Why Hong Kong’s High Net Worth Individuals are Shifting their Wealth to Singapore
Traditionally, Singapore and Hong Kong, the leading financial hubs in Asia, have been the favoured locations for asset and wealth management. Hong Kong’s geographical proximity to mainland China has made it the preferred destination for offshore Chinese wealth. However, recent developments in Hong Kong have created broader instability, which has caused HNWI and wealthy families to gravitate to Singapore.
While Hong Kong remains a gateway to China and continues to be an important financial and wealth management centre, wealthy families will seek to diversify their risks and spread their wealth to other locations, Singapore being the main one.
Against the backdrop of ongoing uncertainties and the continuous growth of affluence in the region, Singapore’s reputation as the choice location for asset and wealth management for the HNWIs and wealthy families is expected to rise further.
There are several key attributes that underpin Singapore’s attraction as a key Asian centre for the rich and wealthy. At the macroeconomic level, Singapore has a stable political environment with a strong rule of law. This is a strong selling point as it instills confidence among the rich and wealthy – especially Chinese investors – that Singapore is a safe haven to park their wealth and assets. Its comprehensive network of double tax agreements and free trade agreements has contributed to its business-friendly environment.
Singapore Government Policies on Wealth Management Industries
The Singapore government has introduced policies to ensure the financial and asset management sector is well regulated and transparent. Its central bank, the Monetary Authority of Singapore (MAS), has been instrumental in constantly introducing new initiatives, as well as fine tuning existing schemes, to promote the asset and wealth management industries. For example, the Variable Capital Company was recently introduced to provide greater flexibility to asset managers to establish investment fund structures in Singapore that are found in traditional fund locations such as Cayman Islands, Luxembourg and Dublin.
Read more about setting up a family office in Singapore at InCorp Global website.
