Mukesh Ambani reportedly plans to set up family office in Singapore, benefit from low taxes and more security

With more than Rs 1.88 lakh crore paid in taxes over the last financial year, Mukesh Ambani’s Reliance Industry is possibly the largest tax payer in India. The announcement was made in the wake of a probe against the Ambani family under the black money act over undisclosed foreign income, which was closed this year. Now reports suggest that Mukesh Ambani is opening a family office in Singapore, which is known for its low taxes and financial security.

Becoming a hub for business clans

Family offices in Singapore are meant for managing finances and handling tax filings as well as compliance, through solutions specifically aimed at catering to ultra-rich families. Singapore has also been able to resist turbulence in the finance sector during the pandemic, making it more popular for setting up family offices. Less likelihood of regulatory changes, tax breaks and political stability are some of the reasons why Singapore is home to more than 700 family offices.

Singapore tightens the screws

These family offices also handle investments and charitable trusts, and the Ambanis have reporetdly appointed a manager to hire staff and start operations. The move also follows Singapore’s policy to provide tax cuts only to those family offices which have at least $7.81 million under management. Startup founders in India are also exploring the country, after Flipkart’s Binny Bansal recently moved to Singapore.

Ambani going global?

In line with India’s traditional approach, almost 85 per cent of firms in India Inc are family-owned. Apart from Singapore, a lot of Indian firms also prefer Dubai for setting up family offices, and freedom to trade foreign exchange, less capital controls and no estate duty are often cited as key factors. The decision taken by the Ambani family can also be a part of the strategy to take the conglomerate global, since he had told shareholders about international plans last year.