Wealthy Chinese Move Their Funds To Singapore

SINGAPORE – A growing number of affluent people are worried about keeping their money in mainland China, so they are moving some of their capital to Singapore, which they consider as a safe haven, reported CNBC on Wednesday afternoon (30 March, SGT).

After public demonstrations negatively impacted Hong Kong’s economy, wealthy Chinese have searched for alternative places to park their wealth. Singapore proved enticing thanks to its large Mandarin Chinese-speaking community and absence of a wealth tax.

This trend appeared to have become more evident after the Chinese government’s surprise clampdown on the tutoring sector and the tech industry, as well as a shift towards “common prosperity”.

This was revealed by CNBC’s interviews with Singapore companies that are helping affluent Chinese move their assets to Singapore via the family office way.

Notably, a family office is a privately-owned firm that oversees the investment and wealth management for a rich clan. In Singapore, establishing a family office usually requires at least US$5 million in assets.

In the past 12 months, enquiries regarding setting up a family office in the city-state have doubled at Jenga, a 5-year-old company that provides accounting and corporate services, said its Founder Iris Xu. She disclosed the majority of enquiries come from people in China or emigrants from there.

Roughly 50 of her customers have established family offices in Singapore, each with $10 million in minimum assets.

Xu revealed that her Chinese clients “believe there are plenty of opportunities to make a fortune in China, but they are not sure whether it is safe for them to park money there.”

Other Chinese customers had already moved assets to Hong Kong, before transferring them to Singapore, added Ryan Lin, a Director at Bayfront Law, a Singapore-based firm which helps people establish family offices.

“This kind of trend has started since the 2019 riots in Hong Kong when many Chinese had a second thought about asset safety.” The trend gained momentum last year following the crackdown on the education sector and Chinese President Xi Jinping’s goal of common prosperity.

In 2020, there were about 400 family offices in Singapore, according to Singapore’s Economic Development Board (EDB). While the government has not updated the number since the end of 2021, local companies assisting with family office creations here estimate there could be hundreds more at present.