A study that draws on views of family office figures worldwide finds that the Asian city-state is the most favoured place as a jurisdiction in terms of wealth planning. But it is not all plain sailing, and Singapore has been tightening rules recently after an earlier heavy influx.

A global study of 309 family office managers puts Singapore at the top of the tree of jurisdictions favoured for wealth planning in the next three years. The study from Ocorian, a service provider to organisations such as family offices, drew views of people in nations including the US. 

The study did not, perhaps surprisingly, put the US in its top-12 list of jurisdictions as wealth planning destinations.

The report comes at a time when locations such as Singapore, Hong Kong, Switzerland and other places are competing to attract family offices and UHNW individuals. The US, because of its worldwide tax code, restricts the ability of expats to develop family offices abroad, although they can still operate overseas and do so to tap into investment opportunities. 

Singapore, the Cayman Islands and Hong Kong are the top three jurisdictions which are most likely to benefit from this increasing wealth over the next three years. Some 45 per cent of family office professionals think Singapore will see the biggest growth in family offices and businesses using them for wealth planning or structuring their wealth over the next three years. This was followed by the Cayman Islands (41 per cent) and Hong Kong (32 per cent).

While Singapore has seen its profile as a family offices hub rise rapidly in recent years – and that sector is now maturing – Ocorian issued a warning shot.

“In Singapore, the regulatory environment is becoming increasingly stringent, particularly in areas such as anti-money laundering. This is making it much more challenging to open bank accounts, especially for clients from China,” Novia Lu, commercial director, APAC, said. “As a result, we’re advising many of our clients to consider opening accounts in Hong Kong or Switzerland first before pursuing Singapore, as the process in Singapore could take much longer. Many key intermediaries share this view and are giving the same advice.”

“Hong Kong is uniquely positioned in a sweet spot. We are observing a growing trend of Singaporean settlors establishing single-family offices in Hong Kong, treating it as an offshore jurisdiction. In some cases, this move is backed by Australian investment," Lu added.

“While Singapore remains a preferred choice for many Chinese clients, if conducting business there becomes too difficult, they will likely shift their focus to Hong Kong or the UAE. Additionally, for European high net worth individuals, the Cayman Islands remains an attractive option, and in Asia, the UAE and the UK are becoming increasingly popular; the UAE offers benefits like the golden visa, which requires minimal residency.”

Global study
The investment managers interviewed in July are collectively responsible for assets under management of around $155 billion and include 201 working for multi-family offices. 

Some 68 per cent of survey respondents said the value of their family office assets has increased during the past five years. Of these, 9 per cent say the value has increased dramatically. Just under a third (30 per cent) say the value has stayed the same and only 2 per cent say values have shrunk. And 92 per cent of those who have seen asset values increase expect even more growth over the next five years with 48 per cent expecting dramatic increases. 

The percentage of family office professionals who think a jurisdiction will see the largest growth in family offices using them for wealth planning in the next three years are: Singapore (45 per cent); Cayman Islands (41 per cent); Hong Kong (32 per cent); Jersey (29 per cent); the United Arab Emirates (26 per cent); the UK (22 per cent); Switzerland (21 per cent); Mauritius (21 per cent); Guernsey (19 per cent); the Isle of Man (18 per cent), and Bermuda (16 per cent).

Respondents said the top factor to consider when choosing a jurisdiction to structure wealth was the ability to manage costs, followed by cultural considerations and a transparent tax regime. This was followed by being fluent in the native language, having a better time zone, and political stability. The seventh to tenth ranked factors are international reputation, infrastructure and expertise, common law jurisdiction and how accessible the jurisdiction is for travel.

The study interviewed family offices in Bahrain, Bermuda, Canada, France, Hong Kong, Nigeria, Saudi Arabia, Singapore, South Africa, the United Arab Emirates, the UK, the US, Cayman Islands, Egypt, Ethiopia, Germany, Ireland, Italy, Kenya, Spain, Sweden, Switzerland, Tunisia, Jersey and Guernsey.