The impact of Singapore’s growing HNWIs on its RBI program

Singapore is poised to become home to Asia Pacific’s highest share of millionaires in the adult population by 2030, a change that could affect the tiny Southeast Asian country’s emerging residency-by-investment program that is spurring foreign-born capital investment.

The prediction from a recent HSBC report noted that Singapore will overtake Australia in that top ranking while also remaining ahead of contenders Hong Kong and Taiwan. The four places are even expected to collectively contain a higher proportion of millionaires than the U.S. by the end of the decade, the London-based multinational bank reported.

Frederic Neumann, chief Asia economist and co-head of HSBC’s Global Research Asia, wrote that it is important to take “a moment to pause and take stock of Asia’s rising wealth — the region’s overall financial wealth from bank deposits to securities. One reason is that the deepening pool of local savings is providing a measure of resilience against the vagaries of global financial markets.”

Singapore’s role in the global migration investment market

Given Singapore’s attractiveness as both a globalized investment hub and an attractive place to live, that dual reality may drive increasing interest in its residency-by-investment (RBI) program.

The offering, officially dubbed the Global Investor Programme, grants residency for at least five years in exchange for funding $2.5 million Singapore dollars into a new business entity or expanding an existing business. The second option is creating a business plan and putting at least $2.5 million in an approved fund that invests in Singapore-based companies.

Upgrading to citizenship is possible after only two years, though it does come with some major caveats: dual citizenship is not allowed, and military service could be required for persons under 40. The military condition may also apply to permanent residents.

“Singapore is not keen to attract new permanent residents and citizens; instead, it is selective,” said Philippe A. May of EC Holdings and a Singapore-based financial planner, investment immigration advisor and former managing director at Arton Capital. “It can afford to be selective because it is very wealthy and has no competition in Asia.”

May added that Singapore’s RBI program also has high rejection rates, and its net worth requirements are the highest in the world.

“Singapore is right to have such strict criteria,” he said. “It is only attractive for those who are committed to making it the center of their life. It gives no assurance on citizenship. Hence, HNWIs who want a plan B, a second passport for safety and security, a place to go if things at home turn sour or who need simply a travel document, Singapore is the wrong choice. Even those who want to start a new life abroad may think twice, given the uncertainty about citizenship. But some categories of immigrants, like Indonesians who want to be close to home or Chinese who speak no foreign language, have no alternative when it comes to overseas residency. Yet, even they usually take a second passport from a third country after they get Singapore permanent residency.”

Ranking of Singapore’s passport 

For those who do acquire coveted Singaporean citizenship, the passport is routinely ranked as among the best in the world in terms of visa-free global mobility. The United States and Europe’s Schengen Area are among the estimated 175 locations open for holders of the Singapore passport.

Neumann, of HSBC, noted that the world is seeing, amid “all the current challengers, a reminder of Asia’s growing resilience and financial depth — a strengthening buffer that should foster over time greater, shared prosperity.”

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