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China’s wealthy moving money to Singapore amid common prosperity push

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Singapore is a haven for many of the richest tycoons in the region, as Beijing pushes for common prosperity and Hong Kong’s political crisis.

Wei Leng Tay | Bloomberg | Getty Images

Many wealthy Chinese see Singapore as safe and secure and are more worried about keeping their wealth on the Chinese mainland.

Since protests disrupted Hong Kong’s economy in 2019,The wealthy Chinese look for alternatives to their traditional wealth storage locations. Singapore’s large Mandarin Chinese-speaking population and lack of wealth taxes made it attractive. 

Last year’s trend was evidently more positive Beijing’s sudden crackdown on the education industry and emphasis on “common prosperity” — moderate wealth for all, rather than just a few. 

CNBC interviewed firms in Singapore to find out how they are helping wealthy Chinese to move assets to Singapore via their family offices.

Family offices are privately owned companies that manage wealth and investment for wealthy families. In Singapore, establishing a family office requires assets of at least $5,000,000.

Jenga has seen inquiries to set up a Singaporean family office double in the last year, says Iris Xu (founder), a five-year old accounting and corporate service firm. She stated that most of the inquiries came from China, or people who are emigrating from China. 

[Wealthy Chinese]They believe that there are many opportunities in China to make fortunes, but aren’t sure if it would be safe to invest their money.

About 50 of her clients have opened family offices in Singapore — each with at least $10 million in assets, Xu said. 

China’s economic boom has created hundreds of billionaires over the past few decades. In the last year alone, hundreds more were added to their ranks. according to Forbes.

According to data, this brought China’s total billionaires to 626. This is second to America’s 724 billionaires.

But mainland China’s tight capital controls — an official limit of $50,000 in overseas foreign exchange a year — limit these billionaires’ options for investment and keeping their wealth secure.

According to a CNBC transcription of the Mandarin interview, Xu stated that her Chinese clients believe there are many opportunities to make a fortune and they don’t know if it is safe to put their money there. 

Worries about ‘Common Prosperity’

Ryan Lin from Bayfront Law, Singapore said that new family office work comes disproportionately to Chinese clients. He also serves clients in India, Indonesia, and other parts of Europe.

Lin claimed that while capital controls may mean Chinese clients open family offices with less capital, Lin believes most revenue-generating companies are located outside of China. 

A family office to help you immigrate

Singapore’s Family Office Boom

Family offices have been used by many billionaires around the world to manage their wealth. Singapore is also attractive because of its proximity to Asia’s other investment opportunities.

According to Bloomberg, Bridgewater founder Ray Dalio, and Google cofounder Sergey Brin, have established family offices in Singapore since late 2020 to benefit from the friendly tax policy.

It can last how long?

Chinese nationals who wish to establish family offices in Singapore have been affected by the ongoing conflict between Russia and Ukraine.

China stated that sanctions are not acceptable. China has repeatedly denied calling Russia’s invasion of Ukraine an invasion. blames the U.S. for the conflict.

Contrary to China’s efforts to maintain a neutral view of the conflict, Singapore joined the U.S. and the EU in imposing sanctions on RussiaThis month was reportedly the first time that local banks were frozen by Russian sanctioned entities and individuals. 

Xu from Jenga said that some Chinese clients were given pause by the news about the asset freeze.

CNBC Pro has more information about China

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