India and China: High-Net-Worth Individuals Flock to Singapore and Hong Kong

In 2023, Indian high-net-worth individuals moved $130 billion to Singaporean family offices, making India the third-largest contributor in the Asia-Pacific after China ($400 billion) and Indonesia ($140 billion). Hong Kong also attracted $105 billion from Indian HNWIs. Singapore and Hong Kong’s tax benefits, skilled talent, and robust financial systems draw significant offshore wealth, collectively managing $1.3 trillion each. Asia-Pacific family offices differ from the West, emphasizing principal-led decisions and generational wealth transfer.

In 2023, India witnessed a significant migration of wealth as its high and ultra-high-net-worth individuals (HNWIs) shifted an estimated $130 billion in financial assets to family offices in Singapore. This development positioned India as the third-largest contributor of such funds to Singapore in the Asia-Pacific region, trailing only China, which transferred $400 billion, and Indonesia, with $140 billion, according to a recent McKinsey & Company report.

Hong Kong also emerged as a key destination, receiving $105 billion in assets from Indian family offices by the end of 2023. Indonesia followed with $70 billion, while Singapore accounted for $60 billion. Notably, China led the charge in Hong Kong as well, transferring a staggering $550 billion in financial assets. Collectively, Hong Kong and Singapore continue to attract a significant share of Asia’s offshore wealth, with Indian HNWIs contributing nearly 10% of the total assets parked in these two financial hubs. However, China maintained its dominance, holding a 40% share of the pie.

Why Singapore and Hong Kong Are Wealth Magnets

The growing appeal of Singapore and Hong Kong lies in their unique combination of tax incentives, transparent regulatory frameworks, developed financial ecosystems, and pathways for residency tailored to high-net-worth investors. These features, coupled with an abundant pool of skilled professionals, make the two city-states highly attractive for affluent families seeking to grow and manage their wealth offshore.

The Asia-Pacific region, as a whole, is a significant driver of wealth inflows into Singapore and Hong Kong. Together, these two financial hubs host approximately 15% of all single-family offices worldwide. In 2023 alone, each managed around $1.3 trillion in offshore assets, second only to Switzerland, which leads globally with $2.5 trillion in managed family office assets.

A Tale of Two Regions: Asia-Pacific vs. the West

McKinsey’s study underscores striking differences between family offices in Asia-Pacific and those in Europe and North America. Family offices in Asia-Pacific are a relatively recent phenomenon, with only 5% of the region’s ultra-high-net-worth individuals establishing single-family offices. By contrast, the West boasts a higher adoption rate, with 15% of ultra-wealthy individuals maintaining such entities.

The level of professionalisation and governance also sets these regions apart. Western family offices often operate with well-defined structures and cohesive strategies, while their Asia-Pacific counterparts tend to reflect the hands-on influence of their principals. This can sometimes lead to less streamlined decision-making processes.

Another key distinction lies in the generational dynamics of wealth. In Asia-Pacific, wealth is typically held by first- or second-generation family members, whereas in Europe and North America, wealth spans multiple generations. This generational difference influences investment strategies. Western family offices predominantly invest domestically or within their region, with growing interest in Asia-Pacific markets for diversification. Conversely, Asia-Pacific investors often pursue international opportunities, aligning with the global scope of their businesses.

As the Asia-Pacific region continues to witness a surge in wealth creation, the role of family offices in managing and preserving this wealth is set to grow. The contrasting approaches between Asia-Pacific and Western family offices highlight an evolving narrative of global wealth management, where cultural, regulatory, and generational factors shape investment decisions and strategies.

For now, Singapore and Hong Kong remain at the forefront of this dynamic landscape, offering a unique blend of opportunities for Asia’s wealthiest individuals. With their robust infrastructure and investor-friendly policies, these financial hubs are poised to attract even more cross-border wealth in the years to come.