Singapore’s latest package of tax breaks and visa incentives for fund managers could enhance its appeal as a leading asset management hub, as competition with Hong Kong intensifies for global capital and high-value financial talent, analysts have said.
While the measures would help maintain Singapore’s competitiveness, they are unlikely to create a significant or lasting advantage over Hong Kong, according to Ramkishen Rajan, an economist and Yong Pung How Professor at the Lee Kuan Yew School of Public Policy.
The Monetary Authority of Singapore and its finance ministry on Wednesday announced the package, including a tax exemption for investment profits earned by managers of single-family offices and other qualifying funds.
Singapore and Hong Kong should not be viewed purely as substitutes, as both hubs have different comparative advantages, said Aurelio Gurrea-Martinez, the head of the Singapore Capital Markets Initiative and law professor at Singapore Management University.
Hong Kong possessed an “extraordinary and probably irreproducible” advantage as a connector between capital from mainland China and the world, while Singapore’s strengths included its attractive legal and institutional environment, sophisticated financial infrastructure, and political and regulatory stability, he said.
“Its strategic position within Southeast Asia is particularly important,” he added, noting that the economic region was dynamic and rapidly growing.