Singapore could be the escape route for China’s richest

Singapore has become the number one choice for high-net-worth families, individuals and business families belonging to mainland China. Here's why.

Singapore is only just going back to the pre-pandemic days in terms of opening to tourists and getting back to normalcy in terms of its businesses and way of doing things. Aside from this, the country is gaining a lot of financial impetus from one vital source thanks to a host of geopolitical reasons.

Singapore, as it stands, is the number one priority and choice for high-net-worth families and individuals (HNWs and HNIs) and highly successful business families belonging to mainland China. Most of them are now turning towards Singapore for investment and permanent residency to escape possible crackdowns (political and Covid related) and unease concerning China’s escalation towards Taiwan and the US.

China’s rich are also wary of how large players like Alibaba have been treated recently, and there are growing concerns when communist ideas like common prosperity are mentioned by its political establishment. This has been one of the reasons why many government agencies have gone after business empires like Alibaba and other upcoming entrepreneurs in recent times.

READ | Setback for Putin as Ukraine retakes northeast in lightning blitz, Russian troops in retreat

Recently, Singapore increased the minimum investment requirement for family offices to qualify for tax exemptions on the income from their investments. This was widely viewed as a measure to reduce the number of foreigners using Singapore as a tax haven. Singapore officials announced that investors must now shell out a minimum of S$10mn (US $7.1mn) locally in Singapore, or something amounting to 10 per cent of their assets (whichever is lower). Earlier, it was only S$5mn. This was primarily to limit the number of Chinese conglomerates and large billionaire families from using Singapore as their safety net.

India Today spoke to numerous private wealth managers and wealth management firms in Singapore, who have seen an increasing number of requests from Chinese investors and businesses to move their assets to the city-state via the family office structure. A family office structure refers to the setting up of a private entity in Singapore which can handle investment and wealth management for the family investing in this.

ALSO READ | Canadian wildfires spark evacuations, air quality warnings in British Columbia