As Beijing pushes for “shared prosperity” and political turmoil threatens Hong Kong, Singapore has become a safe haven for some of the region’s top businessmen and their families.
Wei Ling Tai | Bloomberg | Getty Images
More and more wealthy Chinese are concerned about keeping their money on the mainland, and some see Singapore as a safe haven.
where Protests disrupted Hong Kong’s economy in 2019, Wealthy Chinese searched for alternative places to store their wealth. Singapore has proven attractive due to its large community that speaks Mandarin Chinese and, unlike many countries, it does not have a wealth tax.
The trend seemed to pick up last year after that Beijing’s sudden suppression of the education industry And the emphasis on “common prosperity” – moderate wealth for all, not just a few.
That’s according to CNBC’s interviews with companies in Singapore that help wealthy Chinese move their assets into the city-state via the family office structure.
The Family Office is a privately owned business that handles the investment and wealth management of a wealthy family. In Singapore, setting up a family office usually requires assets of at least $5 million.
Over the past 12 months, inquiries about setting up a family office in Singapore at Jenga, a five-year-old corporate and accounting services firm, have doubled, according to founder Iris Xu. She said the majority of inquiries come from people in China or immigrants from the country.
Shaw said about 50 of her clients have opened family offices in Singapore — each with at least $10 million in assets.
China’s rapid economic growth has poured hundreds of billionaires into just a few decades. Many have joined their ranks in the past year, According to Forbes magazine.
The data showed that the total number of billionaires in China reached 626, second only to the United States’ 724 billionaires.
Xu said her Chinese clients “believe there are plenty of opportunities to make a fortune in China, but aren’t sure if it’s safe for them to stop the money there,” according to CNBC’s translation of the interview in Mandarin.
Ryan Lin, director at Bayfront Law in Singapore, said new work related to the family office is coming disproportionately from Chinese clients. His company also has clients from India, Indonesia, and parts of Europe.
Although capital controls mean that many Chinese clients open family offices with small amounts of capital, Lin said most of the income-producing businesses are outside the mainland.
Xu said Covid-related restrictions on international travel have also precipitated interest from wealthy Chinese people in setting up family offices in Singapore. The country has a Global Investor Program that allows adults who invest at least 2.5 million Singapore dollars ($1.8 million) to apply for permanent residence.
Since the epidemic began, some Chinese citizens have found that the Chinese government can suspend the issuance of passports and renew its services based on the control of the virus.
Reply to online Question in August about passport suspension, China’s National Immigration Administration said it will issue such documents only to those who have essential or emergency reasons to leave the country.
Many billionaires around the world have used family offices to manage their fortunes. Another part of Singapore’s allure is that its location gives investors proximity to other investment opportunities in Asia.
Since late 2020, Bridgewater founder Ray Dalio and Google co-founder Sergey Brin have opened family offices in Singapore to take advantage of its friendly tax policy, Bloomberg reports.
The ongoing war between Russia and Ukraine has brought uncertainty to Chinese citizens who want to open family offices in Singapore.
China has said it opposes sanctions. Beijing has also refused to describe Russia’s attack on Ukraine as an invasion, and state media has often rejected it He blames the United States for the conflict.
Contrary to China’s attempt to take a neutral stance on the war, Singapore has joined the United States and the European Union in imposing sanctions on Russia Earlier this month, domestic bank accounts held by sanctioned Russian individuals and entities were reported to have been frozen.
Jenga’s Xu said news of the asset freeze has caused some potential Chinese clients to pause their plans to open a family office in Singapore.
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