – ​​and make it a special financial zone.

A NEWSLETTER FOR YOU

Friday, 8:30 a.m.

Asian business

Business outlook focused on the fast-growing economies of Southeast Asia.

A family office is a private wealth management advisory service aimed at ultra-high net worth individuals or families, typically managing large investable assets.

To benefit from these incentives, family offices must meet specific investment and spending requirements each year. These include paying investment managers a minimum monthly salary of RM10,000, maintaining a physical office, incurring annual local expenses of at least RM500,000 and incurring a minimum of 10 per cent assets under management in local investments.

“These requirements are designed to create economic opportunities in the local professional services sector, thereby contributing to Malaysia’s broader economic growth,” Amir said.

As Malaysia welcomes high net worth individuals to set up family offices, the minister stressed that their business activities will be monitored to ensure compliance with regulations and prevent involvement in illegal activities such as money laundering and financing of terrorism.

He stressed that this program aims to stimulate and double the country’s economy by attracting foreign investments.

“This initiative aims to improve and grow the country’s economy. The funds provided by these offices will be directed towards domestic investments,” he said.

Tough competition

The move also signals Malaysia’s entry into the competitive family office landscape, joining Singapore and Hong Kong as leaders in the Asia-Pacific region.

Loong Kok Wen, deputy director of RHB Investment Bank, noted that Malaysia’s geographical advantage – particularly that of Forest City – positions the country favorably to attract affluent individuals considering other destinations.

Neoh Jia Man, portfolio manager at Tradeview Capital, highlighted the need for the Malaysian government to establish a regulatory framework dedicated specifically to family offices.

“Unlike traditional back offices that focus on large headcount and reducing operational costs, family offices prioritize favorable tax structures, minimal compliance burdens and local investment opportunities – factors that are currently lacking in the country,” he said.