According to a recent news report,

“Bank of America Merrill Lynch is helping more than a dozen multi billion dollar international hedge funds set up or reestablish a presence in Hong Kong and Singapore as the U.S. and Europe increase industry regulations.”

First banks and now hedge funds. The financial services industry is shifting gears, moving its base from the Western markets of UK, US and rest of Europe to the fast-growing Eastern financial centers of Singapore and Hong Kong. A recent string of measures such as UK’s recent tax measures, the EU’sproposal to impose tough borrowing limits on hedge fund managers and Barack Obama’s infamous “bank tax” are driving hedge funds to more tax friendly and less regulatory jurisdictions.

Given the growth potential of Asian markets, Hong Kong and Singapore are natural picks for several global hedge funds who are eager to capture the regional market. Singapore’s industry specific tax incentives and light regulatory measures are drawing the attention of hedge fund managers world-wide. For instance, small or boutique fund managers, with less than 30 qualified investors are exempt from holding a Capital Markets Services License, which is otherwise required in order to conduct fund management and financial related activities in Singapore. Most hedge fund managers perceive this as an advantage since they typically operate as small units and cater to limited HNIs and institutions. The Singapore government has also introduced attractive tax benefits and incentives for the financial services and fund management industry. Moreover, Singapore provides access to Asia’s High-Net-Worth investors who are considering hedge funds as an investment option. Other factors that play an important role are Singapore’s stable economy, its talented workforce and the central bank’s reasonable industry regulations.

Undeniably, Asia’s tax and regulatory environment has made it the most desirable destination for the hedge fund industry to reestablish and reinvent itself.

Interested in doing business in Singapore? Find out how to register a Singapore company.