Facebook co-founder Eduardo Saverin famously renounced his US citizenship in favor of Singapore before the social network’s initial public offering made him a billionaire. Born in Brazil before immigrating to the US, Saverin is the second-richest Singaporean, with a net worth of $4.2 billion—and he is joined by three other expats on the list of the 10 wealthiest people in the city-state, released today by the research firm Wealth-X.
Moving to Singapore has allowed Saverin and his peers to reduce their tax bills: Singapore has no capital gains tax and offers a much lower individual tax rate than Western countries, especially for wealthy people. Saverin also gets to avoid paying American taxes as a non-resident—the US is one of only two countries that taxes the foreign income of citizens even if they live abroad (the other is Eritrea).
Saving millions in taxes is no doubt appealing to billionaires, but it’s not the only reason they might want to expatriate to Singapore. The country is financially and politically stable; it’s very clean; the education system is great; and it has some of most diverse food options of any Asian city.
The real estate consultancy Knight-Frank maintains a Global Cities index that ranks cities based on how much they appeal to the wealthy. It puts Singapore third, behind only London and New York, and predicts that it will keep a high position all the way to 2024.
Western countries might have to change their tune on taxation if they care to keep their wealthiest citizens. Legislation signed into law in the US last year increased both the income tax and capital gains tax for the richest Americans. French president Francois Hollande has backpedalled on his 75% “millionaire tax,” saying that it was “too heavy,” but it remains in place.
So unless those rates change, Singapore can probably expect a continued influx of expat billionaires.