SINGAPORE: While Singapore was called a playground for the ultra-rich from China in the UK’s Telegraph just a few short years ago, that time appears to be coming to an end, based on a new report from CNBC.
According to the report, published on Thursday (Sep 11), the reputation of the city-state as a safe haven for well-heeled Chinese families may be dimming, in large part due to stricter regulations in Singapore in the wake of the S$3 billion money-laundering scandal in 2023, the biggest ever in Singapore’s history.
In the past six years, more and more wealthy Chinese have set up family offices in Singapore for a number of reasons. Many chose Singapore over Hong Kong in the wake of the massive protests in 2019. COVID-19 shutdowns in China were also a factor, as was Beijing’s thrust toward “common prosperity” aimed at creating moderate wealth for many instead of just a few.
Meanwhile, Singapore’s political stability, judicial independence, and other factors made it attractive to ultra-high net worth individuals.
In 2022, an estimated 10,000 high-net-worth individuals looked to pull US$48 billion (S$66 billion) out of China, industry experts told Bloomberg.
“Significant money is flowing into Singapore” from China, Bloomberg quoted Cheah Cheng Hye, co-founder of Value Partners Group, as saying at the time, adding that many others were looking into establishing family offices.
A family office is a private wealth management advisory firm that caters to ultra-high-net-worth individuals — people who have S$1 million or more in liquid financial assets. Such firms manage the investments and finances of well-heeled individuals or families and offer consultancy services on varied aspects of finance, including taxes, insurance, donations, and wealth transfer.
Has the tide turned?
With tighter regulations after the 2023 money laundering scandal, wealthy Chinese started leaving Singapore in favour of Hong Kong, the Middle East, Japan, CNBC quoted Ryan Lin, a director at Bayfront Law in Singapore, as saying.
He added that in comparison to 2022, arguably the heyday of the exodus of ultra-rich Chinese to Singapore, the applications to set up family offices or live in Singapore are down by 50 per cent.
Mr Lin pointed out that those who deal in cryptocurrency are particularly affected, given that the city-state’s central bank, the Monetary Authority of Singapore, is introducing licensing regulations saying that platforms that offer crypto-related products to customers overseas need to be regulated.
He said, “So as the regulations become stricter, these Chinese just say: forget it. My patience is gone.” /TISG
