Singapore ranks among the world’s wealthiest and most innovative cities. Despite its small size, it continues to attract foreign investors and remain a bustling global commercial hub. According to a recent survey, around 140,000 residents reached the millionaire bracket. Collectively, the locals of Singapore are among those with the highest living standards in the world.
Based on another survey, however, 84% of Singaporean millionaires believe they are living in the most unpredictable period in history. Though they confidently deal with such uncertainty, they also focus on keeping their wealth for their children and grandchildren.
But before we discuss further how the Singaporeans keep their wealth, let’ s talk about why Singapore is a magnet for the rich, including foreign investors.
What Factors Attract the Rich to Singapore
Singapore is the world’s best in grappling domestic security issues
Singapore may be a tiny country on the map, but the International Police Science Association ranks it number 1 in terms of dealing with internal security issues. To give you a background, a study by the Institute for Economics and Peace considered 16 indicators including the ratio of prisoners to official prison capacity, number of internal security, and police officers, etc.
Despite the continued rise of terrorism, domestic and transnational violence across the world, Singapore is unfazed as the local authorities developed efficient and effective systems to secure peace and stability in the country. Walk around some of the busiest corners of the city, and you will feel safe. The people themselves have made it a culture to do away with crimes and violence. That is why many Singaporean millionaires have a private vault at home.
Singapore’s income tax is one of the lowest among developed countries
It may seem unrealistic for a very prosperous city, but Singapore does have one of the lower personal income tax rates among the world’s developed nations. For those whose income bracket reaches $320 000 per annum, the personal income tax is only 22 percent.
That is way below to the whopping 49% deducted from the yearly income of residents in Spain, Australia, Japan, Canada, and many other developed countries. Of course, you may contend that these countries have better economic lives, subsidized education, and free healthcare, among others.
Singapore offers one of the best investment potentials
Singapore tops 49 other major investment destinations in terms of having the best investment potential. That is according to a US-based research institute called Business Environment Risk Intelligence(BERI) in its BERI Report 2015-I (April 2015). The ranking considered various factors, such as foreign exchange, politics, and operations.
There are also no barriers to capital import and profit repatriation. Because of that, Singapore’s ultra-rich continue to leverage intelligent investments to grow their wealth.Â
Singapore ranks high for the best quality of life
The cost of living in Singapore may be among the highest in the world, but that translates into better socio-economic services, higher income, and more job opportunities for the locals. In general, the quality of life here is better than in many other places across the globe. The EDB even ranks Singapore second best in Asia for living, working, and playing.
In the 2014 Mercer Survey, Quality of Living Worldwide City Rankings placed Singapore second best in terms of amenities, infrastructure, and environment including a stable political climate, efficient transportation system, and world-class healthcare.
Singapore’s Dilemma on Wealth Preservation
As mentioned in the previous paragraph, an overwhelming majority of Singaporean millionaires believe that the world is trailing on uncertainty. Most of them cite the risk of stronger trade blocks as one of the largest sources of domestic unpredictability.
To deal with these financial uncertainties, Singaporean millionaires puts a high level of trust in traditional media, with almost 80% mentioning that they trust newspapers. Nearly 90% of them also cite that they have strong confidence in their instinct. According to UBS Wealth Management, this is a positive trait that every investor must-have.
It is also important to note that while there may be trade uncertainties in Singapore, it remains a hub for wealth storage. Many of Hong Kong’s millionaires, for example, are transferring their wealth in Singapore given the ongoing mass protests.
How Singaporeans Keep/Preserve their Wealth
Given the uncertainties that they face, the Singaporeans adopted strategies to preserve their wealth without the risk of devaluation. Inflation is a considerable challenge for Singaporean’s wealthy people, but through systemic practices, they can outpace it and subsequently, boost their wealth.
In general, Singaporean millionaires diversify their portfolio to minimize risk. Today, the majority are investing in alternative platforms such as private equity and hedge funds. These expose them to more opportunities in wealth generation and preservation.
