For mainland Chinese affluent families and individuals, as well as business families, Singapore has quickly risen as the top destination on the list.
Concerning welcoming visitors and returning to normal regarding its companies and way of life, Singapore is returning to the pre-pandemic era. In addition, several geopolitical factors have caused the country to receive significant financial support from a single important source.
Singapore is currently their top priority and preferred destination for high net worth families and individuals (HNWs and HNIs) and very successful business families from mainland China. Most of them are now looking to Singapore for investment and permanent residency to avoid potential crackdowns (political and COVID-related) and their discomfort over China’s escalation of its relations with Taiwan and the US.
Rich people in China are especially cautious of the recent treatment of major companies like Alibaba. There are growing worries when communist concepts like common prosperity are invoked by the political elite. This is one of the aspects that numerous government organizations have targeted commercial behemoths like Alibaba and other upcoming entrepreneurs.
For the wealthy of mainland China, Singapore has become a choice for both investment and permanent residence.
Singapore recently increased the minimum cash needed for household businesses to be eligible for tax breaks on investment gains. It was widely believed that this was a move to reduce the number of foreigners who used Singapore as a tax haven. Officials in Singapore said buyers must henceforth invest a minimum of USD 10 million (USD 7.1 million), or 10% of the value of their home, locally in Singapore (whichever is less). It was only USD 5 million previously. This was principally done to stop several Chinese corporations and huge, wealthy households from using Singapore as their secure internet.
A media publishing company spoke with several private wealth managers and wealth management companies in Singapore who have noticed increased requests from Chinese investors and enterprises to transfer their assets to the city-state via the family office structure. Establishing a private company in Singapore that can manage investments and the family’s wealth is referred to as a “family office structure.”
According to reports, Singapore’s family office numbers grew between 2019 and 2020, and there are already 400 family offices. Following the pandemic, this is predicted to get worse.
Why the increasing popularity of Singapore among the Chinese affluents?
Mano Chugani believes that “the solid financial framework of Singapore” has always been an alluring proposition for foreigners. Mano Chugani is a wealth management professional who has earned the trust of foreign investors for nearly two decades.
China is also Singapore’s top trading partner in the current situation. He said that Singapore is a logical alternative for Chinese HNW players because China’s hold over Hongkong is becoming tighter, and China is pursuing its corporate leaders inside China.
China recently decided to tax its upper middle class by imposing an outrageous tax of 45% on year-end bonuses. The end of 2023 will see the implementation of this.
The Chinese ethnic group makes up three-fourths of the population of Singapore. Although the typical Chinese Singaporean would not consider themselves similar to the Chinese people on the Mainland, the shared ethnicity is significant to investors headquartered in China.
Jeremy Chong, another wealth manager in Singapore, believes that racism-related incidents and the rising hostility toward China and its policies have rendered the USA, the EU, and other western nations insufficiently hospitable. The Russian invasion of Ukraine demonstrated the impact of sanctions the US and the EU imposed on Russian businesses and investors. This is a crucial factor in why Chinese billionaires do not want dangers associated with their endeavors abroad. Singapore is a lot safer country to invest in these regards.
The wealthy in China have considered Singapore a potential second residence on numerous occasions. Numerous wealthy Chinese families have been going to Singapore for years to enjoy the city’s various attractions, including the casinos and shopping.
The Mothership reported on numerous recent real estate transactions involving Singaporean permanent citizens. A complete level at the renowned commercial building Suntec City was purchased by a Singaporean PR earlier this year. Similarly, a few other Chinese families purchased sizable apartment blocks in Singapore, each containing 20 apartments.
Given that Singapore is well-known as a low-tax business hub, that there are many places for the wealthy to stay and enjoy, that there are many places to visit within a few hours of the country, and that English is the common educational language, it is an ideal location for Chinese HNIs to live and invest.