In its 57 years as an independent country, Singapore has rarely made headlines in cultural newspapers. But, in 2018, for the first time, millions of people from around the world flocked to see a movie filmed in the city-state.
Crazy Rich Asians, a Hollywood production based on a novel by a Singaporean, enchanted foreigners with a fantastic view of the 733 km2 island, where ethnic Chinese billionaires spun between mansions and five-star hotels. Singapore is presented as an endless cocktail, where the rich rub shoulders and luxury is at your fingertips at all times.
Now, this already crazy city is getting another big dose of cash, thanks to a new influx of tycoons on the other side of the South China Sea. After enduring years of political repression, severe Covid lockdowns, and unease over Beijing’s global reputation, many of China’s richest have packed their designer suits and dresses. And, according to wealth control professionals in Singapore, more and more of them are booking plane tickets to the city-state.
Anecdotal reports imply that affluent visitors are flocking to Singapore’s hotels and beach spaces, suggesting the city-state could overtake Hong Kong as Asia’s most sensible destination for the wealthy, after Beijing’s crackdown on the former British colony tarnished its appeal.
“It’s been crazy this year,” says Vikna Rajah, co-head of personal consumption at the Rajah law firm.
“In times of uncertainty, there is a flood of stronger jurisdictions,” Rajah says. “Singapore is considered to be incredibly safe, [with] a strong rule of law. “
Another monetary facility professional in Singapore, who spoke on condition of anonymity, was more cynical: Sanctions imposed on Russian oligarchs during the war in Ukraine have made wealthy Chinese worry about similar restrictions if Beijing pursues an invasion of Taiwan. Moving to Singapore can create a useful distance from the Chinese government, says the user.
Chinese billionaires need to “stop being known as Chinese people,” he says. “It’s like cash laundering. Except to whitewash their own identity. “
Joseph Poon, head of personal banking at Singaporean lender DBS, also said Chinese consumers are looking to “strengthen” themselves to establish a circle of family offices.
“In the past, Hong Kong was their classic springboard out of China. [But now], is it separate from China in terms of legislation and regulations?Many consumers don’t see this as the case. ” He says: “The real offshore in Asia has been by default in Singapore. “
This is not the first time that Singapore has received an influx of migrants from China. Once a sparsely populated rain forest with a few hundred inhabitants, the territory has a colonial seaport whose population soared in the 19th century, thanks in large part to Chinese merchants and personnel arriving on 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 were all prime ministers since independence. Singapore trades more with China than with any other country. .
After Singapore became a low-tax business hub in the late twentieth century, with colonial buildings demolished to make way for sublime glass towers, many Chinese take advantage of the extraterritorial budget there. But, with the country’s booming economy, relatively few were interested in emigrating.
In the past, Hong Kong was your classic springboard out of China. . . But the real offshore in Asia has disappeared in Singapore.
Now, says a former Singapore official, “more and more Chinese friends and acquaintances are settling in and asking: how can I get permanent residency in Singapore?”
Beijing’s ongoing discussions about “common prosperity” and the “pursuit of entrepreneurs” have baffled those who have made their fortunes in China, they add. Today, Singapore seems much more welcoming to the rich.
“Do you need to see the genuine [Chinese]? You’re going to walk through Sentosa,” the official said, referring to the island off Singapore’s southern coast that serves as a multibillion-dollar enclave. “It turns out there’s a slight build on Bentley. “
A monetary industry executive noted that “[Chinese billionaires] have treated Singapore like a hotel, just like the Russians in London,” but also asked not to be identified because of the delicacy of the issue. “Now they are looking to become permanent residents. “
Newcomers to Sentosa’s luxury waterfront villas have come despite promises from the Singapore government to increase foreign money. The homeland of the Crazy Rich Asians is also home to great inequality. of one of the world’s top liberal economies to react.
In April, Singapore raised the bar slightly for family circle offices to take advantage of tax breaks on their investment income. In a move aimed at preventing foreigners from treating Singapore “like a hotel,” officials said they will now have to invest at least S$10 million ($7. 1 million) locally in Singapore, or 10 percent of their assets if that amount is less. It would also require some budget to hire a professional outside of the family circle.
The adjustments were made to “enhance the positive spillover effects on Singapore’s economy,” a MAS spokesman said. But wealth managers say it hasn’t deterred Chinese customers from flying. Committing to spend S$10 million and hiring a person other than the parent is an insignificant charge. for the circle of dynasties of family offices, whose assets usually amount to billions of dollars.
In the broader geopolitical context, Singapore is more attractive.
Parents “don’t need to send their children west,” says a longtime Singapore resident billionaire, noting the development of hostility toward China and racism against Chinese in the west. “You can’t move to Hong Kong. Singapore is the maximum. “Chinese position you can pass.
According to the former Singapore official, “If you’re going to live in a Western country, you’re cutting ties with China. We are quite close to China. We are close geographically, we are close culturally. You can call this a “China Plus One” Strategy. And we are the maximum.
And, while it appears to tighten regulations, Singapore is taking a series of steps to seize more wealth from abroad.
We are friends of China, we are close geographically and culturally. You can call this a “China plus one” strategy.
Its Economic Development Council, the government entity tasked with courting foreign companies, has stepped up its marketing of the city-state as an “ideal destination” for family offices.
In 2021, when Beijing tightened its grip on Hong Kong lawyers and politics, the EDB published a report promoting “Singapore’s political stability and a strong rule of law. “He also highlighted how “family circle businesses can expect health care, housing and education. “At the end of 2020, there were about 400 family offices in Singapore, he said, twice as many as the previous year.
Some consumers even received “special permission” to travel to Singapore at the height of the pandemic, when citizens faced one of the strictest lockdowns in the world, dbs Poon says.
When asked how his Chinese have spent their time since landing in the city-state, he insists that his greatest interest is doing business.
“I don’t think many will come and think of this as rich, crazy Asians doing crazy things in Singapore. The only indulgence I see is that a lot of them play a lot more golf,” Poon says.
“Singapore remains an island of neutrality in the eyes of many people. . . Many, many Chinese are interested in expanding into [other markets], from security and the beacon that is Singapore.
This article is part of FT Wealth, a segment that provides detailed information on philanthropy, entrepreneurs, family offices, as well as choice and impact on investment.