Looking for millionaires? Take a drive around
Singapore’s residential districts – more than one in six houses you see will be
inhabited by one.
The
Southeast Asian city-state has retained the honor of having the highest
percentage of millionaires in the world, according to a new report from the
Boston Consulting Group. Singapore had 188,000 millionaire households in 2011 –
or slightly more than 17% of its resident households. Effectively, that equates
to more than one in every six Singapore households having disposable private
wealth of over US$1 million, excluding property, businesses and luxury goods.
If those were included, it would likely push the number of millionaire
households even higher, since property in Singapore is among the world’s most
expensive.
The
millionaires number has grown 14% since 2010, when Singapore also had the
highest percentage of millionaires in the world, according to a similar BCG
report.
Singapore’s
über-wealthy population has also grown, with 10 in every 100,000 households now
classified as “ultra-high-net-worth” households, defined as households with
more than US$100 million in private financial wealth. That puts Singapore right
below Switzerland, which has the highest concentration of ultra-high-net-worth
households at 11 for every 100,000, and above Hong Kong which has 7 of these
for every 100,000 households.
Hong
Kong takes the prize of having the highest concentration of billionaire
households relative to its small size, according to the report.
Across
Asia-Pacific (excluding Japan), private wealth increased by 10.7% to US$23.7
trillion. Conversely, in North America, Europe and Japan, private wealth
declined by 0.9%, 0.4% and 2% respectively, particularly affecting the
ultra-wealthy, though North America still has the world’s largest share of private
wealth at US$38 trillion.
China
is fast catching up with America’s millionaires, and is now host to the world’s
3rd highest number of millionaire households (1.43 million). According to BCG,
this number is set to grow over the year 2012, and is already up 16% from 2010.
The
report also tracks offshore wealth, with Switzerland emerging, again, as the
world’s largest offshore wealth center. However, this position is increasingly
being challenged by the likes of Hong Kong and Singapore, according to BCG, especially
as calls for greater tax rigor and transparency become louder in Europe and
North America and places like Switzerland are compelled to take more steps to
regulate incoming deposits.
“In
Switzerland… asset inflows from investors in neighboring countries will
certainly decline,” said the report, citing “new, stricter tax regulations.”
“If
recent growth rates remain constant, it is possible that Singapore and Hong
Kong combined will surpass Switzerland as an offshore booking center in terms
of size in 15 to 20 years.”
Already,
many high-profile wealthy individuals are choosing to relocate to the two port
cities, with tax experts crediting this not only to lower taxation rates but
the relative ease of filing taxes in Singapore and Hong Kong, and fewer
regulatory hurdles.
In
2011, US$2.1 trillion in offshore wealth was held in Switzerland, compared in
US$1 trillion in Hong Kong and Singapore combined. In Hong Kong and Singapore,
roughly three quarters of this wealth comes from Asia-Pacific. Given that
wealth is rising so quickly in Asia, this means the two cities’ roles as
private wealth centers are likely to keep growing rapidly.
Indonesia,
which is experiencing an enviable economic boom, is also a large contributor to
Asia-Pacific’s share of private wealth. A separate report released this May
from Wealth-X, which tracks the world’s super-wealthy, estimates that the
combined net worth of Indonesia’s ultra-high-net-worth population is at least
US$125 billion, with at least 25 Indonesians worth over US$1 billion.
Shibani
Mahtani
Business & Investment Opportunities
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