Singapore Fights Image As Swiss Banker of Asia

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Singaporean authorities pride themselves in having a high bar for strict laws and a low crime rate to match. So they’ve been none too pleased by reports that tax dodgers, corrupt officials, and money launderers might be closing their Swiss bank accounts and moving funds to Singapore.

In recent years, global wealth has shifted to Asia, especially to Singapore and Hong Kong, partly because of the new, far tougher scrutiny on traditional tax havens like Switzerland and Bermuda.

Singapore boasts one of the world’s most stable governments and economies, friendly business regulations, competitive tax rates, and banking privacy. All of this attracts the super-rich from abroad.

“It’d be stupid for them not to take advantage of this -- but you have to do it legally,” said Joseph Cherian, director of National University of Singapore Business School’s Center for Asset Management Research and Investments.

People certainly are taking advantage. Compared with $50 billion in 2000, Singapore managed $550 billion worth of assets in 2011, according to WealthInsight, a London-based research firm. Of that figure, $450 billion were in offshore accounts. In other words, more than 80 percent of private accounts in Singapore belonged to foreigners.

WealthInsight expects the number will continue to balloon by 2020, when it said Singapore will take Switzerland’s top spot in wealth management.

In response, the Singapore government is now negotiating a deal with the United States that requires banks in Singapore to share details of Americans’ offshore assets with the Internal Revenue Service.

The United States just signed the so-called FATCA (Foreign Account Tax Compliance Act) with six other governments this month.

FATCA would be part of broader efforts to improve transparency in banking. Singapore already has similar information-sharing pacts with Germany and the Organization for Economic Cooperation and Development club of mostly-rich countries.

As of this year, it also will be easier to prosecute money launderers in Singapore and “obtain bank and trust information from financial institutions without having to seek a court order,” the finance ministry said.