With much of the world still reeling from the financial woes that have plagued banks and institutions for the past few years, wealthy individuals and those interested in wealth preservation have tilted their heads and made their way to Singapore, which now has the honour of having the largest amount of millionaires in the entire world per resident. With Europe and the United States hit hardest by the economic crisis, Singapore’s wealth management industry has gone from strength to strength.
Whilst Switzerland has come under fire and investigation for its secretive code of conduct, Singapore, which also has somewhat secretive policies, has managed to block itself from prying eyes. The type of citizen Singapore is becoming popular with is evident, Martin Schilte, a car salesman, told the New York Times: "If you look at the type of client we sell to, it's people with a net worth of $50 million-plus."
The government of Singapore has made waves in property development, building luxury homes that are successfully attracting affluent individuals and making it a centre for wealth. With the power players of Asian business ploughing billions into Singapore, its assets under management have soared to over $800 billion. With financial jobs being lost left, right and centre in New York and London, more and more high-powered banks, the likes of Credit Suisse and Macquarie Group, are employing wealth management staff within Singapore. Citigroup executive Deepak Sharma, in charge of global wealth management business outside the USA, said that Singapore: “has developed a lot and has all the ingredients to compete internationally”.
Singapore has strived to grow in the financial world so that it can be less dependent on its manufacturing industry. Singapore has a strong element of secrecy to its dealings, and is currently on a watch list of tax havens compiled by the International Monetary Fund and also has an eye cast towards its shores by the USA as they try to combat tax abuse. Sebastian Dovey, a financial expert at Scorpio Partnership, remarked: "It is interesting to notice a growth in the number of European clients booking wealth through Singapore, which unlike Switzerland does not recognize the European tax directive". However this could lead to increased scrutiny from the western world with America already asking Singapore to cut its financial connections with the military forces of Myanmar, who are thought to use Singapore’s offshore facilities. Speaking on the subject of tax haven scrutiny Lee Hsein Loong, the Prime Minister of Singapore, simply said: "I expect Singapore to come under pressure, too”.
The banks of Singapore have stated that the reasons for their secrecy are not of a nefarious nature and that information wanted in regards to criminal activities would always be given up. The fact that Singapore is an ally of the US military holds weight in its favour but OECD director of the Center for Tax Policy Administration Jeffrey Owens said: "Increasingly Singapore is looking out on a limb, It's for the Singapore government to assess how the political climate is changing to protect the reputation of the Singapore brand."