Wealthy families in China seeking to move their assets out of the mainland are increasingly turning to Hong Kong instead of Singapore, as officials in Southeast Asian city-state ramp up their scrutiny of foreign investors following a spate of money laundering busts.
Nikkei Asia reports that establishing a family office in Hong Kong is now far quicker than in Singapore. The city’s shared Chinese culture, proximity to the mainland and variety of residential schemes are also threatening Singapore’s dominance.
The Covid-19 pandemic and China’s subsequent economic troubles spurred many wealthy Chinese families to relocate their financial assets and Singapore has been a favourite haven. Since the end of 2022, there has been a 27 percent increase in Chinese single-family offices qualifying for tax incentives there.
[See more: Hong Kong tops the list of the world’s most expensive cities]
However, it has become harder for Chinese people to gain residency after a number of individuals involved in a major money laundering case were found to be Chinese-origin residents holding other passports.
Last August, Singaporean police arrested 10 people holding passports from China, Turkey, Cambodia, Cyprus, Vanuatu, Dominica, and St. Kitts and Nevis in connection with the country’s biggest ever money laundering bust. The Monetary Authority of Singapore (MAS) froze or seized assets worth more than US$2.3 billion and all the suspects have since been convicted.
The MAS has confirmed it has tightened processes designed to weed out bad actors, though told Nikkei Asia that the number of applications for family office tax incentives was “still strong.”
