close
Tuesday June 25, 2024

China's mega-rich move their wealth, and partying, to Singapore

Beijing's recent crackdowns on tech billionaires and tax-shy celebrities, as well as three years of zero-COVID, have led many rich Chinese to look for a safe haven

By AFP
February 04, 2023
This picture taken on February 1, 2023 shows Sentosa Cove private residential housing next to yachts docked at One 15 Marina Sentosa Cove in Singapore.— AFP
This picture taken on February 1, 2023 shows Sentosa Cove private residential housing next to yachts docked at One 15 Marina Sentosa Cove in Singapore.— AFP

Singapore is seeing an influx of ultra-wealthy families from China looking to protect their wealth from a Communist Party that increasingly views them with suspicion.

Beijing's recent crackdowns on tech billionaires and tax-shy celebrities, as well as three years of zero-COVID, have led many rich Chinese to look for a safe haven.

Nervous over the fate of their fortunes, some of the country's mega-rich have since booked tickets to Singapore, insiders told AFP.

The key Asian financial hub ticks all the boxes for relocating tycoons.

Singapore has been ruled by one party for the past six decades, and labour strikes and street protests are banned. Taxes are comparatively low and the population is predominantly ethnic Chinese.

The presence of recent Chinese arrivals is keenly felt in Singapore, with some relocating to luxury homes with waterfront views on Sentosa Island, which also houses a theme park, a casino and a prestigious golf club.

"You cannot imagine the way they spend money. It's crazy," said Pearce Cheng, CEO of AIMS, a firm providing immigration and relocation services.

He recalled attending a client's party where a rare Japanese "Yamazaki 55" whisky, worth around $800,000 a bottle, was served.

Cheng's firm also helps find luxury condos, hire chauffeurs and enrol kids in private schools. It once even bought $61,000 worth of cigars.

The new arrivals drive Rolls Royces and Bentleys, and are often spotted at top-tier golf clubs such as the exclusive Sentosa Golf Club, where foreign members pay $670,000 a year.

"Many of them are younger Chinese, in fashionable designer clothes, and they usually keep to themselves and dine amongst themselves, which is not surprising," said Benny Teo, managing director of Blazon, a consultancy specialising in golf.

'My money is mine'

Relocating to Singapore puts the wealth of China's richest beyond the reach of Beijing, whose recent high-profile crackdowns have rattled billionaires.

Jack Ma, one of the most recognisable faces in Asian business, lost an estimated $25 billion when Chinese regulators pulled the plug on a blockbuster IPO in 2020.

Other Chinese tycoons fear the Communist Party could apply similar pressure or even take over their businesses at low prices, an accountant familiar with the situation told AFP.

"Moving to Singapore is about making sure the family wealth is kept safe and can last for several generations," the accountant said.

Singapore is increasingly viewed as a home rather than just a backup plan, another source in the industry said, adding that clients had told him: "At least when I'm here, I know my money is mine."

One of the founders of China's largest hotpot chain, Haidilao, recently set up a so-called family office in Singapore.

The Monetary Authority of Singapore estimates that the number of family offices — wealth management companies dedicated to individual and group assets — rose from 400 in 2020 to 700 in 2021.

Loh Kia Meng, co-head of private wealth and family office practices at law firm Dentons Rodyk, estimated that 1,500 family offices would have been set up by the end of last year.

"I won't be surprised if the total figure by the end of 2022 shows that one out of two new family offices originates from China," Loh said.

'Neutral zone'

The outflow is expected to continue even though China's strict zero-COVID policy and curbs have now been lifted, analysts said.

Political tensions between Beijing and Washington are reinforcing the desire of some of China's richest to move abroad.

Singapore is a "very handy neutral zone" where the mega-rich can do business, said Song Seng Wun, a regional economist with CIMB Private Banking.

The city-state has deftly managed its relations with Washington and Beijing, maintaining close security ties with the United States while preserving robust trade links with China.

"Media attention on prominent wealthy individuals setting up family offices in Singapore cast the spotlight on our little island and stirred interest," said Loh.

"If the world's rich are congregating in Singapore, why not me?"