What is Trust in Singapore?
Suppose you know the importance of financial and estate management and are also concerned about succession planning. In that case, a licensed trust in Singapore will be a suitable and reliable solution for you.
Within the meaning of the Trust Companies Act 2005, the following activities fall within the definition of “trust business” in Singapore:
- Providing trust creation services;
- acting as trustee in respect of an explicit trust;
- organising for any person to act as trustee in respect of an explicit trust;
- provision of trustee services in respect of the express trust.
A company wishing to establish or operate a trust must hold the appropriate licence. In assessing an application for a trust licence, the Monetary Authority of Singapore (MAS) considers factors such as:
- Fitness and propriety of the applicant, its shareholders, resident managers and directors;
- Track record and management expertise of the applicant and its parent company or major shareholders;
- Ability to meet the minimum financial requirements and professional indemnity insurance (PII); requirements prescribed under the Trust Companies Regulations (TCR);
- Strength of internal compliance systems and processes of the applicant;
- Business model/plans and projections and the associated risks.
Your company must appoint at least 2 resident managers, one of whom must have at least 5 years of experience. All other resident managers must have at least 3 years of experience.
In addition, it is worth highlighting separately the financial requirements imposed by the regulator on the applicant, among which are:
- a minimum authorised share capital (or qualifying assets) of S$250,000; and
- The obligation to maintain at all times a minimum net or qualified asset value and adequate PII commensurate with the risk level of your trust business.
