Hong Kong and Singapore's Battle to Dominate the Family Office Sphere

In the high-stakes world of family office management, a potent contest is brewing. Two of Asia's financial hubs, Hong Kong and Singapore, are vying to become the go-to destination for the world's Ultra-High-Net-Worth-Individuals (UHNWIs) to park their wealth.

Family offices — private wealth management advisory firms catering to billionaires and their families — provide a comprehensive suite of services, from financial planning, investment management, and tax accounting to legal consultation and lifestyle management.

The Singapore Advantage

Singapore's status as a tech hub, combined with its legal system, investment environment, and livability factors, are all critical considerations. A safe jurisdiction with a robust rule of law, Singapore provides easy access to global and regional markets. It has positioned itself as an offshore asset management center, offering benefits including freedom of capital movement, tax benefits to offshore companies, and a low corporate tax rate.

This approach has attracted tech-savvy younger UHNWIs keen on investing in tech sectors. The family office boom in Singapore has been remarkable — from 400 at the end of 2020 to 1,100 by 2022. The Monetary Authority of Singapore recently announced plans to adjust this tax benefit to encourage more philanthropic activities and local investments.

Hong Kong's Counterplay

Hong Kong is not resting on its laurels. The government has rolled out a series of incentives, including tax exemptions for qualifying family offices managing family assets in Hong Kong, with an asset threshold of HK$240 million. At the end of 2020, Hong Kong managed wealth worth USD 1 trillion, more than Singapore's USD 790 billion.

The government formally launched a network for family office service providers and aims to help establish at least 200 family offices in Hong Kong by 2025, collaborating with teams from professional service sectors including banking to jointly promote Hong Kong's diverse opportunities to global family offices.

Room for Both?

Industry insiders argue that there is room for both Hong Kong and Singapore in this arena. Family offices can invest in both regions — choosing Hong Kong for Greater China and Singapore for Southeast Asia. The rapid growth in the Asia-Pacific region, which saw a 44% increase in family offices resulting in 1,300 offices, underscores Asia's emerging influence in global wealth management. Both city-states set the stage for a compelling showdown in attracting the world's wealthiest families.