The Swiss Bankers Association said Singaporean money managers aren’t luring away undeclared assets from the Alpine nation as governments crack down on people who deposit money outside their home countries to avoid taxes.
“There’s virtually no growth from European countries” in terms of untaxed private-banking assets transferred to Singapore, Claude-Alain Margelisch, chief executive officer of the Swiss banking group, told reporters today in Bern.
Switzerland is currently the largest offshore wealth center, with about $2.1 trillion in assets, according to a report last month by Boston Consulting Group. The nation is in talks with the U.S. to resolve a Department of Justice tax probe of 11 financial firms, and has also signed agreements with Germany, the U.K. and Austria that oblige its banks to withhold tax from customers domiciled in those countries.
In response to the regulatory changes in cross-border banking, Swiss money managers are building onshore networks in Europe and opening new offices in emerging economies.
Singapore, the country with the highest density of millionaires, and Hong Kong together manage about $1 trillion of offshore funds, and may overtake Switzerland within 15 to 20 years as wealth in Asian nations excluding Japan surges at a rate of over 11 percent per year, Boston-based BCG has said.
The two Asian banking centers have been “much less affected by the calls for greater transparency and tax rigor in the industry,” according to the BCG report.
“Singapore and Hong Kong want to avoid the same situation as Switzerland,” Margelisch said in an interview on the sidelines of the press conference in Bern. “We are confident that they have no interest in attracting undeclared money to these regions.”
Under the new tax accords with other European countries, Switzerland will provide a list of 10 countries where foreign customers are shifting fundse. Margelisch said today that he doesn’t expect Singapore to be on those lists.
Singapore’s central bank has published guidelines asking financial firms to avoid using the city-state as a haven for illegitimate funds or as a conduit to disguise the flow of such funds, Ravi Menon, managing director of the Monetary Authority of Singapore, said in a speech in October published on the central bank’s website.
“Efforts by various governments to strengthen tax enforcement have increased the risk of undeclared monies flowing to Singapore,” Menon said in October.
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