MORE newly-minted millionaires and billionaires from China are eyeing Singapore as a hotspot to park their wealth.

The number of new family offices setting up shop here has increased significantly in the past few years, with close to 44 per cent or 63 out of 143 new family offices originating from China as at April this year - and the number is set to grow.

Tighter tax conditions a draw

The move by the Monetary Authority of Singapore in April to raise the bar for tax perk eligibility is attracting family offices and HNWIs that seek exclusivity.

These conditions include larger fund sizes and higher assets under management (AUM) growth targets and higher commitments to business spending. 

In addition, raising the bar makes having a family office in Singapore even more coveted among the newly rich, as it implies one’s net worth would be at least S$50 million in order to be able to set aside the current minimum fund size of S$10 million. And this would have to be raised to S$20 million in 2 years. (There was no minimum fund size before the recent changes.)

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Besides its political and financial stability, Singapore also acts as a springboard for entrepreneurs to do business with the rest of South-east Asia.

Young and Rich

The recent crop of HNWIs from Greater China are younger with higher risk appetites, with some even uprooting themselves to do business in the Republic.

Their interests range from traditional sectors such as real estate and consumer goods, to newer areas like digital assets and digital banking.

A further 10,000 HNWIs are expected to join them this year - this number comprises just 1 per cent of HNWIs in China, according to an investment migration consultancy.

They carry with them an average of US$4.8 million worth of capital assets, bringing China’s total estimated outflow to around US$48 billion. 

Coves, Condos and Conservation

Singapore property has always garnered interest from the Chinese, with the most recent example of an entire floor at Suntec City Tower 2 being sold for S$38.8 million to a Singapore permanent resident of Chinese descent. At S$3,300 per square foot, it is the highest psf price ever achieved for an entire floor in that building.

The Chinese from Fujian, in particular, are the biggest group of foreigners snapping up villas in Sentosa Cove - the only place in Singapore where a foreigner who is not a Singapore permanent resident (PR) may buy a landed home, albeit subject to government approval.

A sea-facing bungalow in Sentosa Cove was bought for over S$39.3 million in 2021 by a Fujianese who has stakes in 2 Singapore-incorporated companies, while a separate bungalow was bought by the family of Chinese tycoon Zhou Haijiang for S$16.5 million in 2020.

The Fujianese have also spread their wings to high-end condominium units in Singapore’s prime areas and the conservation shophouse market, acquiring properties in locales such as Chinatown and Amoy Street.

In addition, the strata office market is also increasingly favoured by the Chinese. An office unit at The Central above Clarke Quay MRT was bought by a Singapore-incorporated vehicle owned by Wang Kuncheng, a Chinese citizen understood to be from Fujian.

These buyers are typically in their late 20s and 30s. Some have settled with their families in Singapore and set up businesses in the city-state, including management consultancy services, accounting services, fintech, and food and beverage.