Starting an EAM in Singapore

Ingenia consultants
June 30, 2020


External or independent asset managers and multi-family offices require a license for fund management and, in most instances, also obtain an exemption from the requirement to hold a license for financial advisory to carry out their services in Singapore.

Although the terms are not conclusively defined, external or independent asset managers (“EAMs” or “IAMs”) provide asset management services for high net worth individuals (“HNWIs”). Multi-family offices (“MFOs”) generally offer broader services to their clients beyond asset management, including for example structuring of entities, accounting, operational management of particular assets or even concierge services.

Both types of service providers carry out the same kinds of regulated activities under Singapore financial regulation: They manage the assets of multiple clients on a discretionary basis, i.e. they take the investment decisions on behalf of the client, or they provide financial advice to the client, i.e. they make investment recommendations and the client takes the decision. Under Singapore financial regulations, the first activity falls under “fund management”[1] and the second activity is providing a “financial advisory service”[2]. Both activities require licensing by the Monetary Authority of Singapore (“MAS”) or exemption thereof.[3]

Discretionary Asset Management

As outlined above, the discretionary management of clients’ portfolios is considered “fund management”. It is regulated under the Securities and Futures Act (“SFA”) and carrying out this activity requires a capital markets services (“CMS”) license for fund management. Although multiple kinds of fund management licenses are available, two options stand out for EAMs and MFOs:

  1. the licensed fund management company restricted to servicing accredited and institutional investors (“A/I LFMC”) and
  2. the registered fund management company (“RFMC”).[4]

Both licenses restrict the EAM / MFO to servicing accredited and institutional investors. Accredited investors essentially being wealthy individuals (including individuals with net assets exceeding SGD 2m, net financial assets exceeding SGD 1m or an annual income of more than SGD 300,000) and entities (including corporations with net assets exceeding SGD 10m), the target client group of EAMs and MFOs. Institutional investors are essentially regulated financial institutions and government entities. In addition, an RFMC is restricted to a maximum of 30 clients and assets under management (“AUM”) of a maximum of SGD 250m.


The requirements for an A/I LFMC and an RFMC are essentially the same, but MAS has higher expectations for an A/I LFMC and will scrutinise the company’s meeting of the requirements more closely.

  • Capital: The EAM / MFO must have a base capital of at least SGD 250,000. Because this base capital must be maintained on an on-going basis, the EAM / MFO is well advised to add expected expenses until the company turns profitable for its capitalisation.
  • Personnel: The EAM / MFO requires two directors with more than 5 years of relevant experience, one of whom must be executive and resident in Singapore, a CEO with more than 5 years of relevant experience who must also be resident in Singapore, two relevant professionals with more than 5 years of relevant experience and resident in Singapore, and two representatives who carry out the regulated activity. Hereby, one person can fill multiple positions. As a result, it is enough to have two individuals, if both of them have more than 5 years of relevant experience, are resident in Singapore, are appointed as directors and carry out the regulated activity. Because they will be limited to serving accredited and institutional investors, they won’t need to pass any exams. Nonetheless, the EAM / MFO must be able to demonstrate that among its employees, it has the capabilities necessary to proficiently carry out the regulated activity of fund management / discretionary asset management.
  • Activities: The EAM / MFO must carry out the regulated activity of fund management / discretionary asset management. The EAM / MFO must be more than simply a sales channel for another entity / other entities carrying out the regulated activities. It must not fully rely on service providers for the investment management, but central activities must be carried out by its own personnel. Essentially all other activities, such as accounting, payroll, compliance, and IT, can be outsourced.
  • Office: The EAM / MFO is required to operate from a segregated office, access to which is generally restricted to the employees of the EAM / MFO.

MAS provides a simple overview of the requirements under

Aside from the above requirements, the EAM / MFO must establish its operating processes and have policies and procedures in place for this purpose and to ensure its compliance. For your application for licensing, you must provide a business plan that lays out your EAM’s / MFO’s planned structure and organisation, its business, projected growth in customers and AUM as well as projected revenue and expenses. Your business plan must be solid and provide a good prospect for a sustainable business.

Financial Advisory

A/I LFMs and RFMCs can file for an exemption from the requirement to hold a financial advisers license. This will allow the EAM / MFO to provide financial advice, in addition to the discretionary asset management. The requirements for the fund management license will essentially also cover the requirements for the EAM’s / MFO’s exemption from the requirement to hold a financial advisers license. The EAM / MFO needs to complete the respective forms and demonstrate that its personnel also have the required capabilities for financial advisory services.


This cursory overview of the requirements to start an EAM or MFO in Singapore may look simple. It must not be underestimated. Establishing and, most importantly, running a successful EAM / MFO requires great effort, hard work and grit. There are many intricacies to facilitating your successful application and various assessments need to be carefully prepared. If you are interested in learning more, contact us at

[1] Second Schedule to the SFA.

[2] Second Schedule to the FAA.

[3] Sec. 82 SFA and sec. 6 FAA respectively.

[4] From strict regulatory point of view, the RFMC is exempt from holding a capital markets services license for fund management, but authorisation from MAS is nonetheless required.