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In its 57 years as an independent country, Singapore has rarely made cultural headlines. But, in 2018, for the first time, millions around the world flocked to see a film set in the city-state.
Crazy Rich Asians, a Hollywood production based on a novel by a Singaporean, enchanted foreigners with a fantasy vision of the 733 sq km island, in which ethnic Chinese billionaires flitted between mansions and five-star hotels. Singapore was portrayed as a cocktail party that never ended, where the rich would perpetually rub shoulders with each other, and luxury was always within reach.
Now this already crazily rich city is receiving a big new dose of money — thanks to a fresh influx of tycoons from across the South China Sea. After enduring years of political crackdowns, severe Covid lockdowns, and unease about Beijing’s global reputation, many of China’s wealthiest have been packing their suits and designer dresses. And, according to wealth management professionals in Singapore, an increasing number are booking plane tickets to the city-state.
Anecdotal reports indicate that well-heeled clients have been arriving in droves at Singapore’s hotels and seaside estates — which suggests the city-state could overtake Hong Kong as the premier destination for Asia’s rich, after Beijing’s clampdown on the former British colony tarnished its allure.
“It has been really crazy this year,” says Vikna Rajah, co-head of the private client business at law firm Rajah & Tann. He says his team in Singapore is handling one enquiry every week from multimillionaires keen to establish a family office — a type of private investment firm. About a third of those approaches come from China. A few years ago, the firm would receive only “a handful” of enquiries every year.
“In times of uncertainty, there is always a flood to more stable jurisdictions,” Rajah says. “Singapore is seen as extremely safe, [with a] strong rule of law.”
Another financial services professional in Singapore, speaking on condition of anonymity, was more cynical: the sanctions imposed on Russian oligarchs over the Ukraine war have made wealthy Chinese fear similar restrictions if Beijing pursues an invasion of Taiwan. Moving to Singapore could create some useful distance from the Chinese government, the person argues.
Chinese billionaires want “to stop being identified as a Chinese person,” the professional explains. “It is like money laundering. Except you are laundering your own identity”.
Joseph Poon, head of private banking at Singapore lender DBS, also says demand “is getting stronger and stronger” from Chinese clients looking to establish family offices.
“In the past, Hong Kong has been their traditional out-of-China stepping stone. [But now], is it really separate from China in terms of laws and regulations? A lot of clients don’t see it to be the case”. He says: “The real offshore in Asia has defaulted to Singapore.”
It is not the first time that Singapore has welcomed an influx of émigrés from China. Once a sparsely populated rainforest with barely a hundred residents, the territory became a colonial shipping port that ballooned in population in the 19th century, largely thanks to Chinese merchants and workers arriving on its shores.
The city-state has maintained close links with China since then. In 2019, more than three quarters of Singapore’s 5.3mn residents were ethnically Chinese, as has been every prime minister since independence. Singapore trades more with China than any other country.
After Singapore emerged as a low-tax business centre in the late 20th century — with colonial buildings razed to make way for sleek glass towers — many Chinese have shielded money there in offshore funds. But, with the economy also booming at home, relatively few were interested in emigrating.
Now, says one former Singapore official, “more and more Chinese friends and acquaintances are settling in and asking: how do I get permanent residence in Singapore?”
Beijing’s increasing talk of “common prosperity” and “going after the entrepreneurs” has unnerved those who made their fortunes in China, they add. Today, Singapore appears far more friendly to the rich.
“You want to see the real rich [Chinese]? You go and walk around Sentosa,” the official says, referring to the island off Singapore’s south coast that serves as a billionaire enclave. “There seems to be an uptick in Bentleys.”
One finance industry executive observed that “[Chinese billionaires] have always treated Singapore like a hotel, just like the Russians in London” — but also asked not to be named because of the sensitivity of the matter. “Now, they are looking to become permanent residents.”
New arrivals at Sentosa’s luxury beachside villas have come despite promises by the Singapore government to regulate foreign money more tightly. The home of Crazy Rich Asians is also home to acute inequality. Rumblings among voters about the benefits of enticing elite foreigners have pressured the government in one of the world’s most liberal economies to respond.
In April, Singapore marginally raised the bar for family offices to qualify for tax exemptions on the income from their investments. In a move seemingly designed to stop foreigners treating Singapore “like a hotel”, officials announced that they must now invest at least S$10mn ($7.1mn) locally in Singapore, or 10 per cent of their assets if this is lower. Certain funds would also be required to employ a professional from outside the family.
The changes were introduced to “enhance the positive spillovers to the Singapore economy”, an MAS spokesperson said. But wealth managers say this has not deterred Chinese clients from flying in. Committing to spending S$10mn and hiring one non-relative are negligible costs to the dynasties behind family offices, whose assets typically run into hundreds of millions of dollars.
In the broader geopolitical context, Singapore is only becoming more attractive.
Parents “don’t want to send their kids to the west”, says one multi-millionaire and long-term Singapore resident, pointing to growing hostility towards China and racism against Chinese people in the west. “You cannot go to Hong Kong. Singapore is the most Chinese place you can go to.”
According to the ex-Singapore official, “If you go and live in a western country, you are really burning bridges with China. We are friendly enough with China. We are geographically close, we are culturally close. You can call it a ‘China plus one’ strategy. And we are the plus one.”
And, while appearing to tighten regulation, Singapore is in fact taking a number of steps to snatch more wealth from abroad.
Its Economic Development Board, the government entity responsible for courting foreign business, has upped its marketing of the city-state as the “ideal destination” for family offices.
In 2021, as Beijing was tightening its grip on Hong Kong’s lawyers and politics, the EDB published a report extolling “Singapore’s political stability and strong rule of law”. It also highlighted how “family businesses can look forward to quality healthcare, housing and education”. By the end of 2020, there were some 400 family offices in Singapore, it noted — double the number a year earlier.
Some clients were even granted “special permission” to fly into Singapore during the height of the pandemic, when residents faced one of the world’s strictest lockdowns, says Poon of DBS.
Asked how his Chinese clients have spent their time since touching down in the city-state, he insists their primary interest is doing business.
“I don’t think many come and think of this as Crazy Rich Asians, do crazy things in Singapore. The only indulgence I see is a lot of them playing a lot more golf,” Poon says.
“Singapore remains an island of neutrality in many people’s eyes . . . Many, many Chinese are interested in expanding into [other markets], from the safety and the lighthouse that is Singapore.”
This article is part of FT Wealth, a section providing in-depth coverage of philanthropy, entrepreneurs, family offices, as well as alternative and impact investment
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