Singapore.. the haven of the Chinese elite

In its 57 years as an independent country, Singapore has rarely made cultural headlines, but for the first time in 2018, millions of people around the world flocked to the city-state to see the set of a movie there.
The Hollywood movie “Rich Asians”, based on a novel by a Singaporean author, enchanted foreigners by giving them a fantastic view of the 733 square kilometer island, where billionaire Chinese among palaces and “five-star” hotels travel. Singapore has been described as a never-ending cocktail party, where the rich always meet and chat, and the luxury has always been there.
This insanely rich city is now getting a major new cash boost, thanks to the arrival of business leaders across the South China Sea. After years of political repression, strict restrictions during the Covid pandemic and dissatisfaction with Beijing’s global reputation, China’s rich have packed their suits and their clothes have been designed by international fashion houses. According to wealth management experts in Singapore, more and more of them have booked flights to the city-state.
Word of mouth reports that wealthy clients are flocking to Singapore’s hotels and waterfront properties, suggesting the city-state could overtake Hong Kong as Asia’s top destination for the wealthy, after Beijing’s appeal has been dented by its crackdown on the former British colony.
“Things this year have been really crazy,” said Vickna Raja, co-head of private clients at Rajah & Tan Law Firm. “Sort of a private investment firm. About a third of these requests come from China. But a few years ago, the company only received a handful of inquiries each year.”
“In times of uncertainty, there is a flow to more stable jurisdictions, and Singapore is seen as a very safe country, with a strong rule of law,” says Raja.
Another financial services specialist in Singapore said – on condition of anonymity – who was more cynical than the others, “The sanctions imposed on the Russian oligarchs because of the Ukraine war have made the wealthy Chinese fear that similar restrictions will be imposed on them become Beijing to invade Taiwan,” he added. Moving to Singapore can create a safe distance from the Chinese government.”
And the specialist continues in the explanation, saying: “The Chinese billionaires want to remain anonymous because they are Chinese, and it is similar to money laundering, but the difference is that you wash your identity.”
“Demand is growing more and more from Chinese clients looking to set up family offices,” said Joseph Boon, head of private banking at Singaporean lender DBS Lender.
“In the past, Hong Kong was the usual starting point for them from China. But now, is it really isolated from China in terms of laws and regulations? Many customers don’t see that. The presence of foreign companies in Asia has shifted to Singapore, ” added Poon.
This is not the first time that Singapore has received influxes of immigrants from China. Once a rainforest and sparsely populated with a population of one hundred, the region was later converted into a shipping port used by colonists and its population increased in the 19th century, largely thanks to the arrival of Chinese traders and workers to its shores.
Since then, the city-state has maintained close ties with China. In 2019, more than three-quarters of Singapore’s 5.3 million people were of Chinese descent, as has been the case with every prime minister of the country since independence. Singapore trades more with China than any other country.
After Singapore emerged as a low-tax trading center in the late 20th century – with colonial buildings removed to make way for elegant glass towers – many Chinese kept their money in overseas investment funds. But with their country’s economy also booming, there was relatively little interest in immigration.
“More Chinese friends and acquaintances are now settling down and they ask: How can I get permanent residence in Singapore?” says a former Singapore official.
“Beijing’s increasing talk of a shared-prosperity approach and its pursuit of entrepreneurs has infuriated those who made their fortunes in China. Today, Singapore seems much friendlier to the rich.”
“You want to see the real Chinese rich? Go for a walk around Sentosa,” the official continued, referring to the island off the southern coast of Singapore that looks like a backwater of billionaires. “It appears that there is a slight increase in the number of Bentleys,” he continues.
As one financial industry executive noted, “Chinese billionaires have always treated Singapore as a hotel, just like the Russians did in London. Now they are permanent residents” – but also asked not to be named, due to the sensitivity of the matter.
New arrivals have arrived at villas on the luxury beach island of Sentosa, despite promises by the Singapore government to more tightly regulate foreign money. But the home of Super Rich Asians is also the home of brutal inequality. Voters grumbling about the benefits of encouraging a foreign elite have put pressure on the government in one of the world’s most liberal economies to respond.
In April, Singapore marginally increased the requirements to set up family offices to qualify for income tax credits from their investments. In a move apparently designed to stop foreigners from treating Singapore as a “hotel”, officials announced that they must now invest at least 10 million Singapore dollars ($7.1 million) in Singapore, or 10 percent of their assets if the amount is less. There is another requirement to allocate funds to hire a specialist from outside the family.
A spokesperson for the Monetary Authority of Singapore said: “The changes have been introduced to strengthen the positive effects on the Singaporean economy.” But wealth managers say that hasn’t stopped Chinese clients from traveling there. Committing to spend S$10 million and hiring an unrelated person is negligible cost for families looking to set up family offices, usually worth hundreds of millions of dollars in assets. . .
But in the broader geopolitical context, Singapore is becoming more attractive.
“Parents don’t want to send their children to the West,” said one millionaire and longtime resident of Singapore, citing growing hostility toward China and racism against Chinese in the West. “You can’t go to Hong Kong. Singapore is the most China-like place you can go,” he added.
According to the former Singaporean official, “If you go to live in a Western country, you spoil the relationship between you and China. Our relationship is friendly enough with China. We are geographically close, and culturally close. You can call it a companion strategy to China. And we are that companion.”
While Singapore appears to be tightening its regulations, it has in fact taken a number of steps to attract more wealth from abroad.
The Economic Development Board, the government entity responsible for bringing in foreign business, has increased its marketing to the city-state as the “ideal destination” for family offices.
In 2021, as Beijing tightened its grip on Hong Kong’s lawyers and politics, the Economic Development Council published a report praising “Singapore’s political stability and strong rule of law”. The report also highlighted “how family businesses can look forward to access to premium healthcare, housing and education” and noted that there were around 400 family offices in Singapore by the end of 2020, double the number a year earlier.
Some customers were even given “special permission” to travel to Singapore during the height of the pandemic, when residents faced one of the world’s tightest lockdowns, says DBS’s Boone.
Asked how his Chinese clients have spent their time since arriving in the city-state, Boon insisted that their primary concern is doing business.
“I don’t think a lot of people come in and think it’s like ‘Super Rich Asians’ where they’re doing crazy things in Singapore. The only thing I see them being given in to is that a lot of them play more golf,” Boone says. . Singapore is a neutral island in the eyes of many people (…) and many Chinese are interested in expanding to other markets, because of a safe Singapore.”

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