Singapore and Hong Kong vie to be the Caymans of Asia

Hong Kong and Singapore have created incentives to encourage registration of their new financial vehicles, suggesting it is policy to promote their proliferation © FT Montage/Getty Images

In 2020, the pandemic halted travel and shut borders. But at the same time, two of Asia’s biggest financial hubs saw an opportunity to shift the global centre of gravity for hedge funds and the world’s wealthiest families.

Singapore established the “variable capital company”, a fund structure that allows a wide range of potential users to shelter large pools of capital in discreet, lightly taxed wrappers domiciled in a well-regulated financial centre. Hong Kong made enhancements to the “open-ended fund company”, a similar structure it had established two years earlier.