Asia has been at the forefront of wealth creation in the last few decades. Spearheaded by China open-door policy in 1978, the number of billionaires in Asia surpassed the United States for the first time in 2016, and the majority of those are creators of first-generation wealth.
This means that Asia will see one of the largest wealth transfers from the first generation to the next in the next decade. Two of the richest men in Asia, Mr Li Ka-Shing and Mr Stanley Ho, both announced their retirement earlier this year and that they were passing on their business empires to their children.
Therefore, succession planning and family governance are among the top priorities of wealthy Asian families. To ensure a smooth transition of family wealth, a growing number of wealthy families in Asia are setting up family offices to serve as their focal point in the management of the family’s assets and investments.
A family office is a private and independent wealth management firm set up by the family to oversee the day-to-day administration and to provide a 360-management of the family’s assets.
The main goal is to protect, grow and transfer their wealth on to the next generation and generations to come.
On top of asset and wealth management, the family office also works with other specialists to provide advice on matters such as legal and tax advisory, family trust, insurance policies, property and estate management, or even educational programmes for young children and other lifestyle services such as purchase of private jets and yacht, provision of high-end medical services etc. It is often joked that a family office knows where to get the best manicure, pedicure and spa services, even for the pets of the family.
In layman terms, a family office is a high-end butler providing one-stop shop to solve all the needs of the family with a focus on the long term for the benefit of future generations.
Raffles Family Office is a multi-family office and the name of the holding company of these four entities:
1) Raffles Assets Management (HK) Limited, which provides External Asset Management (EAM) services on private banks with open architecture platform in Hong Kong, Singapore and Switzerland.
2) Raffles Capital Holdings Limited, which provides insurance brokerage services of both onshore insurance companies in Hong Kong as well as offshore insurance companies which specialise in Universal Life and Private Placement Life Insurance policies.
3) Raffles Properties Limited, which provides sale of high-end residential and commercial properties in Hong Kong.
4) Raffles Corporate Services Limited, which provides incorporation of companies in offshore jurisdictions such as Singapore, Labuan, Seychelles, Cayman and BVI.
When the Trump-Kim summit was finalised, Singapore emerged as the natural choice on security and neutrality ground. Owing to the requests of our existing clients, Singapore was indicated to be their preferred choice for setting up family office. Ultra-High Net Worth Individuals (UHNWIs) in China have a new focus on the investment side due to unfavourable government policies, a slowdown in the economy and a depreciating currency. What they want now is to protect and transfer their wealth.
The choice of location to set up a family office has a significance. It is not simply choosing a location for asset and wealth management, but also a place where the interests of the family can be best served and safeguarded.
As a former British colony, Singapore adopts the Common Law, hence the legal and regulatory frameworks are clear and stable with a well-respected judiciary. In this aspect, Singapore ranks top in Asia and the 13th best worldwide according to the most recent World Justice Project.
Singapore is an independent country, politically stable and the government has consistently adopted a very pro-business stance in its policies. According to World Bank’s annual ranking, Singapore is ranked the easiest country in the world to do business in 2018.
The government is also keen to attract (wealthy) foreign investors and the Economic Development Board (EDB) and the Monetary Authority of Singapore (MAS) are both actively looking at ways to continue drawing wealthy investors to the country. For example, wealthy families can take up the Global Investor Programme (GIP) administered by the EDB which gives them permanent residency status in Singapore. To qualify, the UHNW has to start a family office with an Asset under Management (AUM) of at least S$200 million.
At the same time, Singapore has been ranked as the most liveable city in Asia and the Singapore education system has been ranking consistently near the top by OECD in the world.
Already having one of the most favourable tax scheme in the world, Singapore has also various tax incentive schemes that are attractive for the setting up of family offices there. For instance, tax exemptions on specified gains from the funds managed by family offices for both offshore and onshore Special Purpose Vehicles (SPV).
Singapore has a comprehensive network of more than 90 Double Taxation Agreements (DTAs) including China and India, two of the largest and booming economy of the world. These DTAs reduce or even exempt certain types of income and would be attractive to families with cross-border family business enterprise.
Since its founding in 1819 by none other than the namesake of our company, Sir Stamford Raffles, the British used Singapore as its crown jewel as a gateway between Asia and Europe. Singapore has a well-established and booming business hub which is often used as a gateway by companies wanting to gain access to Southeast Asia and Asia.
Singapore Changi Airport is one of the busiest in the world and it has directly flights to more than 100 cities in the world. Specifically to our clients in the mainland China, it has no time difference, is only between 4 to 6 hours flight away between Singapore and first- and second-tier cities, and 75% of the population speaks Mandarin as second language.
Singapore marks the first overseas foray for Raffles Family Office. Besides Singapore, Raffles will also set up a representative office in Zurich and Taipei in 2019. In this globalised and inter-connected world, it is not about choosing this or that, but about having a full array of choices, this is precisely what the UHWIs and Families are looking for and we are ready for it.