Singapore’s Tougher Anti-Money Laundering Measures Prompt Wealthy Chinese to Shift Focus to Hong Kong

SINGAPORE: As Singapore tightens anti-money laundering regulations following a recent $3 billion scandal, Hong Kong has become an appealing alternative for high-net-worth individuals (HNWIs) from mainland China. This shift marks a reversal from recent years when political concerns and strict regulations pushed many to move their wealth to Singapore.

According to The Edge Singapore, data from New World Wealth and Henley & Partners suggests that around 200 HNWIs are anticipated to relocate to Hong Kong this year, drawn by newly introduced tax incentives and residency programs tailored for family offices.

Hong Kong’s financial landscape is experiencing a resurgence, with assets under management reaching HK$31 trillion (S$5.36 trillion) in 2023, buoyed by a strong private banking sector and a significant rise in net fund inflows. Private bankers cite the city’s geographic advantages and improved business environment since the border reopened in 2023 as reasons for its renewed appeal. Efforts like the 2022 top talent visa program have also proved successful, with over 68,000 approvals, primarily for mainland Chinese applicants.

Meanwhile, Singapore’s updated anti-money laundering efforts include a digital customer information-sharing platform launched by the Monetary Authority of Singapore, which has received mixed reactions from clients and bankers due to intensified scrutiny of Chinese wealth. Professor Zhiwu Chen from the University of Hong Kong explains that “mainland billionaires, wary of government checks or threats to their personal wealth, initially looked to Singapore to manage their finances outside China. With Singapore increasing scrutiny, Hong Kong is becoming a more attractive option.”

Hong Kong private banks are now experiencing growth in contrast to Singapore. Insurance products favored by wealthy Chinese saw a 63% sales surge in Hong Kong in the first quarter of this year. However, challenges remain, including limited offshore wealth mobility and a slow IPO market.

With over 340 applications since March, Hong Kong’s new residency program for investors committing HK$30 million or more is projected to generate over HK$10 billion, according to Financial Secretary Paul Chan. Despite these gains, Henley & Partners estimates that Singapore remains the third most popular destination globally for relocating millionaires, expected to attract 3,500 HNWIs this year.