No competition: Dubai complements Singapore’s fight for family offices, industry watchers say

DUBAI’S position as a rising financial hub for wealthy families may translate into competition for Singapore, where scrutiny of family offices has tightened in recent months amid the Republic’s largest anti-money laundering probe.

But the majority of industry players polled by The Business Times say Dubai can provide complementary benefits to Singapore, even as competition spurs both on to become leading financial hubs in Asia.

“When we speak to our clients, the conversation is increasingly not about Dubai versus Singapore, but Dubai and Singapore,” said DJ Sengupta, chief executive of Wrise Wealth Management Middle East.

Wrise, which operates a multi-family office in Singapore, opened its Dubai subsidiary office in January to tap the city’s growing wealth space.

It is one of several Singapore-based multi-family offices that have expanded to Dubai, which has emerged as the latest destination for wealthy families to park their wealth and diversify their investments.

Sengupta noted that Dubai has over the years built a name for itself as a diverse multicultural society with luxurious lifestyles.

It also has a low tax regime – making it very similar to how Singapore would have been described and sold to the world 10 to 20 years ago.

As most families do not want to concentrate their wealth in a particular location, having two wealth hubs with similar offerings will likely attract families that want to diversify, Sengupta said.

Much of Dubai’s growing popularity stems from stability and strong regulatory support to attract wealthy families, said Rajiv Garg, co-founder and managing director of multi-family office Farro Capital.

The city had managed to control its Covid situation well, and also established residency programmes to attract the ultra-rich, he added.

Singapore-based Farro also set up a regional headquarters in Dubai in December 2023 to take advantage of growth in the region.

Tightened scrutiny

The rise in Dubai’s attractiveness to wealthy families coincides with tighter regulations in Singapore.

In December 2023, the Monetary Authority of Singapore (MAS) said it would tighten checks for tax incentives offered to single-family offices, following the bust of a S$3 billion money laundering ring last year.

In July 2023, MAS also updated the conditions for single-family offices applying for tax incentives. This includes raising the minimum fund size to S$20 million, and mandating the hire of at least one non-family member investment professional. (*See amendment note)

Garg said: “Where Singapore has become a little more restrictive in terms of residency and establishment of single-family offices, Dubai has become less restrictive, and they’re inviting people.”

The tighter scrutiny in Singapore has resulted in longer waiting times, which may deter families from setting up offices, he added.

“Money will always look at other... options that make sense for them and where ease of access and establishment is better, so there is competition to that extent,” he said.

Families will likely have to evaluate their reasoning for setting up a family office in Singapore, given that it now incurs more costs, said Sanjay Guglani, founder and chief investment officer of Silverdale Funds and chief executive of Silverdale Capital.

“If the family doesn’t have a clear objective in terms of what they want to do, then at least for the next one to three years, Dubai may make more sense,” he said.

Kevin Teng, CEO of Wrise Wealth Management Singapore, said the increased scrutiny on applications and account openings also “definitely has an effect on some of these clients’ needs”.

He said that he has seen other asset-management and independent firms come to the conclusion that it may be easier or faster for some of their clientele to move to Dubai.

Nevertheless, the tighter restrictions are likely a way for Singapore to attract better-quality families, and it is one more step in Singapore’s evolution as a major financial hub, he noted.

As each hub has its own advantages, it would depend on each family’s needs to determine which city would suit them better.

For example, Farro’s chief executive Hemant Tucker said Dubai’s Golden Visa and faster processing times may provide some advantage in attractive flows.

Meanwhile, Silverdale’s Guglani noted that Singapore is a choice location for global dispute resolutions, with a tried-and-tested judicial system.

Wrise’s Sengupta also noted that Singapore is still ahead of Dubai in terms of higher education.

Wealthy families from the West increasingly view Singapore as a better option for education than the US, which could spur some wealth transfer from Dubai to Singapore, he said.

Overall, industry players expect there will still be enough wealth generated globally to benefit both hubs.

Sengupta noted that there is an overall wealth migration from the West towards the East. Whether a family chooses to set up in Dubai or Singapore would likely depend on their affinity to the city, based on where they are located right now.

Farro’s Garg also noted that the two hubs are attracting wealth from different regions – Singapore is attracting Asian money, while Dubai is receiving large flows from the Middle East, Africa and Europe.

“I don’t think Singapore’s ever gonna lose (its) attractiveness,” he said.

“It’s just that so much wealth has been created – there will be other wealth centres... that people will consider.”

*Amendment note: The article has been edited to accurately state the criteria for single family offices to receive tax incentives in Singapore.