Briefly: The Cayman Islands plans to open its first office in Asia in either Singapore or Hong Kong to entice hedge funds and high-net-worth folks to the territory.
The Cayman Islands has long been legendary as an offshore financial hub. But during the pandemic, both Singapore and Hong Kong saw an opportunity to attract funds and high-net-worth individuals by approving new tax-friendly investment structures:
- 🇸🇬 In Singapore, nearly 900 variable capital companies have been set up since the scheme was launched in 2020
- 🇭🇰 In Hong Kong, the number of open-ended fund companies nearly doubled between 2021 and 2022
Now, as ultra-wealthy folks in China continue to grow wary of Beijing’s crackdowns on the home front, they’re looking to move their cash (and often families) to more ‘friendly’ environments abroad.
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And that yuan-rush has Hong Kong and Singapore licking their lips, hence the Caymanian decision to open a new Asian office and defend its market share.
Intrigue’s take: The Cayman Islands has one big advantage over both Hong Kong and Singapore – it’s further from the all-seeing eye of Beijing. On the other hand, ultra-wealthy folks from China are likely to be more comfortable holding their money in cities with closer economic and cultural ties to the mainland.
That’s why Cayman officials are reminding high-net-worth individuals in Asia that, unlike other johnny-come-lately jurisdictions, “Cayman funds represent the ‘old faithful’ of the investment world — tried, tested and trusted.”
Also worth noting:
- The Cayman Islands is on the Financial Action Task Force global anti-money laundering grey list.
- Folks from China’s mainland made up nearly a quarter of the buyers of last year’s 425 luxury homes sold in Singapore.