If you open a world map and want to find another market with rapid economic growth, Southeast Asia might be the best choice. Developed economies like Japan, the United States, and Europe are fiercely competitive, but the “new cake” drawing capital’s attention is right here in Southeast Asia!
According to statistics, Southeast Asia is the fastest-growing region for internet users globally. With a demographic dividend of 600 million people and the inherent advantages of an emerging market, it has become a “blue ocean market” favored by global multinational entrepreneurs and investors.
And within Southeast Asia, the strongest in all aspects is likely Singapore.
Since the global pandemic began, apart from the rise and fall of case numbers, what has changed the most? The economy!
It’s not just ordinary people who are affected; high-net-worth individuals are bearing the brunt. Regardless of the country, economies are in a deep slump.
But Singapore is an exception. According to the Bloomberg Index, a great deal of money has flowed into Singapore’s pockets during the pandemic, and the number of immigrants has reached an unprecedented high.
Singapore’s top three richest people—Forrest Li of Sea Group, Zhang Yong of Haidilao, and Li Xiting of Mindray Medical—are all new immigrants.
In addition, there’s Facebook co-founder Eduardo Saverin, financial guru Jim Rogers, Alibaba co-founder Sun Tongyu, and celebrities like Jet Li, Cecilia Cheung, and Gong Li.
Have you ever wondered why, with so many choices in Southeast Asia and even all of Asia, these wealthy celebrities are particularly fond of Singapore?
Today, AnjiaSG will take an in-depth look with you at what makes Singapore so attractive to so many immigrants. Reading to the end might change your perception of Singapore.
If you are interested in Singapore, you are welcome to contact us.
Table of Contents
Singapore is a Global Offshore Wealth Management Center, Financial Market
When people think of Singapore, they think of a developed country. Poverty and Singapore are almost never associated.
In fact, during its founding period, Singapore was very resource-poor. Before independence, political turmoil and the British withdrawal led to massive unemployment.
It can be said that the people’s lives were difficult, conditions were backward, and both land and population were scarce.
So how did a country with no advantages transform into an economic powerhouse in just a few decades?
One strategy was the implementation of a “finance-based nation” strategy in the 1970s, which rapidly changed Singapore’s economic structure, increased its international competitiveness, and made it one of Asia’s three major financial centers, alongside Tokyo and Hong Kong.
The most crucial part of this strategy was the offshore financial market.
Since the 1997 Asian financial crisis, the Singapore government has been promoting the development of offshore private banking.
“Offshore” means that an investor’s company is registered in an offshore jurisdiction, but the investor does not need to be physically present there; their business operations can be conducted directly from anywhere in the world.
The main attractions for wealthy individuals to manage their offshore wealth in Singapore are the relative stability of the Singapore dollar compared to other foreign currencies, a well-developed system, a robust capital market, and a diverse talent pool that can help them improve capital turnover efficiency and hedge against interest rate and currency fluctuations.
According to the Monetary Authority of Singapore (MAS), banks in Singapore currently manage nearly $200 billion in private wealth.
In recent years, the growth rate of private wealth attraction has remained between 15% and 20%.
More than 30 of the world’s top personal finance and wealth management companies are based here, bringing prosperity to Singapore’s banking institutions.
Singapore also has a special dual-shore financial center system. By issuing full, restricted, and offshore licenses, it has established a segregated international financial center that attracts foreign institutions while effectively protecting the development of local ones.
Singapore is a Tax Haven, with a Low Tax System
In most countries, the more you earn, the more tax you pay.
But the wealthy are naturally reluctant to give away their hard-earned money.
Other countries’ problems become Singapore’s opportunities for development.
To attract capital, Singapore has given the green light to foreign high-net-worth individuals, allowing them to legally avoid various taxes and optimize their asset allocation.
As Asia’s financial hub, Singapore has no foreign exchange controls or capital gains tax.
The corporate income tax rate is currently capped at just 17%, and personal income tax does not exceed 22%.
Singapore operates on a territorial tax system with low tax rates, exempts capital gains tax, and has no inheritance tax.
For citizens and Permanent Residents (PR), all income earned outside of Singapore is tax-free.
Singapore has also signed double taxation avoidance agreements with 100 countries and regions, which is an attractive factor for families with cross-border businesses.
Whether working or doing business in Singapore, one can enjoy lenient tax policies that help preserve personal wealth and ensure its transfer across generations.
Singapore is the Switzerland of the East, with Banking Secrecy Laws
After the subprime mortgage crisis in the United States, the sovereign debt crisis in Europe, and the crumbling myth of Swiss banking secrecy, the global wealth management industry experienced a significant shake-up.
Many wealthy individuals began to reconsider where to safely place their assets, and Singapore emerged as the “Switzerland of the East,” offering even greater security than Swiss banks.
