During the pandemic, super-rich people flocked to Singapore, attracted by the less stringent controls and favorable tax policies. The variety of single-family offices within the city-state has greater than tripled in three years, from 400 in 2020 to 1,400. at the top by 2023, based on government figures.
But the industry is increasingly coming under scrutiny after Singapore uncovered the most important money laundering case within the country’s history, resulting in the arrest of 10 foreign nationals and the seizure of greater than three billion Singapore dollars (US$2.2 billion) in assets.
Six single-family office funds that receive tax breaks for his or her activities in Singapore are linked to individuals involved in the cash laundering scandal. accordingly Deputy Prime Minister, Gan Kim Yong.
The government canceled the tax advantages within the fiscal yr by which the owners or their spouses were charged or convicted, Gan said in a printed statement Tuesday. Singapore’s Deputy Prime Minister also noted that the entire value of confiscated assets far exceeds the worth of tax advantages.
Why are family offices going to Singapore?
Family offices manage the assets of very wealthy families, either individually or as a part of a bunch. Such offices normally operate discreetly to shield these families’ assets from the general public.
To encourage family offices to settle in town, offers tax advantages if these family offices meet certain requirements, akin to local investments or philanthropic activities.
But other aspects are also contributing to family offices coming to Singapore. The country’s “predictable legal and political system offers investors the stability they crave,” says Brendan Foo, co-founder of business intelligence service Forward Risk.
Vistra, a business services provider, highlighted Singapore’s well-developed financial and skilled services sectors, international connectivity, and powerful healthcare and education systems as reasons for town’s attractiveness to family offices in an August issue. report.
Singapore also benefited from missteps by other financial centers within the region. “Former rivals like Hong Kong have lost their shine in dramatic ways,” says Foo.
In March 2019, the Monetary Authority of Singapore, the city-state’s central bank and integrated financial regulator, and the Economic Development Board, a government agency working to extend Singapore’s attractiveness to global businesses,, together established a Family office development team.
After the cash laundering case became known in August in December said that a thriving family office sector could create jobs and capital for businesses. To qualify for tax relief, offices would have to fulfill local employment and spending requirements.
A money laundering scandal value billions
In August last yr, Singapore arrested 10 foreign nationals, most of them of Chinese descent but with multiple nationalities, in simultaneous raids across the country. The government seized billions of dollars value of assets, including luxury properties, cars and gold bars.
Ore Huiying – Bloomberg via Getty Images
The ten arrested were accused of, amongst other things, forgery, money laundering of profits from organized crime and participation in illegal online gambling activities against individuals in China.
The scandal also entangled Real estate agents and a number of other banks. Further investigations are currently underway against 17 other suspects who should not currently in Singapore.
None of the people arrested were on Interpol’s Red Notice List once they applied for a visa to enter Singapore. claims Deputy Home Minister Josephine Teo in October.
Since the scandal emerged, the authorities have stepped up their Test the financial sector, for instance by expanding the scope of due diligence audits.
On Tuesday, the federal government Legislative proposals This will allow authorities to prosecute criminals for money laundering without there being a direct link between the ill-gotten gains and the unique crime. The bill may even allow officials to research money laundering related to environmental crimes in other jurisdictions.
The additional scrutiny is discouraging some once-eager investors who desired to settle in Singapore. Due to bureaucratic delays, some Chinese families are allegedly turn their attention back to Hong Kong.
