Could MHA have underestimated the influx of ultra-wealthy families into Singapore?

Could MHA have underestimated the influx of ultra-wealthy families into Singapore?

Earlier, Singapore’s Chinese-language daily Lianhe Zaobao reported that the city state is set to attract nearly 3,500 wealthy individuals with a net worth exceeding US$1 million to become citizens this year.

Andrew Amoils, Head of Research at New World Wealth and is affiliated with London-based investment migration consultancy Henly & Partners, noted that while it remains uncertain how much wealth these new citizens will bring, each of them has an average investable wealth of at least six million US dollars.

Amoils stated that between 3,000 to 3,500 high-net-worth individuals (HNWIs) are expected to become Singapore citizens in 2023, with most of them being wealthy individuals from China.

Henley & Partners also published the “2022 Global Citizenship Report,” revealing that last year, Singapore added 2,800 HNWIs, reaching a total of 241,000, and ranked fifth among the top 20 cities with the most millionaires in the world.

MHA refuted the claims as “misleading”, clarified that high net worth does not automatically guarantee Singaporean citizenship

On Tuesday (25 Apr), Singapore’s Ministry of Home Affairs (MHA) has dismissed these claims, stating that the cited figures originated from a private research firm based in Johannesburg, South Africa.

The ministry expressed uncertainty regarding the methodology used to arrive at these numbers and emphasized that Singapore citizenship applications for the remainder of 2023 are still pending.

Describing the report as “highly misleading” and lacking a credible foundation, the MHA clarified that a high net worth does not automatically guarantee Singaporean citizenship.

The ministry highlighted that numerous factors contribute to the citizenship decision-making process, such as potential benefits to Singapore, business ventures established within the country, and the employment of Singaporean citizens.

Furthermore, the MHA will assess an applicant’s capacity for social integration and commitment to establishing roots within Singapore.

Influx of ultra-wealthy families from overseas

However, as the Singapore government has granted an average of 22,100 new citizenships over the past five years, it is unclear whether the 3,500 HNWIs with assets worth at least one million dollars will be among the applicants considered for citizenship this year.

Nonetheless, Andrew Amoils may have offered a more conservative estimate regarding the number of HNWIs interested in moving to Singapore.

Multiple reports from international news agencies have highlighted the influx of ultra-wealthy families from overseas, particularly from China, to Singapore.

There are also several indicators that suggest the impact of the influx of these HNWIs on the local economy, such as the rising demand and property values.

For examples, the price of golf memberships for expats at the exclusive Sentosa Golf Club surged last year to S$840,000 as more Chinese join.

Singapore’s real estate market has defied a global slump as newcomers snap up luxury condos, driving prices higher for 12 straight quarters.

Bloomberg reported that although family office assets at Singapore’s banks are increasing, little of that cash is being invested in local capital markets, which would create the jobs necessary to generate the fees needed to sustain the financial sector.

Amoils has stated that Singapore is emerging as Asia’s top wealth management centre, which should assist in “attracting many more affluent individuals to relocate there in future.”

Singapore granted around 23,100 new citizenships last year

In 2022, Singapore granted around 23,100 new citizenships, with 1,300 going to children born overseas to Singaporean parents.

During the February Parliament sitting, Indranee Rajah, Minister in the Prime Minister’s Office stated that around 34,500 new permanent residencies were granted in Singapore last year.

These figures were slightly higher than those in 2019, before the COVID-19 pandemic.

In 2019, Singapore granted 22,714 citizenships and 32,915 permanent residencies.

The processes only delayed during pandemic in 2020 and 2021, as travel restrictions and safe management measures prevented some approved applicants from completing the necessary requirements to submit their application.

Ms Indranee said Singapore needs to welcome immigrants to moderate population as total fertility rate hits record low of 1.05 in 2022

Ms Indranee who is also Second Minister for Finance and National Development, stressed that welcoming immigrants to Singapore play an important part in moderating the impact of an ageing population and low birth rates.

Singapore’s resident total fertility rate in 2022 hit a new low of 1.05, which was lower than the previous records of 1.1 in 2020 and 1.12 in 2021.

Since 2017, Singapore’s figure has remained below 1.2.

Ms Indranee highlighted that the total fertility rate has been declining for several years in Singapore, like other advanced societies, and it refers to the average number of live-births each woman would have during her reproductive years.

She said societal trends indicate that more people in Singapore are postponing marriage, delaying having children, or having fewer children, in line with longer-term global trends.

Additionally, around one in four Singapore citizens will be aged 65 and above by 2030, making it increasingly challenging to sustain economic growth as the resident workforce increases at a slower rate.

“While most Singaporeans understand why we need immigrants, there are, understandably, concerns over competition for jobs and other resources, and how the texture and character of our society could change, and whether our infrastructure can keep up,” Ms Indranee told Parliament.

“Since the tightening of our immigration framework in late 2009, we have maintained a measured and stable pace of immigration.”

Singapore evaluates a “comprehensive set of factors” when granting citizenship, said Indranee

She also emphasized the need for Singapore to remain open to foreign manpower to address skills shortages and enhance the economy’s productive capacity.

When considering citizenship or PR status, Ms Indranee said Singapore evaluates a “comprehensive set of factors” including family ties to Singaporeans, economic contributions, qualifications, family profile, age, and length of stay in the country.

“This ensures that new immigrants are rooted, able to integrate and contribute meaningfully here,” she added.

PM Lee once said he would persuade 10 more billionaires to move to Singapore even if that worsened income inequality

Back in July 2013, Singapore Prime Minister Lee Hsien Loong, said that if he could persuade 10 more billionaires to move to Singapore, he would, even if that worsened income inequality.

he said, “because [billionaires] bring business, they will bring new opportunities, they will open new doors, they will create new jobs”.

Mr. Lee, responding to DBS Group Holdings Chief Executive Piyush Gupta’s remarks at DBS Asia Leadership Dialogue, stated that income inequality is one of the major challenges many countries are currently facing. However, he also emphasised that this does not mean sacrificing economic growth.

“If the economy was stagnant, it doesn’t mean everybody’s going to be happy, and it may be equally unequal,” he said

PM Lee added that part of the answer has to be in raising the education and skills of Singaporeans so that they can improve their standard of living.

He said while he cannot make everybody a billionaire, but he can make sure everybody can earn a good living for himself.

“I think that’s possible. But it takes effort and you have to be competitive.”

Mr Lee cited the Government’s investments in various measures, including infrastructure and subsidies for less well-off Singaporeans in healthcare and education, among other things. He said that these measures would not result in a society where everyone is absolutely equal.

He said: “I don’t think it will make us a society where everybody is absolutely equal.”

“In fact, if I can get another 10 billionaires to move to Singapore and set up their base here, my Gini coefficient will get worse but I think Singaporeans will be better off, because they will bring in business, bring in opportunities, open new doors and create new jobs, and I think that is the attitude with which we must approach this problem.”

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