Singapore, Hong Kong woo family offices with different game plans
SINGAPORE: Singapore and long standing rival Hong Kong are fighting tooth and nail to attract family offices, but while they share the same goal, their game plans are quite different.

Hong Kong continues to roll out the red carpet for the world’s richest families whereas Singapore, which has grown in appeal due to tensions between the United States and China, has become more discerning about the quality of funds it seeks.

Keoy Soo Earn, Deloitte’s private leader for South-East Asia, noted: “Both cities offer distinct value propositions when setting up a family office.

“While Hong Kong’s focus on cost-competitiveness and ease of access to the Greater Bay Area are important to some, Singapore’s focus on developing a global family-office ecosystem might resonate with families seeking a comprehensive suite of services and experienced professionals with deep industry expertise.”

Lee Puay Khoon, a partner specialising in financial-services tax at professional services company PwC Singapore, said that Singapore continues to put in place policies to attract enterprises in strategic sectors and industries such as advanced manufacturing, high-tech, life sciences, intellectual property and financial services.

Hong Kong, which emerged later from the zero-Covid policy, is targeting recovery and growth.

Besides promoting its four main economic pillars of financial services, tourism, trading and logistics, and professional and producer services industries, Hong Kong is starting to diversify into other sectors such as innovation and technology, intellectual property, maritime and aviation, she added.

The budgets for the two financial centres in 2024 reflect their different approaches to attracting family offices and other funds.

Hong Kong Financial Secretary Paul Chan said in his budget speech on Feb 28 that the territory, which does not require pre-approval or registration for family offices to operate, would enhance measures aimed at such entities.

Hong Kong is also making it easier to obtain tax breaks.

The immediate advantage of the tax concession is that it applies automatically, provided the single family office (SFO), which provides investment services to members of the same family, meets the minimum criteria.

SFOs in Singapore seeking to benefit from similar tax concessions must seek approval from the Monetary Authority of Singapore first, and this takes time.

Hong Kong is also offering investment-based visas. It has reintroduced a Capital Investment Entrant Scheme to boost the talent pool and attract new capital.

The programme was introduced in 2003 and allowed foreign nationals to obtain Hong Kong residency through investment but was suspended in January 2015 due to concerns about the impact on the property market.

Under the new scheme, applicants will have to invest at least HK$30mil in the city’s technology and innovation sectors. They will be allowed to take their dependents to Hong Kong.

Plans are also under way to host more financial conferences to improve the city’s image and economic appeal.

It hosted its second invitation-only “Wealth for Good in Hong Kong” summit on March 27 for some of the world’s well-heeled.

Hong Kong had 2,703 single family offices as at Dec 31, 2023. Around a third of these manage more than US$100mil each in assets, according to Deloitte.

Hong Kong chief executive John Lee said the city aims to get at least 200 more of the world’s top family offices to set up or expand their operations in the city by 2025.

It will review the scope of its tax concessions regime and broaden qualifying transactions, among other measures, to attract more funds and family offices.

Singapore also continues to woo family offices even as it stresses a zero-tolerance stance on illicit funds. — The Straits Times/ANN
Investment
SINGAPORE: Singapore and long standing rival Hong Kong are fighting tooth and nail to attract family offices, but while they share the same goal, their game plans are quite different.