Family Office in Malaysia (Forest City): Rules and Tax 2026

How is a family office licensed in Malaysia (Forest City)?

The family sets up two companies under the Companies Act 2016, wholly owned by its members: the single family office vehicle (SFOV, also called a 'single family fund company', incorporated on or after 1 September 2024), which holds the assets, and a related SFO management company (SFO MC), which manages them. The SC says the SFO MC is exempt from licensing under the CMSA on condition that it only provides services to its related company; the SC FAQ says it is deemed a specified person under paragraph 7 of Schedule 3 of the CMSA, on which the SC may impose terms and conditions. For the tax incentive the family consults the SC and obtains conditional approval, which the SC says 'does not automatically entitle' the SFOV to the incentive, then applies at the end of each financial year for an SC certification letter to attach to its tax return; the first certification application must reach the SC by 31 December 2034. [2, 5, 6, 7, 8]

What is the minimum wealth for a family office in Malaysia (Forest City)?

No family net worth test was found; the test is on the SFOV's assets. Paragraph 3.08 of the SC Guidelines (October 2025): 'the SFOV must, at the end of each year of assessment, have an AUM of at least RM30 million', invested in the permitted assets and investments listed in Appendix I and valued at fair value (SC FAQ). For the following 10 years of assessment the SFOV must hold RM50 million (paragraph 3.15; the SC's scheme page calls it a minimum). RM30 million is about USD 7.3 million at the Bank Negara Malaysia rates of RM4.084 (buying) and RM4.088 (selling) per US dollar at 5pm on 9 October 2026, as published by Business Today (our conversion). [1, 2, 5, 9]

Compare: Family Office Minimum Net Worth by Country

Who counts as family?

'Single family' means 'a family whose members are individuals who are lineal descendants of a single ancestor' and includes the spouse, the biological child, the stepchild and a child adopted under any written law (SC Guidelines; Skrine says the Rules and the two exemption orders use the same definition). The SFOV and the SFO MC must be wholly owned, directly or indirectly, by individuals who are all members of the single family, who may be Malaysian or foreign (SC FAQ). The SFOV's funds and assets must not come from, or be owned by nationals or residents of, jurisdictions on the FATF black or grey lists. [2, 5, 10]

Can one office serve several families?

No route under the scheme: the SC FAQ says it 'is specifically designed for Single Family Offices' and that multi-family offices are not eligible for its tax incentives. The licensing exemption covers an SFO MC that serves only its related SFOV; DFDL (September 2024) notes that a single family office generally needs a fund management licence under the CMSA unless it is exempt in this way. No dedicated multi-family office licence was found. [5, 7, 11]

Which law and courts apply?

Forest City SFZ is part of Malaysia and federal law applies there: the incentive rests on Income Tax Rules gazetted on 3 October 2025 (P.U.(A) 350/2025) and on SC guidelines issued under section 377 of the Capital Markets and Services Act 2007 (CMSA), and no separate court system for the zone was found. Estates of Muslims are distributed under faraid and those of non-Muslims under the Distribution Act 1958 (Department of Director General of Lands and Mines), and Richard Wee Chambers says letters of administration are granted by the civil High Court, with Muslim beneficiaries first obtaining a faraid certificate from the Syariah Court. The Civil Law Act 1956, which governs how English common law applies, and the rules on the language of court proceedings could not be opened, so they are not described here. [1, 2, 3, 12, 13]

What substance is required?

The conditions fall on the SFOV (SC Guidelines and FAQ). Throughout: a physical, dedicated office of at least 450 square feet in Pulau 1, shared only with the SFO MC, with the registered address there for at least six months of the first year; its full-time officers must each earn a gross monthly salary of at least RM10,000, be Malaysian tax residents throughout the year and be based in Pulau 1 for at least 182 days a year, and may be foreigners. First 10 years: at least two such officers, one of them an investment professional with at least two years of experience and a degree or recognised finance qualification; at least RM500,000 a year of local operating expenditure paid to Malaysian-registered companies or local service providers based in Malaysia; and local eligible or promoted investments of RM10 million or 10% of AUM, whichever is lower, new investments in the first year (promoted investments count 1.5 times, and bank deposits do not count). Following 10 years: at least four officers, RM650,000 a year and the higher of RM10 million or 10% of AUM. The SFO MC need not be in Pulau 1, but the SC says all AUM must be managed in Malaysia, by the SFO MC or by a holder of a Capital Markets Services Licence for fund management to which it delegates. [2, 4, 5, 7]

Which holding vehicles are available?

Both the SFOV and the SFO MC must be companies incorporated under the Companies Act 2016, with no minimum paid-up capital (SC FAQ), and the SC's introduction shows the SFOV held by a family trust, a holding company or family members directly. Operating businesses, including family-owned operating companies, cannot be transferred into the SFOV, its real estate is limited to residential and commercial property in Forest City, and digital assets are among the excluded investments (SC FAQ). Labuan companies, trusts and foundations were not checked in official sources. [2, 5, 7]

What is the corporate tax rate?

Companies pay 24% on taxable income (Inland Revenue Board, Public Ruling No. 8/2025); resident micro, small and medium companies with paid-up capital of up to RM2.5 million, gross business income of up to RM50 million and no more than 20% foreign ownership pay 15% on the first RM150,000 and 17% on the next RM450,000. The SFO MC gets no incentive and pays the prevailing corporate rate, and an SFOV that fails the conditions in a year pays the prevailing rate for that year, with no extension of its incentive period (SC FAQ). [5, 14, 15]

Are there tax incentives for family offices?

