Wealthy are flocking back into HK

Hong Kong is winning back wealthy Chinese by rolling out the red carpet for the rich while rival Singapore scrutinizes foreign money.

Hong Kong is expected to welcome about 200 high-net worth individuals this year after five years of millionaires skipping town, according to data provided by intelligence firm New World Wealth and immigration consultancy Henley and Partners, thanks to initiatives including family office tax concessions and visa and residency programs.

At the same time, fallout from a blockbuster S$3 billion (HK$17.36 billion) money laundering case has put Singapore's family offices and wealthy immigrants under the microscope.

Hong Kong's population of millionaires is finally forecast to rebound after losing about 500 to migration in 2023, according to Andrew Amoils, head of research at New World Wealth, Henley's research partner.

"Despite a tough past decade, Hong Kong is still one of the world's top millionaire hubs," said Amoils. There is "definitely a turnaround there," he said.

It is a shift from the pandemic years when Hong Kong's strict quarantine and political upheaval led to mainlanders flocking to Singapore. Now, private bankers, service providers and insurers are saying Hong Kong business is picking up, while Singapore's stepped-up money laundering rules are putting some customers off.

Hong Kong's assets under management grew 2.1 percent to HK$31 trillion in 2023. Driven by a strong performance of private banking and wealth management, net fund inflows jumped more than three times to nearly HK$390 billion last year, Financial Secretary Paul Chan Mo-po has said. In 2022, private banking and wealth fund inflows slumped about 80 percent.

In Singapore, the fallout from the money-laundering case means some banks are redoing their know-your-customer process, and rich Chinese in Singapore are under a microscope, according to two private bankers.

Their clients are frustrated with the process and the questions being asked, they said.

Zhiwu Chen, finance professor at University of Hong Kong, said he knows billionaires who have "warmed up" to basing their family office business in Hong Kong as their enthusiasm for Singapore has waned.

In Hong Kong, business at the China desks of private banks has picked up while the pace of growth at the same groups in Singapore has slowed, meaning less money is moving to Singapore, according to two private bankers.

Hong Kong has benefited from the reopening of its borders in 2023. The city has also efficient connections to Shenzhen and the surrounding Greater Bay Area.

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