Singapore

A regulator-led financial centre

Singapore is the competitor that most resembles Zurich in its strengths. Like Switzerland, the city-state offers political stability, a strong currency, low taxes, an efficient administration, a highly educated workforce and a reputation for the rule of law. Unlike Switzerland, it has been shaped since independence by a deliberate state strategy in which the Monetary Authority of Singapore (MAS), the central bank and integrated financial regulator, has acted as supervisor and developer of the financial centre at the same time. The dual mandate explains the speed with which Singapore introduces new vehicles, incentives and licensing regimes. It also explains the speed with which it corrects course when a strategy produces unwanted side effects.

The results are impressive. As noted above, assets under management in Singapore reached S$6.7 trillion at the end of 2025, and the variable capital company (VCC), a corporate fund vehicle available since January 2020, had grown to 1,406 companies with 3,443 sub-funds.¹ Singapore also offers a commercial court designed for international parties. The Singapore International Commercial Court (SICC), established on 5 January 2015 as a division of the High Court, sits with specialist commercial judges from Singapore and international judges from both the civil law and the common law traditions.² The planned Zurich International Commercial Court follows a comparable idea, although it will remain a cantonal court applying Swiss procedural law.

In the IMD World Competitiveness Ranking of 2026, Singapore regained first place, ahead of Hong Kong and Switzerland. Switzerland, which had led the ranking in 2025, remained first for government efficiency and for the quality of its infrastructure but fell to thirty-seventh place in economic performance.³ The result shows how close the three centres lie in the perception of international business leaders.

Family offices and the tax incentive schemes

No sector illustrates the competition between Singapore and Zurich more clearly than family offices. Singapore attracted single family offices through two tax incentive schemes for funds, known by the sections of the Income Tax Act that establish them. Section 13O applies to funds managed by a Singapore company, section 13U to enhanced-tier funds without restriction on the fund vehicle. The schemes exempt specified income from tax, provided that the fund meets conditions on minimum assets, local business spending, the employment of investment professionals and local investment. After a period of rapid growth, the MAS tightened the conditions for applications received from 18 April 2022. Under section 13O a fund must now hold at least S$10 million at the time of application and S$20 million within two years, while section 13U requires S$50 million. Business spending of between S$200,000 and S$1 million per year, depending on the size of the fund, two or three investment professionals and an investment of at least ten per cent of the assets or S$10 million in Singapore complete the requirements.⁴

The schemes have succeeded in quantitative terms. According to the deputy chairman of the MAS, Chee Hong Tat, the number of single family offices in Singapore rose to about 2,000 at the end of 2024, from 1,650 in September of that year.⁵ The comparison with Zurich is instructive. Switzerland has no special tax regime for family offices, which are taxed as ordinary companies or as part of the private wealth of the family, and no authority counts them. The chapter on family offices in Part H explains that their attraction to Zurich rests on the general framework: the stability of the franc, a dense network of banks, lawyers and tax advisers, the absence of any requirement to invest locally and the proximity of the families themselves. Singapore attracts family offices with incentives tied to conditions, whereas Zurich relies on the quality of its ecosystem. Both models have their merits. The Singapore model generates rapid growth and local employment, but it ties the decision of the family to a regulatory bargain that the state can renegotiate, as it did in 2022.

The money-laundering case of 2023 and its consequences

The limits of the Singapore model became visible in August 2023, when the police arrested ten foreign nationals in coordinated raids and seized assets that eventually exceeded S$3 billion in value. The case involved individuals holding passports from several countries who had lived in Singapore, placed money in local banks and family office structures and bought luxury properties and cars.⁶ On 4 October 2024 an Inter-Ministerial Committee published its recommendations for strengthening the anti-money-laundering framework, organised along three lines: proactive prevention, timely detection and effective enforcement. The report called for stronger standards for gatekeepers such as corporate service providers, real estate agents, dealers in precious stones and metals and financial institutions, for better sharing of information within the government and among gatekeepers and for new legislative tools for law enforcement.⁷

The regulatory consequences followed in 2025. On 4 July 2025 the MAS imposed composition penalties totalling S$27.45 million on nine financial institutions for breaches of their anti-money-laundering obligations in connection with the case. The deficiencies identified included inadequate customer risk assessments, failure to establish the source of wealth and insufficient monitoring of transactions.⁸ Several of the institutions concerned were subsidiaries or branches of Swiss banks.⁹

