A report released today by the management consulting firm Boston Consulting Group (BCG) shows that Switzerland remains the world’s largest offshore centre. However, Hong Kong and Singapore could pose a challenge in the future.
For now, Switzerland stands heads and shoulders above the rest booking over $2.4 trillion in wealth from abroad in 2014. The country accounted for over a quarter of global offshore assets. It continued to attract wealth from Western Europe, accounting for around 35% of offshore wealth originating from the region.
Switzerland also has the highest density of millionaires with 135 of a 1000 households boasting of private wealth over $1million in 2014. Other noteworthy contenders were Bahrain (123 per 1000 households), Qatar (116), Singapore (107), Kuwait (99) and Hong Kong (94).
The alpine nation also has the fourth highest density of ultra-high-net-worth (UNHW) households with 90 out of every 100,000 households worth over $100 million. Only Hong Kong (153 per 100,000 households), Singapore (143) and Austria (120) had a higher concentration of UNHW households.
The BCG reportexternal link also flagged up Switzerland’s problems with increasing tax scrutiny from other countries stating that “the country remains under intense pressure from both European and U.S. tax authorities seeking to crack down on tax evasion”. It also called on the country to “reinvent” itself in order to compete with Asian offshore hubs.
Hong Kong and Singapore, in particular, represent “the most significant challenge to Switzerland’s position” as they stand to benefit from the creation of new wealth in the Asia-Pacific region. Together, they accounted for 16% of global offshore assets in 2014, and are expected to increase their share to 19% by 2019.