Singapore- A Leading Wealth Management Centre

August 5, 2021 by oneheritage

One Heritage Group has expanded to Singapore in 2021 by setting up a new fund management company, One Heritage Capital Management Singapore (1HCapital). The inception of 1HCapital is in line with the group’s strategy to offer their expertise to Singapore and the rest of Southeast Asia (including Malaysia, Indonesia and Thailand).

1HCapital intends to tap on Singapore’s stable political environment, status as a financial hub, geographical location, advanced financial technology and investment expertise, to attract and offer better investment options for HNW clients and global chinese investors.

Singapore aims to establish its financial sector as one of the leading private banking and wealth management centres globally, by building up a strong ecosystem to support growth.

These include:

A robust regulatory framework that supports the development of the financial sector especially in the areas of digital banking and fund management.

A well-developed infrastructure and professionals in the field of asset management, wealth and succession planning, foreign exchange and derivatives trading.

A diverse pool of both local and international wealth management talent, supported by world class training institutions. Singapore’s bilingual education has equipped most local professionals with proficient English and a mother tongue language (Mandarin, Malay and Tamil).

Comprehensive suite of global wealth management players including trust companies, fund managers, foundations, family offices and ancillary service providers such as international tax, international legal advisors, and global technology platform providers.

According to MAS, Singapore has 5 times the number of Family Offices between 2017 – 2019. A survey conducted by Asian Private Banker has highlighted that Singapore is the most preferred offshore wealth hub and Singapore is expected to attract offshore wealth at a compounding annual growth rate of 8% through 2021, which is more than twice the rate expected in Switzerland over the next three years.

The breadth and depth of institutions here also give individuals ready access to global and regional financial markets while providing a full suite of wealth management services to meet their every needs. Despite the pandemic crisis, Singapore’s financial sector remains strong and consistent, especially in the private banking sector which sees a positive year-on-year growth in assets under management (AUM).

The super-rich are choosing Singapore as the world’s safest haven

According to THE BUSINESS TIMES, Singapore has long been a draw for wealthy Chinese, Indonesians and Malaysians who would come for short trips to shop, visit the casino or get medical check-ups at world-class clinics.

The COVID-19 pandemic however, prompted many tycoons and their families to seek residency in Singapore to ride out the storm. Based on data by the Johns Hopkins University, mortality rates in our neighbouring countries such as Malaysia and Indonesia were more than 10-30 times higher than in Singapore, presenting Singapore as an attractive and safe regional hub, resilient in managing crisis in an efficient manner. (THE BUSINESS TIMES, May 29, 2021)

The increasing trend of family offices in Asia

According to the PwC Billionaires Insights 2019, over the past five years until 2018, the “billionaire effect” has been evident. The aggregate wealth of billionaires at end 2018 is over a third higher than five years ago, with a margin of $2.2 trillion USD. The billionaire population has increased by 38.9% with 589 individuals who became billionaires for the first time.

Traditionally, families have held their investments through holding companies or special purpose vehicles (SPVs). But in today’s world, simpler and lean structures are generally more favoured. Hence, wealthy families are increasingly moving towards setting up a “super” holding company (or a family fund) which houses all their financial assets and SPVs. Singapore has increasingly become the choice for the set-up of a family office and family funds as it meets the criteria that many families are looking for. According to NIKKEI ASIA, there are about 200 family offices in Singapore, with assets under management estimated at around $20 billion.

Singapore lures in the rich with friendly rules and subsidies

According to NIKKEI ASIA, Singapore is becoming the playground for the super wealthy. With its low-tax regime, free-market credentials, and foreign funds, an ever-increasing amount of assets have been flowing into the country, even during the pandemic.

Total deposit from investors outside of Singapore into Singapore’s financial institutions has seen a 20% YOY growth, reaching the highest ever level of SG$62.4 billion in January 2021.

Singapore government has introduced the variable capital company framework (VCC) in January 2020, a new corporate structure for investment funds to support the development of wealth management businesses and encourage wealth transfer from Cayman Islands. (NIKKEI ASIA, March 14, 2021)

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