As China Reopens, Flight of Wealthy Chinese to Singapore Set to Accelerate
Anxiety over the country’s direction and three years of Covid restrictions have prompted many to move elsewhere
By Jason Douglas, Keith Zhai and Stella Yifan Xie
Feb. 27, 2023 9:00 am ET
SINGAPORE—Well-heeled Chinese are leaving China for Singapore, attracted by the city-state’s low taxes and high-quality education, amid anxiety over China’s direction under leader Xi Jinping.
The trend is set to accelerate, according to relocation consultants and lawyers, as China’s reopening allows for freer movement across the country’s borders, making it easier for wealthy individuals to move their families overseas and manage their assets from abroad. The shift follows almost three years of strict Covid-19 controls that all but cut China off from the outside world.
“Three years has really made them think about whether China is the place to be,” said Ryan Lin, director of Bayfront Law, who has set up around 70 family offices for wealthy foreigners to manage their fortunes in Singapore during the past two years.
The Singapore government doesn’t publish data on the nationality of new residents, but advisers to well-off emigrants say that Chinese nationals account for a large and growing share of those seeking a new home.
A 42-year-old woman from Shanghai moved to Singapore last summer with her daughter, who is 14. During the past few years, she and her husband had resolved to school their teenager abroad after growing increasingly unhappy with an academic environment in China that they felt had become less open. Teachers at their daughter’s international school were discouraged by officials from using Western textbooks, said the woman, who asked to be identified by only her first name, Lisa.
China’s strict approach to the pandemic and last year’s two-month lockdown in Shanghai cemented their decision to move. “We thought if we don’t leave sooner, we may never be able to,” she said.
She and her husband, who has remained in Shanghai, want to eventually send their daughter to school in the U.S. She said she believes Singapore is the right place to wait out what they hope will be an eventual thaw in chilly U.S.-China relations.
“Singapore is a perfect springboard,” she said.
Around 10,800 wealthy Chinese left the country in 2022, according to estimates from New World Wealth, a research firm that tracks the movements and spending habits of the world’s high-net-worth citizens.
That marked a revival in departures after the first years of the pandemic, though the number leaving fell short of the roughly 15,800 who left in 2019.
Andrew Amoils, head of research at New World Wealth, said he expects departures from China in 2023 to pick up alongside a broader revival in rich individuals moving around the world.
The company expects around 125,000 people with net assets of more than $1 million to move this year, exceeding the 2019 record of 110,000. Chinese nationals usually account for 8% to 10% of the total, said Mr. Amoils. New World Wealth tracks the behavior of around 150,000 individuals in a database to derive its estimates for total migration.
Henley & Partners, a consulting firm that helps wealthy people obtain residence rights overseas and advises governments on designing financial incentives to tempt rich migrants, estimates that Singapore saw an influx of around 2,800 rich foreigners from all countries in 2022, making it the third-most-popular destination for wealthy movers last year after the United Arab Emirates and Australia.
The influx is visible in corners of Singapore’s economy.
House prices rose 8.6% in 2022, according to OrangeTee & Tie, a real-estate research company, which in an October report said buyers from China bought more condominiums last year than any other group of foreigners.
A year’s membership for a foreigner at the exclusive Sentosa Golf Club, meanwhile, cost 250,000 Singapore dollars, equivalent to around $185,200, prepandemic, but has since soared to 840,000 Singapore dollars. Registrations for luxury cars have risen sharply, government data show.
The city has particular attractions for Chinese citizens. It is relatively close to Hong Kong and the Chinese mainland, Mandarin is widely spoken alongside English, and the city boasts excellent schools and a financial sector heavily focused on wealth management.
Major Chinese companies have significant outposts in Singapore, including TikTok and its Chinese parent, ByteDance Ltd., which moved staff and executives to Singapore in part to soothe U.S. concerns over the short-video app’s Chinese ties. Some in Washington say those links threaten national security and risk exposing users to censorship or manipulated content, which the company denies. ByteDance Chief Executive Liang Rubo, TikTok head Shou Zi Chew—who is Singaporean—and product chief Zhu Wenjia are all based in the city-state.
Highfliers from China with jobs to go to can obtain employment passes to live, work and bring their families to Singapore, while permanent residency and a fast-track route to Singaporean citizenship are available for those willing to invest at least 2.5 million Singapore dollars ($1.9 million) in new or existing Singapore businesses.
The city-state also welcomes entrepreneurs eager to set up new businesses, and allows wealthy individuals to establish family offices to manage their fortunes without paying tax on investment income, provided they spend at least 200,000 Singaporean dollars a year on rent, salaries and other expenses, and allocate 10% of their assets to Singaporean investments. Individuals with experience can designate themselves as managers to gain employment.
There were around 700 family offices in Singapore at the end of 2021, up from 400 a year earlier, according to estimates from the Monetary Authority of Singapore. The regulator says it doesn’t have precise data on family offices because they don’t manage money for third parties, and therefore don’t need a license to operate.
Advisers to new arrivals say another factor driving Chinese nationals to move abroad is unease over a darkening climate for accumulating wealth in China, as Mr. Xi talks up the need for greater redistribution in his drive for a more egalitarian society.
“They don’t feel safe managing their wealth in China or Hong Kong. Singapore becomes a very natural alternative for them to park their money,” said Mr. Lin of Bayfront Law.
Other motives, say advisers, include the worsening relationship between the U.S. and China, which some believe is bad for business. Some are just fed up after almost three years of strict pandemic controls.
A spokeswoman for Henley & Partners said inquiries from China shot up in early January after Covid-19 restrictions were ditched, having already jumped in 2022 in the wake of Shanghai’s lockdown.
Dominic Volek, group head of private clients, said Singapore isn’t the only place that is enticing to rich Chinese. Other popular destinations for Chinese nationals looking to make an investment to obtain residence rights include Portugal and Greece, he said, often as a form of insurance in case they wish to make a swift exit.
“If you are wealthy, you just want optionality,” he said.
https://www.wsj.com/articles/as-china-reope...c0b12282?page=1
