Singapore’s reputation as a safe haven for wealthy Chinese families has begun to fade. This shift is reversing the previous inflow of wealth, which had once boosted Singapore at the expense of rival financial hubs like Hong Kong and Japan.

According to CNBC.com, Singapore’s appeal to rich Chinese surged in 2019, when Hong Kong was rocked by pro-democracy protests. The tension deepened the following year after Beijing imposed the National Security Law, prompting many wealthy families from China to distance themselves from political influence from the central government.

Political stability, an independent legal framework, a supportive family office regime, and the use of Mandarin made Singapore highly attractive to the ultra-rich. However, a SG$3 billion money laundering scandal in 2023—widely known as the “Fujian case”—led authorities to tighten regulations and scrutinize wealthy clients more carefully.

“When the Fujian case broke out, many wealthy Chinese immediately left. Almost all relocated to Hong Kong, the Middle East, or Japan,” said Ryan Lin, Director of Bayfront Law in Singapore.

Lin noted that family office applications from Chinese clients have dropped by 50% compared to 2022, as stricter background checks and new regulations take effect.

The Monetary Authority of Singapore (MAS) also toughened rules on digital assets. Starting in 2025, any platform offering crypto products or tokenized equities abroad must be licensed, with a minimum capital requirement of SG$250,000, along with compliance in anti-money laundering (AML) and technology risk management.

“These new rules drove crypto players away. Almost all our clients in that sector have already exited,” Lin said.

MAS stressed that the money-laundering scandal has not altered its regulatory standards. “Singapore continues to welcome legitimate wealth, and we work with financial institutions to ensure practices that are sound, efficient, and effective,” said an MAS spokesperson.

According to Iris Xu, founder of Jenga—a corporate services firm serving Chinese clients—the ripple effect of the Fujian case and major collapses like Three Arrows Capital and FTX triggered aggressive clean-up measures by banks. They re-conducted due diligence, closed accounts, and rejected family office applications, leaving clients feeling shut out.

“This has destroyed clients’ patience and confidence,” Xu remarked. “If they can’t open an account, how can they run their business? Eventually, funds were moved to Japan, Hong Kong, and Dubai.”

Immigration has also become a hurdle. Applicants for permanent residency or family offices now undergo extensive checks, including disclosure of personal family details seen as overly intrusive.

“From their perspective, the question is: Do I really need to declare an illegitimate child just to manage my wealth in Singapore?” Lin added.

Data from Henley & Partners estimates that the inflow of wealthy individuals into Singapore will fall sharply in 2025, with only about 1,600 millionaires expected to arrive—well below the 3,500 recorded in 2024.

Carman Chan, founder of Click Ventures, also observed this shift. She noted that many family offices that once set up in Singapore are now moving back to Hong Kong.

Chan pointed out that the obligation to hire local employees and the lengthy Know Your Customer (KYC) process pose major challenges. Even family offices with just two staff members must employ at least one local worker, which is often hard to fulfill.

“If there aren’t enough local workers, it becomes a bottleneck. You can’t just transfer staff from abroad to Singapore,” Chan explained.

With stricter regulations and KYC approvals that may take more than a year, investors are now exploring alternatives. Dubai and Hong Kong are said to offer faster and more flexible processes, making them new destinations of choice for wealthy Chinese families.