28/09/2022, 09:11 Crazy rich relocations: Singapore becomes a haven for Chinese elite | Financial Times

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Special Report FT Wealth: September 2022

FT Wealth Private wealth

Crazy rich relocations: Singapore becomes a haven for Chinese elite

Beijing’s talk of ‘going after the entrepreneurs’, its draconian Covid lockdowns and a growing hostility to
China from the west all make the city-state an attractive place to reside

Oliver Telling in Singapore AUGUST 31 2022

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.

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A scene from the 2018 film ‘Crazy Rich Asians’ © Sanja Bucko/Warner Bros/Kobal/Shutterstock

“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.

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“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.”

Joseph Poon, head of private banking at Singapore lender DBS

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.

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Now, says one former Singapore official,

“more and more Chinese friends and
In the past, Hong Kong acquaintances are settling in and asking:
has been their how do I get permanent residence in
traditional out-of-China Singapore?”
stepping stone . . . But
Beijing’s increasing talk of “common
the real offshore in Asia
prosperity” and “going after the
has defaulted to
entrepreneurs” has unnerved those who
Singapore made their fortunes in China, they add.
Joseph Poon, head of private banking at Today, Singapore appears far more friendly
Singapore lender DBS
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.

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The facade of the Orchard shopping centre in Singapore was designed with cutting-edge technology © Tristan
Tan/Shutterstock

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.

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We are friendly enough Its Economic Development Board, the

with China, we are government entity responsible for courting
foreign business, has upped its marketing
geographically and
of the city-state as the “ideal destination”
culturally close. You can
for family offices.
call it a ‘China plus one’
strategy In 2021, as Beijing was tightening its grip
on Hong Kong’s lawyers and politics, the
A former official in Singapore
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

Copyright The Financial Times Limited 2022. All rights reserved.

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