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Singapore is currently experiencing an influx of money.

According to the Financial Times, this is due to the country becoming the destination of choice for wealthy mainland Chinese who have decided to leave China following years of "political crackdowns, severe Covid lockdowns and unease about Beijing's global reputation."

In addition, many of them have also been shaken by China's growing political rhetoric about "common prosperity" and "going after the entrepreneurs", a former unnamed Singapore official was quoted as saying.

Many of these individuals are therefore reportedly seeking to become permanent residents here.

Why choose Singapore?

Vikna Rajah, the co-head of the private client business at law firm Rajah & Tann, said that part of this influx is due to the perception that Singapore is "extremely safe" with a strong rule of law, the Financial Times further reported.

Other factors include China being Singapore's largest trading partner, and more than three-quarters of the city-state's 5.3 million population being ethnically Chinese as of 2019.

In summing up the status of Singapore, the unnamed former Singapore official said that Singapore is "friendly enough" with China, on top of being culturally and geographically close.

"You can call it a ‘China plus one’ strategy. And we are the plus one," he said.

An unnamed multi-millionaire and long-time resident of Singapore also pointed out that hostility against China and racism against Chinese people is growing in the West.

"Singapore is the most Chinese place you can go to," he said.

Trend of turning to Singapore appears to have picked up after crackdown on education industry

Earlier in March, CNBC News reported that rich mainland Chinese have been looking for alternative locations to store their wealth following the 2019 protests in Hong Kong.

The protests made them reconsider the safety of storing their assets in the city, according to Ryan Lin, a director at Bayfront law, a firm in Singapore.

Firms in Singapore involved in helping the affluent Chinese move their assets here, through family offices, were further quoted as saying that this trend accelerated in 2021 following China's crackdown on the education industry and a greater emphasis by the Chinese government on "common prosperity", which broadly means moderate wealth for all, instead of just a few.

According to the South China Morning Post, China's "common prosperity" drive has included measures such as a 45 per cent tax on the year-end bonuses of the high-income middle class.

This tax will come into effect in 2023.

Such measures and rhetoric have stirred a sense of crisis and a need to relocate their wealth overseas, among the rich Chinese, SCMP further reported.

More than 500 High Net Worth individuals from China intend to relocate to Singapore

On Aug. 4, Lianhe Zaobao reported that there are over 500 High Net Worth (HNW) individuals from China who intend to relocate to Singapore, potentially bringing in about US$2.4 billion (S$3.3 billion) in wealth.

In response to a query from the Chinese daily, London-based investment migration consultancy Henley & Partners said that around 10,000 HNW individuals from China have been looking for opportunities to relocate this year.

Out of these 10,000 people, around 4,200 of them have already moved abroad between January and June this year, the consultancy added.

The consultancy was further quoted as saying that while it did not know how many of these 10,000 individuals will relocate to Singapore, the figure is expected to be more than 500.

According to Zaobao, an effect of this influx has been a rise in demand for property in Singapore from Chinese buyers.

In March, an entire floor of Suntec City Tower 2 was sold for S$38.8 million to a Singapore permanent resident of Chinese descent.

The same month also saw all 20 apartment units of an ultra-luxury condominium, Eden by Swire Properties, sold for S$293 million to a single buyer, believed to be a Chinese family.

In June, a buyer from China was reported to have bought 20 units at the luxury condominium CanningHill Piers, for over S$85 million.

According the Economic Development Board (EDB), 400 family offices had been set up in Singapore as of 2020. This is double the number in 2019.

Top photo by Hu Chen via Unsplash