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Appeal of Singapore

glengoolie

glengoolie

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Mar 30, 2021
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#1
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I wonder what is the appeal of Singapore these days. Beside territorial tax system, I think there are much better and cheaper countries/jurisdictions in which to incorporate, live or bank.

Is Singapore's popularity just a remnant of its former glory days as shining beacon of capitalism or is there still something that makes it better than other places?
 
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#2
For someone living in China or Far East it has an appeal as a stable tax haven. I know there was talk of some wealthy Hong Kongers moving assets to Singapore and maybe obtaining residency there also. It still has more of an appeal for me than Switzerland for booking assets as a solid financial center.
 
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#4
glengoolie said:
can you elaborate on that?
Click to expand...

It is how one places certain assets. For example when you are with a private bank they can book your assets (split your assets) over different jurisdictions but yet provide a single point of contact. You can for example ask them to put your stocks in a Singapore trust managed out of Singapore while you place your bonds in Switzerland and your cash in a Jersey Foundation etc.
 
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#6
• For many years, Singapore has been Asia’s most mature and respected wealth management centre, benefitting from international clients (representing about 80 % of AMA) who value its stable environment. Singapore’s regulatory regime (one of the world’s most prudent) causes a high level of stability which, in turn, supports growth; measures by the authorities to ease ways of doing business, together with low tax rates, additionally attract clients.

• As a result, the Singapore wealth management clientele is – in comparison to other Asian locations – particularly international: The centre attracts significant funds from Europe and North America (17 % and 19 %, respectively, of total AMA) and is a prime location for clients throughout the Asia-Pacific region.

• Covering such diverse markets, however, requires major efforts from both compliance and offering perspectives, and the centre’s average cost margin is the third-highest (66bps in 2017E). Meanwhile, cost margins have increased at a CAGR of only 0.3 % in recent years, which exemplifies Singapore’s maturity with regard to infrastructure and regulation.

• Some reasons for the high costs are: heavy investment by banks in the capabilities to serve clients digitally, and typical drawbacks of a mature sovereign microstate such as high prices and limited pools for talent and real estate.

• On the revenue side, Singaporean banks have achieved the second-highest margin among the wealth centres (92bps in 2017E, with CAGR of 1.5 % in the revenue margin 2013–2017E). A noteworthy driver is the comparatively good capitalisation of the local banks – their capital provides room for investment and, therewith, growth.

• Singapore has managed to capitalise on its yet unmatched reputation – in Asia – as a stable wealth management hub, enabling the centre to expand following the strong local (U) HNI wealth growth (14 % in APAC, compared to 1 % in the rest of the world). Clients have become acquainted with private bank offerings and now demand more sophisticated, higher-margin services (illustrated by a growth of 9 % in discretionary mandate volume in 2016), and they are willing to pay a price premium for the capabilities that Singapore offers.
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from The Deloitte International Wealth Management Centre Ranking
 
#7
* Ultra solid banks, probably the best in the world
* You get access to RETAIL banks at RETAIL price. Of course if you're a non-resident, you will need to pay 200-300k deposit but it's still much lower min dep and much cheaper than all Swiss banks. And safer too. Try to do frequent transactions with a Swiss bank and see what they think about it.
* Singapore has very low debt %, it's actually a SOLVENT country
* Very strong rule of law
* Great place to live if you are a fund manager, seems many of them live there
* Great school system, arguably the best in the world
* Zero corruption (apparently)

The cons are that it's hard to get citizenship, or PR, real estate is extremely expensive, and it's slightly totalitarian with all their fines and rules and laws.
 
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#8
I would add as I lived there nearly 4 years:
+ great public transportation system and MTR, you really don't need a car in SG and taxis are reasonably priced
+ very good Asian food, cheap food courts and restaurants or sushi chains
+ transparent rules and regulations for both individuals and companies on GOV websites
+ money that always look as new - they don't tear :)
+ walk friendly both over and underground
+ FAST and cheap home internet e.g. 1 Gbps for €25 per month.

- time zone if you are into watching live football. Champions League or EPL games at 3 or 4AM...
- properties are expensive. 2BR upscale property in city center with private lift, shared pool but quite tiny overall cost €55.000 p.a. + utilities. Most properties have absolutely useless "bay windows" (only saw them in SG really, looks like some development SCAM ...) which makes the room even smaller than what they really are.
- Good restaurants are expensive
- groceries are very expensive if you are into European food, cheeses etc. Alcohol is highly taxed and very expensive as well.
- not really a beach destination, the sea is not swimmable
- the weather is pretty much always the same, hot and humid 30 degrees (feel hotter due to humidity). I prefer UAE weather, at least there are few months of winter relief.

Now for €55k in UAE you can get luxurious 4BR villa with private pool 5 mins from JBR / Marina or 3BR luxury apartment with full Dubai Marina view.
 