For Zurich the Singapore case holds two lessons. The first is that no financial centre is immune to large money-laundering scandals, whatever its reputation, and that a rapid inflow of wealth from a single region creates concentrated risks. Switzerland learned the same lesson in earlier decades, from the Chiasso affair to the cases of 1MDB and Petrobras described in Parts F and H. The second lesson concerns the reaction of international clients. Singapore’s tightening has lengthened onboarding times and raised documentation requirements for new clients, particularly for those from mainland China. Some of these clients have turned to Hong Kong, Dubai or Switzerland. For a Swiss bank, the resulting business is attractive only if the client passes the same scrutiny that Singapore now applies. Zurich competes with Singapore on the quality of its due diligence as much as on the quality of its service, and the chapter on anti-money-laundering compliance in Part I shows that the Swiss standards have tightened in parallel.

Notes

1. Caproasia, “Singapore MAS Asset Management Survey Report 2025” (n. above). The VCC framework was introduced by the Variable Capital Companies Act 2018, which entered into force in January 2020. ↩
2. Singapore Judiciary, “Establishment of the SICC”, https://www.judiciary.gov.sg/singapore-international-commercial-court/about-the-sicc/establishment-of-the-sicc. The court presents itself as a complement to arbitration that addresses concerns about cost, delay, legitimacy and consistency. ↩
3. KMU-Portal of the Swiss Confederation (SECO), “Switzerland ranks third in global competitiveness”, 29 July 2026, https://www.kmu.admin.ch/en/switzerland-ranks-third-global-competitiveness. The ranking covers seventy economies and is compiled by IMD Business School in Lausanne. ↩
4. Grant Thornton Singapore, “Stricter criteria for family offices applying for tax incentives 13O and 13U”, https://www.grantthornton.sg/insights/stricter-criteria-family-offices-tax-incentives-13O-U/. Under section 13U at least one of the three investment professionals must be a person outside the family. ↩
5. Malay Mail, “Singapore’s single-family offices climbed to 2,000 last year, minister says”, 17 January 2025, https://www.malaymail.com/news/singapore/2025/01/17/singapores-single-family-offices-climbed-to-2000-last-year-minister-says/163523, reporting remarks at the UBS Asia Wealth Forum in Singapore. ↩
6. “2023 Singapore money laundering case”, English Wikipedia, https://en.wikipedia.org/wiki/2023_Singapore_money_laundering_case: on 15 August 2023 the Singapore Police Force arrested ten individuals, Chinese nationals who also held various non-Chinese passports, including Cambodian documents, in a case involving assets worth S$3 billion. ↩
7. Ministry of Finance Singapore, “Inter-Ministerial Committee publishes recommendations to strengthen Singapore’s anti-money laundering framework: proactive prevention, timely detection, effective enforcement”, 4 October 2024, https://www.mof.gov.sg/news-resources/newsroom/inter-ministerial-committee-publishes-recommendations-to-strengthen-singapore-s-anti-money-laundering-framework-proactive-prevention-timely-detection-effective-enforcement/. ↩
8. Clifford Chance, “Significant AML Developments in Singapore – Recent Enforcement Actions & New Rules”, August 2025, https://www.cliffordchance.com/insights/resources/blogs/regulatory-investigations-financial-crime-insights/2025/08/significant-aml-developments-in-singapore.html. The article also reports penalties of S$960,000 imposed on five major payment institutions on 27 June 2025 and amended AML/CFT guidance effective from 1 July 2025. ↩
9. Hubbis, “MAS Takes Regulatory Actions Against 9 Financial Institutions for Anti-Money Laundering-Related Breaches”, July 2025, https://www.hubbis.com/news/mas-takes-regulatory-actions-against-9-financial-institutions-for-anti-money-laundering-related-breaches, reproducing the MAS list: Credit Suisse AG, Singapore Branch (S$5.8 million), UBS AG, Singapore Branch (S$3 million) and Bank Julius Baer & Co. Ltd., Singapore Branch (S$2.4 million) were among the nine institutions. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.