Political stability top of mind for family offices

Stable governments and the absence of public violence and unrest are paramount for family office investors seeking to grow and protect their wealth.
Political stability top of mind for family offices

The political stability of a wealth management hub outweighs all other factors for rich individuals and families when choosing a location to park their wealth.

This is the consensus of three industry watchers who spoke to AsianInvestor after looking at several factors such as living standards, healthcare, education, public safety, and even taxation policies.

In the end, they agreed that stable governments and the absence of public violence and unrest trump all factors - even a zero-tax incentive – when it comes to a family office setting up shop in a new location such as Singapore or Hong Kong.

Kiow Wei Hao
DL Holdings

“When we look to set up a new location for a family office, a few considerations come to play. Regulation, political stability, taxation, access to a professional network, ease of recruiting, proximity to family and family business interests are all major factors we look into,” said Kiow Wei Hao partner of Hong Kong-based DL Holdings Group and chief executive of its Singapore office,

“If we had to rank it, I would say political stability comes first followed by taxation,” he said.

He had, in an earlier interview with AsianInvestor, given his insights on the impact of the higher wealth taxes introduced in Singapore in February on family offices there.

He said taxation should not be the “sole factor” deterring family offices from relocating to Singapore as the city possessed other advantages such as political stability, a strong legal and regulatory framework, ease of travel, and absence of capital gains or inheritance tax.

In addition, he considers the Singapore passport the “second most powerful” in the Henley Passport Index, a reflection of the city state’s appeal as a highly sought-after location by global citizens, including wealthy individuals.

Singapore is in fact ranked joint first with Japan in the Index for 2022 and 2021, up from second place in 2020, a check by AsianInvestor revealed.


A family office investor in Hong Kong, who requested to remain anonymous, gave his take on political stability versus taxation.

“Taxation is a way to buy safety. Especially nowadays with the geopolitical tensions, if you have a chance to put money in a low tax or no-tax jurisdiction but are not sure if the wealth would be fully protected, would you do it?” he posed the question to AsianInvestor.

He said while there were a few wealthy Hong Kong families who had moved their assets to Singapore in the aftermath of the political unrests in 2019 and 2020, many stayed put because of their significant interests such as property investments.

For those who have relocated to Singapore, the decision may have been based on “situational factors,” but portfolio diversification also played a part.

“As you can imagine these wealthy families have different nests all over the world. So, Singapore is definitely one of the locations in which they would divert their wealth from Hong Kong,” he said.

In the same vein, some private banks have also changed domiciles in the past year or switched the management of assets from their Hong Kong office to Singapore, he said.


The Global Economy, a major business and economic data provider, ranked Singapore fourth for political stability in 2020, after Liechtenstein, Andorra, and New Zealand, in its Political Stability and Absence of Violence/Terrorism index.

Hong Kong was ranked 90 above Mainland China at 114, and the US was placed at 99 in the total ranking of 194 countries and selective territories.

The index reflects the perceptions of the likelihood of a disorderly transfer of government power, armed conflict, violent demonstrations, social unrest, international tensions, terrorism, as well as ethnic, religious, or regional conflicts.

Based on sources including the Economist Intelligence Unit, the World Bank, World Economic Forum, and political risk agencies, the index is used by investors and businessmen.

“Political stability is deeply tied to the growth of economies. Political stability attracts investments; in times of instability money would typically flow out of the regions,” said Kiow.

Stephen Chen
Family investor

For example, the racial riots in Indonesia in 1998 during the Asian financial crisis upended the economy, resulting in massive capital flight and loss of investor confidence, said Singapore-based family investor Stephen Chen.

About the same time in Malaysia, then prime minister Mahathir Mohamad fired his deputy and also finance minister Anwar Ibrahim over management differences, creating a leadership crisis and further damaging market confidence.

However, there are short-lived incidents that have not affected investor confidence because of the strong underlying political fundamentals.

“The US Capitol building riots, for example, removed the US from its high point (on the index) but Wall Street investors shrugged it off because they knew the government system would be in place and there would not be much economic damage caused from the short-lived riots,” Kiow said.

Similarly, the Hang Seng index closed higher at the end of 2019 than at the start of the year when the city was rocked by public protests that saw tourism and retail business go south.

“That’s because Hong Kong is irreplaceable for China and playing an important role in China's economy," he said.


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