Malaysia Gazettes Single Family Office (SFO) Rules

The Ministry of Finance has gazetted the Income Tax (Single Family Office Incentive Scheme) (Pulau 1 of Forest City Special Financial Zone) Rules 2025.

The Gazette, dated 3 October 2025, underlines the Government’s strong commitment in strengthening Malaysia’s family office and asset owner ecosystem. It also provides families and their advisers with the policy certainty and confidence to make structuring decisions.

The Securities Commission Malaysia (SC) said there has been a strong interest since the Scheme was launched in Forest City in September 2024.

The SC has so far granted Conditional Approval to six families with an indicative assets under management (AUM) of close to RM400 million – well exceeding earlier expectations.

This reflects the SC’s active promotional efforts and engagement with families, advisers, government agencies, and Forest City stakeholders. The interest spanned Malaysian families looking to repatriate wealth and international families establishing a base to access ASEAN markets.

This early momentum has been reinforced by the SC’s international outreach, including recent visits to Taiwan and Oman, which drew strong interest from family advisers, bankers, and trustees.

These conversations highlight the appeal of Malaysia’s family office model — one that blends competitiveness, robust governance, cost efficiency and high standard of living.

To date, the SC has received more than 30 Expressions of Interest. It targets RM2 billion in AUM by the end of 2026, with family offices establishing their operations within Forest City.

The SC, together with key partners, will continue to leverage the strong interest and support from Malaysian families, while adopting a proactive, market-focused approach to drive promotion and awareness internationally.

The gazettement also formalises Malaysia’s first dedicated, long-term tax incentive framework for SFOs, cementing the nation’s commitment to positioning itself as a hub for global family wealth management.

The framework offers a 20-year incentive horizon (10 + 10 years) which provides exemptions on income, capital gains, foreign-sourced income, stamp duty, and dividend income for shareholders.

The SFO Scheme involves two-step certification process, ensuring proper oversight while maintaining operational efficiency:

1. initial conditional approval through mandatory SC consultation
2. annual tax certification to confirm ongoing compliance that provides families and advisers the confidence to proceed with structuring decisions.

The SC Chairman Dato’ Mohammad Faiz Azmi said that the government, with the SC’s support, has established a comprehensive incentive scheme to strengthen Malaysia’s family office ecosystem.

Supporting this, a one-stop centre has been established, serving as a central platform to streamline services.

“The one-stop service coordination model further gives clarity and eliminates complexities, making Malaysia an attractive destination for wealthy families and international investors,” he said.

“Looking ahead, we anticipate continued expansion of both domestic and international interest,” he said.

Moving forward, the SC will expand its annual Family Office Summit to showcase diverse investment opportunities, facilitate networking and publish a detailed guide to assist families navigate Malaysia’s regulatory framework and ecosystem.

A key feature accompanying the SFO framework is a dedicated visa track for families and their investment professionals. This feature has quickly become an important factor for foreign families considering Malaysia as their base.

The SFO Scheme embeds a strong nation-building dimension by requiring SFOs to establish offices in the Forest City Special Financial Zone, employ local staff and invest in Malaysia’s capital markets.

It balances substance requirements with operational flexibility, ensuring genuine economic activity while supporting diverse family wealth management strategies.

Investments into Promoted Sectors, such as the New Industrial Master Plan (NIMP) 2030, the Johor–Singapore Special Economic Zone (JS-SEZ), equity crowdfunding, peer-to-peer financing, sustainability, and waqf-linked initiatives, receive a 1.5x multiplier for Assets Under Management (AUM).

This ensures that family wealth contributes directly to innovation, startups, advanced industries, and sustainable finance.

With the gazettement of the rules, the SFO Scheme is now fully operational, setting Malaysia on the path to becoming a trusted base for family offices in Asia.

For more information or any queries regarding the Family Office Scheme, please refer to the SFO Dedicated Webpage or email SFOScheme@seccom.com.my.