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#13
maxmmm said:
* Singapore has very low debt %, it's actually a SOLVENT country
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Actually, I was quite surprised to read this about Singapore recently, but I verified it as true:
Japan and many European countries, (and strangely, Singapore) are all running debt-to-GDP ratios higher than the US is today.
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https://www.mauldineconomics.com/frontlinethoughts/broken-debt
Singapore's debt-to-GDP ratio was 131.19% in 2020, after steadily rising from 108.4% in 2017. This compares to about 105% for the U.S. and less than 50% for Switzerland. Considering this level of debt and Singapore's proximity to China, I am not sure why anyone would choose Singapore over Switzerland for banking, at least for the safety of HWI deposits and wealth management. Even for the storage of precious metals, it only ranks third or fourth on the list (largely because of its proximity to China).
 
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#15
Golden Fleece said:
Actually, I was quite surprised to read this about Singapore recently, but I verified it as true:

https://www.mauldineconomics.com/frontlinethoughts/broken-debt
Singapore's debt-to-GDP ratio was 131.19% in 2020, after steadily rising from 108.4% in 2017. This compares to about 105% for the U.S. and less than 50% for Switzerland. Considering this level of debt and Singapore's proximity to China, I am not sure why anyone would choose Singapore over Switzerland for banking, at least for the safety of HWI deposits and wealth management. Even for the storage of precious metals, it only ranks third or fourth on the list (largely because of its proximity to China).
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This number is misleading as it doesn't take into account the assets of the country.

"Gross Debt

2.5 The gross debt-to-GDP ratio is a measure of a country’s debt compared to its
economic output. Some international reports list Singapore as having high levels of
Government debt. These include the CIA Public Debt Factbook and the World Economic
Forum. However, this does not mean that Singapore is not fiscally sustainable. For
Singapore, the use of gross debt figures does not provide a meaningful indicator of the
country’s fiscal strengths.
2.6 For example, the level of Government debt outstanding at S$562b (March 2019)
or 114% of Gross Domestic Product (GDP)9 appears large on its own. However, the gross
debt-to-GDP ratio does not take into account the Government’s sizeable asset position,
which exceeds its liabilities.

Net Debt

2.7 The Singapore Government has a strong balance sheet, with assets well in
excess of its liabilities (i.e. no net debt). This can be seen from the investment returns
that are made available for spending on the Government Budget – or Net Investment
Returns Contribution (NIRC)10. Under the NIR framework, up to 50% of the long-term
expected returns earned on the net assets (i.e. assets net of liabilities) are available for
spending. The NIRC of about S$16 billion taken into the Government’s budget in Fiscal
year 2018 for spending means that even after deducting all the Government’s liabilities
(including CPF monies), the remaining net assets are sizeable, and they are expected to
generate significant investment returns. If the Government’s assets had not been
adequate to meet its liabilities, there would be no contribution from the investment
returns on net assets in the Government Budget."

Source:
https://www.mof.gov.sg/docs/default...ts/understanding-singapore-govt-borrowing.pdf
Same is written here in simpler terms:
https://commodity.com/data/singapore/debt-clock/
P.S. this site you quoted - Mauldin Economics - is a well known stock newsletter pusher, selling s**t like "Biotech Millionaire" Biotech Millionaire - Premium Alert Service - Mauldin Economics
So I would take anything his team of writers spew out with a grain of salt.

P.S.S. Debt to GDP doesn't really matter for comparison as neither Switzerland nor Singapore are going bankrupt any time soon.
As for proximity to China, this century looks so far like it is China's century. Any country that can profit from that by managing the wealth of the Chinese should do very well...
 
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#16
maxmmm said:
As for proximity to China, this century looks so far like it is China's century. Any country that can profit from that by managing the wealth of the Chinese should do very well...
Click to expand...
What I meant was that China's malign influence extends beyond its mainland, with an invasion of Tibet and a continual threat of an invasion of Taiwan. For example, there are now almost daily incursions by Chinese aircraft into Taiwan's air defense zone. At this moment, China's first aircraft carrier and its support ships are circling around Taiwan. China has tightened its grip on Hong Kong, trying to decapitate the democracy movement there. It enslaves much of its its population and keeps millions of people in concentration camps.

As China grows in economic and military strength, so will its malign influence. Will it invade Singapore one day -- or simply make it a vassal state? Who knows. But I would not want to store precious metals there. Banking might be okay in the short-term, providing that you establish a fast-action backup plan for your money.

Before anyone criticizes this analysis, just remember that before a year ago no one thought that China would kill the golden goose of Honk Kong, one of the premier commerce centers in the world. Chinese communists do not think like Westerners, so anything is possible -- even great atrocities.
 
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#18
EuroKiss said:
Are you talking about the invasion of Afghanistan or the other half million of civilians exterminated by the US in the Irak? Or maybe the humanitarian disaster created by France, UK and the Noble prize in Libya?
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We are talking about banking here. I doubt that anyone here is keeping their money in satellite nations of Libya and Afghanistan. If they are, then the same analysis applies.
 
#20
EuroKiss said:
No, you talked about how morally f*ck’d are people that put money too close to China.
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I did not say that at all. I suggest that you go back and re-read my post.

BTW: That is the purpose of the reply button, so that you can quote exactly what I said.
 
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