Investment immigration to Singapore: Understanding the Singaporean economic environment: Singapore was the first financial center in Asia to establish a financial futures market and also possesses an active short-term money market. Revenue from the financial sector as a percentage of Singapore's GDP has increased from 5% in the 1970s to over 12%. According to statistics, Singapore currently has over 600 various financial institutions, including nearly 120 banks, over 50 investment banks, over 130 insurance companies, over 60 insurance intermediaries, 100 fund management companies, over 60 securities firms, over 30 futures companies, and over 50 financial advisory firms. Within a land area of only 710 square kilometers, such a concentration of financial institutions provides sufficient density and diversity to cover the massive demand for financial services driven by economic development. Since its founding in 1965, Singapore has aimed to become the "Zurich of Asia," leveraging its advantages as an WorldWay port to accelerate the development of its financial markets. To promote the growth of these markets, the Singaporean government focused on cultivating the Asian Dollar Market and the financial futures exchange by providing various tax and regulatory incentives. In 1968, Singapore established the Asian Dollar Market, a significant milestone in the internationalization of Singapore's finance. As Singapore's status as a financial center gradually rose, the government continuously reformed and improved its financial system through internal reforms and external outreach. For example, it transitioned from the British-style stock exchange management system managed by members to an American-style system managed by the government and banking organizations; it established securities and futures markets and allowed individuals to use their Central Provident Fund (CPF) savings to purchase gold, stocks, etc., to further internationalize Singapore's financial market. Additionally, the Singaporean government has continuously introduced various preferential policies to increase support for the development of the financial center. In 1968, the Singaporean government abolished the withholding tax on interest income for non-resident depositors; in 1972, it abolished the 20% reserve requirement for Asian Currency Units and exempted stamp duty on bills of lading and negotiable certificates of deposit; in 1977, the government further offered concessions by imposing only a 10% income tax on various offshore earnings of Asian Currency Units; in 1983, the government exempted income tax on bank loans provided by local banks and financial institutions using Asian Currency Units. These tax-based preferential policies further consolidated Singapore's position as a regional financial center. Innovation enhances status.
Since 1998, Singapore has focused on building a wealth management center. Due to the many attractive policies introduced by the Monetary Authority of Singapore, many fund managers in Hong Kong have shifted their operations to Singapore. In 1998, the volume of funds in Singapore was only 87 billion USD, lower than that of Hong Kong, but by 2003, it had climbed to 270 billion USD, surpassing Hong Kong. The emerging Asian wealth management market was severely lacking in relevant professionals; at that time, there were only about a thousand wealth management practitioners in Singapore (chahuilv.com). To cultivate more wealth management talent, Singapore specifically established a wealth management institute controlled by state-owned enterprises, recruiting globally with plans to train three to four hundred outstanding wealth management professionals within ten years. The wealth management industry is one of the financial sectors with development potential in Singapore, and Singapore enjoys many competitive advantages in this regard that attract international players. Many top private banks and fund management companies have already established branches in Singapore, with many also setting up regional headquarters there. To develop the wealth management industry and further consolidate its status as an international financial center, the Monetary Authority of Singapore has introduced many measures to attract multinational institutions, such as further opening up the financial market, further relaxing CPF investment regulations, government capital injections to expand the market, reforming supervisory systems, focusing on monitoring systemic risks, and consulting with enterprises. Regulation conforms to national conditions.
Singapore does not have a formal central bank. To create a relaxed financial environment based on strengthened macroeconomic control, the government established the Monetary Authority of Singapore, the Board of Commissioners of Currency, and the Government of Singapore Investment Corporation to perform the functions of financial supervision, currency issuance, and foreign exchange reserve management, respectively. The Monetary Authority of Singapore was established in 1971 and acts as Singapore's central bank. On one hand, it regulates the national economy through open market operations and tools such as foreign exchange market interest rates to maintain currency stability and keep inflation within a reasonable range; on the other hand, it is responsible for the supervision of the banking, securities, and insurance industries. The Government of Singapore Investment Corporation is specifically responsible for managing the majority of the foreign exchange and gold assets of the Monetary Authority and the Currency Board, investing these assets in securities and real estate to maintain and increase their value. The three entities exercise their powers completely independently, without interference from the government or any other department. This regulatory system, which is both independent and mutually restrictive, conforms to Singapore's national conditions and has effectively promoted the development of Singapore as an international financial center. Because mixed operations are permitted for financial institutions, the supervisory departments of the Monetary Authority are divided into the Banking Department, the Insurance Department, and the Securities Department, each responsible for the supervision of its respective industry. Since 1992, Singapore has implemented capital adequacy management for banks, requiring a capital adequacy ratio of 12%, all of which must be Tier 1 capital, which is significantly higher than international standards. In December 1998, the regulations regarding capital adequacy were amended; it is no longer required that all capital be Tier 1, only that Tier 1 capital be above 10%, while Tier 2 capital can be 2%, but the definition of Tier 2 capital is much stricter than that of the Bank for International Settlements. Regarding bank liquidity supervision, the minimum liquid asset ratio stipulated by Singapore is 18%, which is also the highest standard in the world.
