Singapore among top 5 cities for investment migration in evolving wealth market

15, Sep. 2021

Jewel mall of Changi Airport of Singapore on September 14, 2021. A regional air hub, the city-state is a gateway to emerging markets in Asia. (Photo: NNA).
Jewel mall of Changi Airport of Singapore on September 14, 2021. A regional air hub, the city-state is a gateway to emerging markets in Asia. (Photo: NNA).

By Celine Chen

SINGAPORE, NNA - Singapore is the only Asian city among the top five in a new index that rates the quality of residence for business through an investment migration program for the ultra-wealthy.

The "best residence-by-investment cities for business" index sees London taking up the Number 1 spot, followed by New York and Sydney. Singapore is placed fourth, ahead of Zurich.

All five score the highest for security, infrastructure, and stability, with Sydney taking first placing overall for security, said Henley & Partners which came up with the index in partnership with Deep Knowledge Analytics.

This index ranks the leading 25 capitals and cities around the world that international entrepreneurs, company owners, professionals, and high-net-worth individuals can acquire residence through investment migration programs.

Scoring highest in terms of residence-by-investment program offerings alone are Vienna (9th) and Lisbon (14th), followed by Rome (16th) and Zurich (5th), and Athens (20th).

When it comes to value for money, Dubai (11th), Riga (17th), Limassol (19th), Bangkok (23rd), and Port Louis (24th) are all appealing with tax-friendly, affordable, high-standard-of-living options for residence through investment.

On the usefulness of the index to wealthy decision-makers, Henley & Partners said in a press release on September 14, "Using an interactive tool, users can select the different factors ¬that matter most to them to make strategic, data-driven decisions about where best to locate their headquarters, executives, employees, and themselves and their families in the post-pandemic landscape."

The index was produced "in response to a dramatically changing global landscape, with business and talent relocation on the rise for a host of factors — from the US-China trade wars, to Covid-19 and remote work, and the G20 proposal for a global minimum corporate income tax".

Juerg Steffen, CEO of Henley & Partners, said the index would be invaluable to those considering investment migration as a means of creating optionality in terms of where they and their families can live, work, study, and invest.

"Residence-by-investment programs provide a channel for building a migration portfolio of multiple complementary residence and citizenship options to hedge against volatility and take advantage of new opportunities in the pandemic world order," he added.

As a global financial center, Singapore's game plan to woo more ultra-rich with low tax rates and regulatory changes is paying off.

The number of family offices set up to preserve and grow their assets in Singapore rose five-fold between 2017 and 2019, according to the Monetary Authority of Singapore.

Last October, the government reported that there were about 200 family offices, including those owned by locals, in Singapore.

This reflects the appeal of "Singapore Inc" as a country with formidable strengths and attractions in law, political and economic stability, friendly tax regime and high quality of life, among other things, according to Lee Woon Shiu, group head of wealth planning, family office and insurance solutions at DBS Private Bank.

"Along with Singapore's strong regional connectivity and expertise in navigating cross-cultural and cross-jurisdictional complexities, more family offices are coming to view Singapore as the gateway to Asia's opportunities, and an ideal neutral place from which to invest in the region," said Lee in his article in The Business Times last month.

One of them is American billionaire investor Ray Dalio, the founder of Bridgewater Associates, reportedly the world's biggest hedge fund, who expanded his family office to Singapore in 2020 to be in the region of "opportunities and excitement".

Speaking at an investment dialogue last week, he told investors how they simply cannot ignore China and Singapore.

Other famous billionaires who have moved their assets to Singapore include Google co-founder Sergey Brin, Facebook co-founder Eduardo Saverin, and British inventor James Dyson.

Lee and other industry players said the deadly COVID-19 contagion which has killed millions, also triggered a wake-up call for many wealthy families as they began to think about succession planning and possible transience of their assets.

It nudged many families to pay more attention to structural, long-term needs such as wealth preservation and governance, as well as to explore more tax-efficient structuring options as their countries started proposing higher taxes on the richest.

In an insight article, accounting firm PwC said the pandemic as well as regulatory and political changes in some territories have prompted several key trends for family offices, such as governance, transparency, cybersecurity, investments, next-generation or succession, and philanthropy.

It said, "The current COVID-19 global pandemic has also brought into sharper focus the importance of best practices in the context of estate and succession planning. Defining how control will pass, to whom, and how the NextGen will make decisions (unanimous, majority, super majority - and on what terms) has been reprioritised on the agenda for many family offices."

Globally, the wealth management market is expected to hit $3.43 trillion by 2030, growing at 10.7 percent CAGR (compound annual growth rate), according to Allied Market Research.

Driving it is the rapid demand for alternative investments including private equity, commodities, hedge funds, real estate investment trusts (REITs), and intellectual property, it said.

Dominic Volek, group head of private clients at Henley & Partners, said there are abundant opportunities for affluent and talented individuals considering relocating in the wake of COVID-19.

"Along with seeking out new domicile options for their families, more and more investors are considering relocating their businesses. This trend had begun pre-pandemic, but it is accelerating. All 25 cities are proactively welcoming foreign investors, and while some are clearly leading the pack, each has its strengths and particular appeal."

Based in London, Henley & Partners is a global citizenship and residence advisory firm that also advises governments on residence and citizenship-by-investment policy.

Covering five regions, its index taps into more than 1,000 data points and more than 40 different parameters and sub-parameters to rank the cities according to 10 main categories that represent the most pressing relocation considerations.

They include lifestyle, tax, education, real estate, healthcare, security, infrastructure, and stability, as well as safety in the pandemic, and the relevant investment migration program.

Parag Khanna, FutureMap founder and author of upcoming book MOVE: The Forces Uprooting Us, said the focus of the new index on leading cities rather than countries is the right approach since nations are plagued by great disparities in wealth and culture.

He said, "Technological connectivity is creating new vectors of mobility for millions of people. Though we are evolving towards a world in which ever more work is conducted in the cloud, management and employees still have to be somewhere, and given the diverse risks businesses face, from pandemics to conflict to climate change, they must think very carefully about where to expand or relocate, seeking hubs that offer a high degree of reliability in their capacity for business continuity under diverse scenarios."