On September 9, McKinsey released a report on family offices in Asia, noting that Singapore and Hong Kong account for about 15% of the world's single-family offices, with funding originating primarily in Asia, particularly mainland China.
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Wealth in Singapore and Hong Kong
Mainly from mainland China
McKinsey forecasts that between 2023 and 2030, Asia-Pacific ultra-high-net-worth (assets of more than US$50 million) and high-net-worth (assets of US$1 million to US$50 million) families will pass on about US$5.8 trillion in wealth.
Ultra-high-net-worth families account for 60% of the total inheritance, with many setting up family offices to manage their wealth.
As a result, the number of single family offices in Singapore and Hong Kong has increased to around 4,000 since 2020, a three-fold increase.
The report emphasizes that the wealth flowing into these two places is mainly from Asia, especially mainland China, followed by India, Indonesia and other parts of Southeast Asia.
At the same time, McKinsey expects high net-worth families in Europe and North America to increase their investments in Singapore and Hong Kong, as they see Asia as the third largest haven for their wealth, in addition to Europe and the US.
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Singapore and Hong Kong
What are the advantages?
According to McKinsey's in-depth analysis, Singapore and Hong Kong are the preferred locations for global family offices due to the following four core attractions:
1. Tax Benefits
Both Singapore and Hong Kong are known for their low tax rates and highly transparent tax environments. For a single family office, this means lower operating costs and higher return on investment.
Specifically, Singapore offers a number of tax reliefs, while Hong Kong attracts family offices with its simple tax regime and low corporate income tax rate.
2. Clear Regulations
In terms of the regulatory environment, both Singapore and Hong Kong have well-established and transparent legal systems that provide a clear and predictable regulatory framework for family offices.
Singapore's financial regulator is known for its efficiency and rigor, and its moderate regulation of the financial market ensures market stability and promotes financial innovation.
Hong Kong, on the other hand, has won the trust of global investors by virtue of its well-established legal system, independent judicial system and highly internationalized financial environment.
3. Mature Financial Ecosystem
As financial centers in Asia, Singapore and Hong Kong have highly developed financial markets and rich financial service resources.
From banking, securities, insurance to asset management and private banking, various financial institutions are available, providing a full range of one-stop financial services for home offices.
In addition, the two places have gathered a large number of high-quality professionals, including investment consultants, tax experts, legal advisors, etc. With their profound professional knowledge and rich industry experience, they provide strong intellectual support for the Home Office.
4.Obtaining Identity
In order to attract international talents and families to move in, both Singapore and Hong Kong have implemented flexible right of abode policies.
Applicants who set up a local family office and meet the established investment and management criteria can then apply for residency or permanent resident status.
Overall, Singapore and Hong Kong are favored by the Chinese wealthy. If you are interested in applying for their status or setting up a family office, please contact Nebula Sea International and we will provide you with customized services.
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