An increasing number of affluent Chinese are concerned about holding their money within China.
For some, they see Singapore as a more reliable place to invest. In 2019, when protests began to damage Hong Kong’s economy, China’s upper class started seeking different options for storing their wealth.
Singapore became appealing because of its sizable Mandarin Chinese-speaking population and no wealth tax in the country.
Over the last 12 months, inquiries about setting up a family office in Singapore have doubled at Jenga. According to Iris Xua, founder of Jenga, a five-year-old accounting and corporate services firm, the majority of inquiries come from people in China.
While setting up a family office in Singapore typically requires at least $5 million in assets, more than 50 of her clients have opened family offices in Singapore with at least $10 million in assets each.
In only a few decades, China’s booming economy created hundreds of billionaires, with even more joining their ranks last year, according to Forbes reports.
That brought the total number of billionaires in China to 626, second only to the United States’ 724 billionaires.
Xu said the Chinese clients believe there are plenty of opportunities to make a fortune in China, but they are not sure whether it is safe for them to keep money there.
But there is also the downside risk in Singapore as well.
Since an ongoing war between Russia and Ukraine, Singapore joined the U.S. and the EU in imposing sanctions on Russia reportedly freezing local bank accounts held by sanctioned Russian individuals and entities.
This brought uncertainty to Chinese citizens who want to open family offices in Singa to delay their plans.
But after all, the accounting and corporate services firms confirmed that Chinese people looking to open family offices in Singapore still have grown this year at a pace similar to that of 2021.