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Is Singapore being too choosy about investments from foreign billionaires?

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“By being too choosy, Singapore may lose out. For Singapore to stay in the game, planners might need to ask for less and get more...” says Bloomberg’s Andy Mukherjee

SINGAPORE: A Bloomberg analysis from earlier this week suggests that Hong Kong may have the better strategy for luring the über-wealthy not only to come to its shores but to bring in investments.

The article, titled “Singapore Is Being Too Picky About Its Billionaires” and shared in The Washington Post, Yahoo Finance and The Business Times, noted that while family offices—private wealth management firm catering to high-net-worth and ultra-high-net-worth individuals—have proliferated in Singapore over the past five years, their contribution to the country has hardly been significant.

It may be time to follow Hong Kong’s tactics instead, the piece suggests. Although fewer ultra-rich people have made it to Hong Kong in the last few years due to stricter border measures during the pandemic, the city is proving friendlier in drawing the wealthy of late.

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In Singapore, the assets of those who have set up family offices “made up barely 2 per cent of the $4 trillion managed in the Asian city-state in 2021, and their linkages with its economy are practically non-existent,” wrote Bloomberg’s Andy Mukherjee on July 12.

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Certainly, big names have come to Singapore to establish family offices, including James Dyson, Google co-founder Sergey Brin, and India’s Mukesh Ambani, the second-richest man in Asia.

However, Dyson’s shares have since been transferred back to the UK, and not much has been heard from Brin and Ambani.

Hong Kong hosted over 100 über wealthy families last March at the Wealth for Good summit and “has since followed up with a friendly tax regime that doesn’t set any local investment norms or require any pre-approval. It only insists on HK$240 million (S$40 million) in assets anywhere in the world.”

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In Singapore, in contrast, the requirement is for family offices to have at least S$50 million ($37 million) in assets, with 10 per cent of it or S$10 million, whichever is lower, invested in locally listed securities or startups.

They also need to spend S$500,000 to S$1 million in the domestic economy yearly, while in Hong Kong, a mere S$337,000 in operating expenditure is required.

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And while in Singapore, family offices must hire one non-family member out of the minimum of three investment professionals, Hong Kong has no equivalent requirement.

By being too choosy, Singapore may lose out,” writes Mukherjee, adding, “For Singapore to stay in the game, planners might need to ask for less and get more…

Without a rethink on Singapore’s part, Hong Kong may actually end up with a smarter strategy, out of its sheer desperation for money and talent — and, most importantly, relevance. All the things that its competitor is at risk of taking for granted.” /TISG

59% family offices in Asia now located in Singapore

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