When looking for an offshore business center, it may surprise some people that Singapore is fast becoming the number one place to start up a company. Foreigners from the USA, Great Britain, Australia, and other countries are coming to register their business in Singapore due to the incentives the Singapore government provides to entrepreneurs coming to the company to start a business. Singapore recently revamped its immigration policy, to easily allow foreign businesspeople into the country if they plan on company setup there. In addition, for registering the company with the government, each individual company is eligible for up to 30 grants provided by the government; grants that can be up to $200,000 in extra funding. Because of this reason, the small Asian nation is becoming wildly attractive to young start up entrepreneurs in order to access the Singapore business registration and that additional funding.
This growth in assets due to all the international companies happened fast for the country, as in 2000, Singapore had just over $50 billion of assets under management, compared to $550 billion in 2011. Many investors and economy and business insiders are now predicting that by 2020, Singapore, due to its laws designed to promote offshore business, will overtake Switzerland as the number one offshore provider of wealth. Switzerland currently holds the title, with over 80% of its assets coming from offshore clientele. The United Kingdom and Channel Islands currently hold the third spot, with $1.8 trillion coming from offshore clients.
In addition to the offshore business, Singapore is attractive for the wealthy to move their funds to avoid taxation. While the wealth management industry is about $19 trillion globally, about $8.3 trillion of that is in offshore accounts, and Switzerland holds $2.8 trillion at least. Due to crackdowns on offshore accounts to combat terrorism and crime in Switzerland, Luxembourg, and the Caribbean, many of the rich are moving their accounts to Singapore. While Singapore has a well developed banking system, the lack of oversight does allow corrupt leaders and criminals to stash their funds there as well.
It isn’t just funds that are moving there—many wealthy people are immigrating to the country as well, with many tycoons buying up property in the cities. Because of the wealth and high-profile immigrants, Singapore’s economy has swelled in recent years. It is estimated that around 300,000 have immigrated to the country to work or do to lower taxation rates. Because of its proximity to China, Japan, and Australia, Singapore is becoming a major hub for business and wealth in South Asia. More and more companies are setting up shop in the financial center to take advantage of that. With financial services making up more than 12 percent of Singapore’s GDP, and having some of the lowest tax rates in the world, it doesn’t look like Singapore’s expansion as an offshore wealth holding center will change soon. While it is predicted that Singapore might soon become one of the wealthiest states in the world, the problems Switzerland faced with increasing pressure from other countries about private banking accounts might threaten that title.