Did you know Singapore actually has one of the lowest personal income tax rates in the world?
There’s the rich. Then there’s the crazy rich. Singapore’s already known to be the most expensive city in the world, but it doesn’t seem to affect its people that much, because so many of them are ultra high net worth individuals.
CNN reported that by 2020, Singapore will have 188,000 millionaires. That is one millionaire for every 30 Singaporeans. With a population of only 5.6 million, that’s quite a substantial number of millionaires in one city.
But beyond just millionaires, the number of Singapore’s ultra-wealthy or ultra high net worth individuals (individuals with at least US$50 mil or S$65.8 mil in net assets) is growing too.
In 2016, Singapore had 1,190 ultra-wealthy individuals. In 2017, that number grew by 18% to 1,400, according to the Knight Frank 2018 Wealth Report. This number is expected grow by 11% to 1,550 in 2022.
Singapore also holds the title of the wealthiest city in Asia, beating out Tokyo and Hong Kong, with both countries at eighth and ninth place respectively. It also ranks as the fifth richest city in the world, tied with Chicago.
The index aggregates scores according to metrics such as wealth population and its rate of growth, property investments worth at least US$10 million, lifestyle, and future economic performance.
Singapore ranked highly on the lifestyle element, which includes components such as the number of luxury hotels, number and quality of top restaurants.
Globally, the number of ultra-wealthy individuals rose by 10 percent year-on-year to 11,630, taking the overall population to 129,730.
To date, Singapore’s richest individuals are brothers Robert and Philip Ng. The duo of Far East Organization has a net worth of US$10.8 billion.
Why is Singapore home to so many ultra high net worth individuals?
The tapestry of Singapore’s ultra-rich is interesting. On one hand, many self-made (or family) wealthy find their footing in Singapore, building up their wealth over time in their home country before branching out to the rest of the world.
But on the other hand, the ultra-rich, like Eduardo Saverin, choose to make Singapore home. Which begs the question: Is Singapore the ultimate playground for the ultra-rich?
Let’s take a look at why it is such a magnet for magnates.
1. Singapore is relatively politically stable
Hong Kong is another city that has a high concentration of ultra high net worth individuals (HNWI). But there is a growing sense of upheaval in Hong Kong, and the concern that its freedom may be eroding. This may, in turn, drive more of that wealth to Singapore.
2. The environment and infrastructure for private wealth management is extremely strong
Singapore is the fastest growing private wealth management hub in the world. The relative maturity of the Singaporean regulatory system makes it an attractive destination for overseas investors who want their accumulated wealth to be safe and well managed.
3. Singapore’s personal income tax rate is one of the lowest amongst developed nations
If it’s one thing we cannot avoid, it is taxes. For many, paying sky high taxes is something they want to avoid. Especially if their tax money isn’t being put to good use. For those who make over $320,000 annually, the personal income tax stands at 22 per cent in Singapore. This is low compared to other developed nations like Spain, Australia, Japan and Canada, where taxes can be as high as 49 per cent!
4. Singapore ranks one of the best places in the world for investment potential
According to the U.S. News & World Report, Singapore’s ranks in the top 5 in the world for its investment potential. This can be attributed to its strong gross domestic product per capita and low unemployment rate. It is one of the wealthiest nations in the world. But it has great investment potential because it provides easy access to capital and business practices in Singapore are transparent.