A certified SFOV pays income tax at 0% on its chargeable income from holding assets and investing for the family, including buying and selling assets and trading capital market products, for an initial 10 years of assessment from its first SC certification and a further 10 years if it meets the higher conditions (P.U.(A) 350/2025; EY, KPMG and Skrine say it is deemed to have come into operation on 1 September 2024); the SC FAQ says this covers 'all sources of statutory income including capital gains' and lists foreign-sourced income at 0%, and the SC lists 'dividend income for shareholders' among the exemptions. One-off exemptions cover gains on unlisted shares in Malaysian companies disposed of to the SFOV by companies, LLPs, trust bodies or co-operatives ultimately owned by members of the same family, and stamp duty on instruments transferring permitted assets to set up the SFOV, for disposals and transfers between 1 September 2024 and 31 December 2034 made within a year of the SC's certification letter (P.U.(A) 351/2025 and 352/2025). Through the zone, eligible family offices can also obtain Bank Negara Malaysia foreign exchange flexibilities for offshore borrowing and foreign currency investment, for five years and renewable (SC). [1, 3, 4, 5, 6, 7, 10, 16]

Is there personal income tax?

Resident individuals pay 0% to 30%, with 30% on chargeable income above RM2 million (Inland Revenue Board schedule for years of assessment 2023 to 2025), and non-residents pay a flat 30% (Public Ruling No. 2/2026). From year of assessment 2025, individuals pay 2% on dividend income above RM100,000 from listed and unlisted shares in Malaysia (IRB notes to Form B 2025, citing P.U.(A) 148/2025). Foreign income received in Malaysia by resident individuals is exempt if it has been taxed in the country of origin: the IRB's notes give the period as 1 January 2022 to 31 December 2026 under the 2022 exemption orders, while PwC (Budget 2026 edition, 10 October 2025) and Bloomberg Tax (7 January 2025, citing P.U.(A) 451/2024) report it extended for individuals to 31 December 2036. PwC reports a 15% rate for up to 10 years for knowledge workers in qualifying sectors of the Johor-Singapore Special Economic Zone and says a 15% rate for knowledge workers in Forest City SFZ 'has been proposed'; the SC lists a 15% rate for returning experts and knowledge workers among Forest City incentives, but no official conditions were found. [7, 17, 18, 19, 20, 21, 22, 23, 24, 25]

Compare: Countries With No Personal Income Tax

Is there inheritance or estate tax?

PwC's tax summary (last reviewed 16 June 2026) says 'There are no inheritance, estate, or gift taxes in Malaysia' and that stamp duty is payable by the buyer or transferee on chargeable instruments. Estate duty was repealed by the Finance Act 1992 (Act 476): its Chapter VII, deemed to have come into force on 1 November 1991, repeals the Estate Duty Enactment 1941 and the Sabah and Sarawak estate duty ordinances, which still apply to persons who died before then (text of the Act as reproduced by Low & Partners; the official copy was not opened). No Inland Revenue Board or Ministry of Finance statement was found, and stamp duty on transfers to heirs was not checked. [26, 27, 28]

Reported by the sources named, not confirmed by an official source.

Compare: Inheritance Tax by Country

How do wills and succession work?

Succession depends on religion: the Department of Director General of Lands and Mines (JKPTG) says small estates of Muslims are distributed under faraid and those of non-Muslims under the Distribution Act 1958. IIUM Legal Aid Services says a Muslim may leave by will (wasiyyah) at most one third of the estate, and nothing to an heir, unless all heirs consent. Richard Wee Chambers lists the Wills Act 1959 and the Inheritance (Family Provision) Act 1971 for non-Muslim wills, which need two witnesses who are not beneficiaries. [12, 13, 29]

Can the family get residence?

The SC's visa pathway for the scheme is the Fast Track Resident Pass Talent (FT-RPT): at least three passes per family office, shared between family members and full-time foreign professionals (more case by case), for 10 years and renewable for another 10, with rights to start a business, study and work and privileges for the spouse and children under 18; children over 18, parents and parents-in-law can get a renewable one-year Social Visit Pass for up to five years (SC, 6 October 2025). The MM2H Special Economic Zone/Special Financial Zone category (Ministry of Tourism, Arts and Culture) needs a fixed deposit of USD 65,000 at age 21 to 49 or USD 32,000 at 50 and over, plus a home bought from a developer that cannot be resold for 10 years; it gives a renewable 10-year pass covering the spouse, children under 21 (unmarried, unemployed children up to 34), disabled children, parents and parents-in-law, with no work or business allowed; the MM2H overview requires 90 days a year in Malaysia, which the principal and dependants can share, at age 21 to 49 and no minimum stay at 50 and over. National MM2H tiers start at age 25: Silver USD 150,000 deposit and 5 years, Gold USD 500,000 and 15 years, Platinum USD 1 million and 20 years (homes from RM600,000, RM1 million and RM2 million); no source opened says either route leads to permanent residence. [30, 31, 32, 33]

Compare: Residency by Investment by Country

How long does set-up take?

Not found in official sources. The SC describes the steps (consultation, conditional approval, then yearly tax certification) but gives no timeline. [6]

What are the official fees?

Not found in official sources. The SC Guidelines say an application must come with 'any fees as may be imposed by the SC', but no amount was found on the SC's scheme pages, FAQ or guidelines. For residence, the Ministry of Tourism, Arts and Culture lists a one-off RM1,000 participation fee per principal applicant for the MM2H SEZ/SFZ category. [2, 6, 32]