Revamped regulations in Singapore spark frustration, while Hong Kong attracts high-net-worth individuals with tax incentives and residency programs.
SINGAPORE: Hong Kong is once again becoming a preferred destination for high-net-worth individuals (HNWIs) from mainland China, reversing a recent trend where political unrest and regulatory changes prompted many to relocate to Singapore.
According to The Edge Singapore, data from New World Wealth and Henley & Partners reveals that approximately 200 HNWIs are expected to move to Hong Kong this year, driven by new tax incentives and residency programs tailored for family offices.
Singapore’s Tighter Controls
Singapore, previously a hotspot for Chinese wealth, has introduced stricter anti-money laundering measures in the wake of a $3 billion laundering scandal. These regulatory changes have frustrated some wealthy Chinese residents, prompting them to reconsider their financial base.
The Monetary Authority of Singapore has implemented a digital customer information-sharing platform, which has received mixed reactions. Private bankers report increased reluctance among clients facing heightened scrutiny.
Hong Kong’s Revival
In contrast, Hong Kong’s financial sector has experienced a resurgence. Assets under management reached HK$31 trillion (S$5.36 trillion) in 2023, fueled by robust private banking growth and a threefold increase in net fund inflows.
Efforts to attract talent, including the 2022 top talent visa program, have proven effective, with over 68,000 applications approved, mostly from mainland China. Hong Kong’s strategic location and post-pandemic business improvements have further enhanced its appeal.
Finance professor Zhiwu Chen from the University of Hong Kong noted that many mainland billionaires prefer Hong Kong due to its perceived stability compared to arbitrary government interventions in China. He added that some wealthy individuals are reconsidering Singapore, especially if its regulations resemble those in mainland China.
Growing Momentum in Hong Kong
Hong Kong-based private banks are reporting stronger growth than their Singapore counterparts. Insurance product sales, popular among wealthy Chinese, surged by 63% in Hong Kong during Q1 2024.
Despite challenges such as limited offshore wealth mobility and a sluggish IPO market, Hong Kong continues to attract investment. Its new residency plan, offering residency for HK$30 million investments, has already received over 340 applications since March, potentially bringing more than HK$10 billion in investments.
Competing Wealth Hubs
While Singapore remains a global leader for migrating millionaires—expected to welcome 3,500 millionaires this year—Hong Kong is rebounding after last year’s net loss of 500 HNWIs, according to Henley & Partners’ research.
“Despite a tough past decade, Hong Kong is still one of the world’s top millionaire hubs,” said Andrew Amoils, head of research at New World Wealth.
As Singapore tightens its regulations, the competition between these two financial powerhouses for ultra-rich investors is heating up.