This is because Singapore’s Banking Act is even stricter than Switzerland’s.
The penalties for violations are very high. Individuals can be fined up to S$125,000, while corporations can face fines of up to S$250,000, so few dare to take the risk.
Singapore has a relatively relaxed approach to managing foreign capital.
Immigration authorities only conduct a general inquiry into the “first pot of gold” of immigration applicants, with low requirements for explaining the source of funds.
This has allowed Singapore to rank first globally in the Index of Economic Freedom for three consecutive years, making it the country with the highest economic freedom in the world.
By mid-2020, non-resident deposits in Singapore had reached S$62 billion, a staggering 44% increase from 2019.
Singapore is now growing faster than Switzerland.
According to research, by 2028, Singapore will become the world’s largest cross-border financial center.
Singapore’s Political Situation is Stable, Balancing Major Powers
Singapore enjoys a geographical advantage, serving as a crossroads for both the East and the West.
In terms of diplomacy, Singapore is rooted in ASEAN, maintaining good relations with neighboring countries, and also has close cooperative ties with Asian nations, particularly China, Japan, South Korea, and India.
It pursues a policy of “balancing major powers,” actively engages in economic diplomacy, and has a very stable internal political situation. All these factors make Singapore the “Switzerland of Asia” in a certain sense.
As for its legal system, Singapore has long been a model for many countries in the Asia-Pacific region.
The law is held above politics, which has made many wealthy Asians view Singapore as a financial safe haven for years.
The legitimate rights and interests of businesses and entrepreneurs are extremely well-protected in Singapore. It also has great respect for intellectual property, with related laws that are comprehensive and among the best in the world, providing the perfect “sanctuary” for the assets of the wealthy.
Singapore is a Livable City, a Garden City
Many places are either great for retirement with a slow pace of life but lack development, or they are highly developed but stressful and unsuitable for living.
Is there no country in the world that offers the best of both worlds? The answer, once again, points to Singapore.
In terms of living environment, Singapore is known as the “Garden City,” with high greenery coverage, fresh air, and a clean, beautiful urban landscape.
Its strict legal system also makes Singapore’s public safety environment a model for the Asian region.
At the same time, Singapore boasts the world’s number one airport and second-largest port, with service quality and speed ranked first in the world for three consecutive years.
Singapore also has advanced communication equipment, information delivery systems, and fast transportation facilities. Its medical technology ranks among the top ten globally.
Superior living conditions and standards, a high-quality national culture, and other factors make it very easy for personnel from foreign private asset management institutions to conduct business here.
The Singapore Passport is Highly Valued, the Strongest Passport
Multinational businesspeople are often “jet-setters.” With deals worth tens of millions on the line, they can’t afford to be delayed by trivial matters like travel.
A good passport can eliminate such worries for the wealthy.
In the 2021 ranking of the world’s most powerful passports, Singapore, unsurprisingly, remained at the top, ranking second. A Singapore passport allows visa-free access to 192 destinations, enabling free travel to numerous countries, including the United States, Canada, Japan, and the European Union.
This visa-free status offers a significant time-saving advantage, making global travel extremely convenient.
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Singapore Has High-Quality Education, Second to None
The quality of education in Singapore needs no introduction. In world university rankings, the National University of Singapore (NUS) and Nanyang Technological University (NTU) are second to none.
Furthermore, Singapore has a very well-established education system and an excellent educational framework, featuring a mature bilingual environment that allows students to master fluent English while learning Mandarin.
It is this fusion of Eastern and Western influences that has made Singapore a business hub. Of course, a major draw for wealthy foreign immigrants is the high quality of Singapore’s public schools and its globally recognized examination system. Studying in Singapore is like holding half a ticket to the world’s top universities.
However, it is difficult for foreigners to apply, and tuition fees are extremely high. But by changing one’s status, one can gain access to affordable, first-class education. Why wouldn’t one do it?
In addition to its bilingual environment, Singapore, as part of the broader “Greater China” sphere, has a Chinese population of over 70%.
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Singapore’s Real Estate Market is Stable
If you had a lot of money, what would be the first thing you’d do?
We often talk about establishing a career and starting a family. No matter how wealthy someone is or how big their business, they need a home as a safe harbor.
However, buying a house is not a simple matter, especially as a foreigner facing numerous policy restrictions in your home country.
The advantage of Singapore’s real estate market is that the government places great importance on maintaining its stability, readily introducing various property cooling measures. Furthermore, private property in Singapore can be held on a freehold basis, which is private ownership in the truest sense.
Singapore’s rental management system is well-regulated, with a full range of property types available, from condominiums and landed houses to villas and private residences. Additionally, investment property loan interest rates are low, with financing available up to 75%. Such an attractive system naturally draws wealthy individuals to buy and invest in property here.
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