Why Many Affluent Chinese Are Looking To Emigrate To Singapore?

SINGAPORE – There’s a new wave of wealthy Chinese moving to the city-state from mainland China and Hong Kong, and they are taking their money with them, reported The South China Morning Post (SCMP) on Thursday morning (15 December, SGT).

“A sluggish domestic market (in China), escalating lockdowns against COVID-19, depreciating properties and the (weak) yuan are all eating away at our wealth, as well as tighter tax scrutiny ahead. The point is, we don’t know how long this will last,” said Kristine Zhang, whose family has finally decided to relocate to Singapore permanently.

Since 2015, Zhang has spent a few months of each year in the city-state, where her son is studying, while her spouse – a former executive at an overseas firm – has been overseeing his car painting business in Guangdong. Her husband had been hesitant to relocate to Singapore, but recently changed his mind.

The family intends to dispose 3 properties in China that are valued at about US$2.1 million by 2023, and then move to Singapore, where they plan to start a business and become permanent residents.

Singapore is very attractive to immigrants from mainland China and Hong Kong due to several factors. First, the biggest ethnic group in the city-state are the Chinese and Mandarin is widely spoken. Apart from being safe and a low tax jurisdiction, the country is just a short flight from China. In addition, Singapore has maintained close ties with Beijing, while remaining neutral as tensions between China and the United States escalate.

According to the Henley Global Citizens Report published in June, Singapore is one of the top five destinations for high-net-worth individuals (HNWIs) looking to emigrate. China and Hong Kong are also among the top 5 with the largest net outflows of wealthy people.

In Asia, the report revealed that Singapore is enticing to millionaires on the move with net migration of 2,800 HNWIs expected this year, which translates to an 87 percent jump from 2019’s figure.

Affluent Chinese deem the city-state as a safe haven to store financial assets. Besides being welcoming, the country also offers better freedom and a pro-business environment.

However, the growing appeal of Singapore could negatively impact China and its territory, Hong Kong, in the future, with Henley & Partners estimating that 3,000 and 10,000 HNWIs have left Hong Kong and mainland China.

Moreover, there has been a significant increase in investment migration enquiries and applications. By the end of Q2 2022, over 66 percent of the online enquiries received by Henley & Partners from East Asia consisted of Chinese nationals, and their enquiries surged by 134 percent quarter-on-quarter during the said period.

Joylin Su, an Executive at an asset-management company usually catering to affluent families, revealed that the most notable immigrants to Singapore are wealthy businessmen who are establishing family offices in the city.

Based on data from Singapore’s central bank, 2021 saw the opening of over 700 family offices compared to merely 50 in 2018. Assets under management also increased from S$4.7 trillion in 2021 to S$5.4 trillion this year.

During the first four months of 2022, there were more than 100 applications to establish single-family offices here. And over 600 applications are awaiting approval, with each fund valued at least S$20 million. Of the 600, more than half of these are from affluent Chinese families, including those who have parked their wealth in Hong Kong in the last few years, noted Su.

“It used to take about four months but now it takes up to 18 months to set up a family office in Singapore.”

“Singapore has maintained a good balance between East and West, which makes it outstanding among the list of destinations for wealthy families to move from the mainland. Its clear tax system also makes the rich from across the world feel safe for wealth management,” added Su.