But growing interest in Singapore could spell bad news for the world’s No. 2 economy. Wealth emigration is beginning to take a toll, with 10,000 wealthy Chinese packing up and leaving the mainland this year and 3,000 leaving Hong Kong, Henley & Partners estimated.
There has also been a sharp uptick in investment migration enquiries and applications.
By the end of the second quarter, more than 66 per cent of web enquiries from East Asia to Henley & Partners were from Chinese nationals, and Chinese enquiries increased by 134 per cent in the second quarter from the previous three months.
The most eye-catching Chinese immigrants to Singapore are wealthy entrepreneurs, who are setting up family offices in the city, said Joylin Su, an executive at an asset-management firm typically serving rich families.
More than 700 family offices were established in Singapore in 2021, and the figure was just 50 in 2018, according to the Monetary Authority of Singapore (MAS).
A family office typically refers to a legal entity that carries out the administration and management of assets and investments of ultra-high-net-worth individuals or families for the purposes of capital preservation, succession planning, and managing investments.
MAS approved more than 100 applications to set up single-family offices in the first four months of the year. Assets under management in Singapore grew from S$4.7 trillion last year to S$5.4 trillion this year, according to MAS.
And more than 600 applications are awaiting approval, Su added, with each fund worth at least S$20 million yuan.
Over half of these are from rich Chinese families, including those who have stored their wealth in Hong Kong over the past few years, she said.
“It used to take about four months but now it takes up to 18 months to set up a family office in Singapore,” Su said, adding that applications have surged from previous years.
“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.”
However, the surge in wealthy immigrants and talent may raise discussions domestically about taxation, including on property or inheritance, said Su, especially as the cost of living is soaring.
Savvy investors are rushing to exploit business opportunities serving the new arrivals.
A large number of professionals with experience working for fund management companies in China are moving to Singapore, Su said.
Private money transfer services in Singapore, like Zhongguo Remittance, are offering better exchange rates than banks’ official rates, showing strong demand for local currency among Chinese newcomers.
VIP clubs catering to Chinese are also mushrooming across Singapore, which is already home to scores of swanky wine bars and cocktail lounges charging top dollar.
“A newly established club required each member to pay S$50,000 for expensive wine and cigars as a threshold, and 50 seats were snapped up on the opening day,” Su said.
“Locals in Singapore drink whiskey and wine, but the demand for Mao-tai in these clubs and fine restaurants has risen sharply to quench the nostalgia of these wealthy Chinese.”
Singapore’s total population, which includes non-residents, grew 3.4 per cent year on year to 5.64 million in 2022, according to official figures.
The number of Singaporean citizens rose 1.6 per cent to 3.55 million while the non-resident population, including workers and students, climbed 6.6 per cent to 1.56 million, according to the Department of Statistics.
Singapore’s status as an international tech hub – especially for the rapidly growing Southeast Asia market – has long made it appealing to workers in the fintech and IT industries.
Most Chinese students studying at Singapore universities are looking to stay, drawn by the stable political environment, competitive salaries and reasonable income tax, said Mei Lingchuan, an IT professional with experience in California who is now studying for an MBA in Singapore.
“Many of our Chinese alumni who graduated in previous years actually want to come back to work and live here,” he said.
Alfred Wu, an associate professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore, said China’s stringent virus curbs explained why many were looking to leave China.
“The direct motivation of the relocations, as far as I know, is that people want to avoid the impact of COVID restrictions on their daily work and life,” Wu said.
Singapore’s other appeals include the fact that Mandarin is widely spoken, there is a quality education system and easier access for tech sector workers, said Wu.
“The Singapore government favours a certain type of people – technology talents. It has announced an extended tech visa to lure tech workers. I think people in the tech sector have a better chance to settle down in Singapore,” he said.
Starting next September, Singapore will offer a five-year visa for tech industry jobs, an extension from the two to three year permits currently available, according to the Ministry of Manpower.
Allen Wang, a partner at an overseas education consultancy in Shanghai, said enquiries to study in Singapore have been surging since spring after the two-month lockdown of Shanghai.
“When they decide to leave the chaos and unpredictability behind, Singapore is their top choice,” said Wang, who has been in the sector for more than a decade.
“Growth dynamics ebb and flow. Singapore had its prime time before China’s rise to become the world’s factory in the 1990s. If China gears down its reforms and opening up, talent will flow to Singapore and contribute to its development.”
Despite Singapore’s increasing appeal, Chinese emigrants still have to contend with a host of issues once they arrive, said Gao Zhendong, a Beijing-based investor in Asean property and stocks.
“Inflation is already obvious there, and the US’ interest rate hikes are siphoning the liquidity of global investors, and Singapore and other Southeast Asian markets are no exception,” he said.
“In addition, if the relationship between China and the United States continues to deteriorate which leads to geopolitical tension in the region, it will be difficult for Singapore to sway one way or the other.”
This article was first published on SCMP.
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