More wealthy Taiwanese are turning to Singapore

SINGAPORE: As tensions rise between China and Taiwan, more and more wealthy Taiwanese businesspeople and their families are relocating assets to Singapore, which has long been considered one of the top financial hubs across the globe.

Some high-net-worth individuals from Taiwan are parking their money in Singapore rather than Hong Kong, according to recent reporting from Bloomberg, choosing to set up family offices or obtain residency or employment passes as a means of reducing risk.

One businessman said that the choice of making Singapore the offshore base for his family’s textile business was to have “a place for the plane to land in case of emergency.” Many individuals spoke to the media company on condition of anonymity, citing worsening cross-strait relations and uncertainty surrounding the coming year as reasons for preparing contingency plans.

Not that this is necessarily something that is a new phenomenon. An example of a wealthy Taiwanese relocating to Singapore is Jason Chang, the chairman of the Taiwan-based ASE Technology Holding. Mr Chang has been a Singapore citizen for the past two decades, and, due to the AI boom, is one of the richest Singaporeans. However, there is no evidence that he moved to the city-state due to geopolitical tensions.

However,  the idea of a safe landing place has been brewing for the past few years. In December 2022, there were reports of Taiwan’s ultra-rich growing nervous, and fund managers and private bankers were going on record as saying that exit strategies were in the works among rich families in Taiwan, who were making plans to relocate both businesses and family members to Singapore.

While Hong Kong’s favor has fallen due to Beijing’s increasing influence, Singapore is seen in a highly positive light because of its political stability, strong legal system, low taxes, and well-established financial sector.

According to data from E.Sun Bank and KPMG Taiwan, offshore assets from Taiwan is now at NT$10.4 trillion (S$419.5 billion), which is more than the NT$9.6 trillion (S$387.17) in Hong Kong.

The influx of wealth from Taiwan, or any other country, is a positive for Singapore in several ways. It means growth for the city-state’s financial sector, with higher fees earned for private banking, asset management, tax advisory, and investment management, among others. Importantly, these are high-value industries employing skilled workers.

Moreover, Singapore’s deeper role in wealth management makes it less dependent on trade and manufacturing, as well as strengthens its position as a global finance centre.

On the downside is a likely increase in property prices, as an influx of wealth and the wealthy means a rising demand for both home and office spaces. In space-scarce Singapore, this is no small matter.

It also brings a greater risk for money laundering, as the S$3 billion case in 2023 showed. Regulations have been tightened since then, however. /TISG

Read also: ASE’s Jason Chang, one of the richest Singaporeans, sees net worth double as AI demand grows