Wealthy Asian families are increasingly sending their younger generations to study at homegrown universities, as the region’s powerful economies present greater opportunities for business connections — and business expansion.
Where once rich dynasties favoured American and European establishments for their children’s undergraduate and post graduate studies, advisers report that many are now opting for the highly-ranked universities in mainland China, Hong Kong and the wider Asia Pacific region.
“There is definitely a growing interest and trend for Asia to become a preferred destination for higher education,” says Winnie Qian Peng, director of the Roger King Center for Asian Family Business and Family Office at the Hong Kong University of Science and Technology.
“For a long time, Asia was far behind the US. Now it’s not,” Peng explains. “It’s therefore very natural that people would view Asia as a good place to study and to work, because that could be the future growth driver.”
While the traditionally leading universities of the US and UK are still highly sought after by many wealthy Chinese families, for both undergraduate and postgraduate programmes, Peng says a growing number of rich mainland Chinese families want their children to study at institutions in the region because they have become highly rated internationally.
Hong Kong is home to five of the world’s top 100 universities according to the latest edition of QS’s world university rankings, including HKUST, while mainland China has another five, including Tsinghua and Peking universities. Singapore has two in the top 100: the National University of Singapore and Nanyang Technological University.
Peng points out that the number of applications for HKUST’s Master of Science in Finance programme this year was double the pre-pandemic level — with many now coming from mainland China.
“You may find people with similar backgrounds from all those wealthy families, children studying together and becoming classmates,” she says. “This becomes guanxi — a connection — people actually value this a lot, especially in the Asian context.”
US-China tensions, which made it more difficult for some mainland Chinese students to apply to study in the US, have prompted more to look to Hong Kong and Singapore. Japan and South Korea’s universities are also gaining momentum, Peng adds.
Hong Kong’s low tax rates are a further attraction for global families. Meanwhile, Singapore remains a hotspot following an influx of Chinese investors during the pandemic — even though the city-state recently doubled its property tax for foreigners. It is particularly appealing to wealthy Chinese families who wish their second and third generations to gain overseas residency and passports.
Chi-man Kwan, chief executive of Raffles Family Office, a multi-family office dually based in Hong Kong and Singapore, says that, when it comes to deciding on a higher education destination, many wealthy parents will factor in where their family businesses are based, and where they plan to expand their business footprint.
“If I am an entrepreneur in Greater China, and I am looking to expand to south-east Asia, the best place to make my headquarters is very likely Singapore,” Kwan says. “If you are a European family or an American family, [and] your family business is doing very well . . . eventually — maybe this generation but for sure the next generation — Asia and Greater China is definitely going to play a big part of it.”
Wealth managers in the region say that setting up a family trust is usually the best way of facilitating, and financing, a cross-border university move. Family trusts are well suited to planning for a student’s life abroad in Asia, they argue, because they can be registered in Hong Kong or Singapore where there is a low tax regime, or registered offshore where tax can be mitigated further.
Trust structures domiciled either overseas or in the region are especially beneficial if a child “intends to stay in, or even relocate to, the place where he or she is studying”, says Rita Ku, partner at Rita Ku & Ser, a Hong Kong-based law firm focusing on family law and wealth management. They can be set up “if the parent is wealthy enough . . . and they just want to set aside a certain big lump sum for the benefit of the child”, she says.
For example, in the case of families that do not already have a footprint in mainland China but want their next generations to study there, a trust set up in Hong Kong may be an efficient solution, Ku explains. Not only is the territory close to large cities such as Beijing, but there are also multiple tax benefits in Hong Kong that are not available in mainland China.
Easier pathways to residency and citizenship in Hong Kong and Singapore have been an additional factor for many rich Chinese families, she says.
Carol Wu, head of private bank for North Asia at DBS, suggests that rich families who are looking to pave the way for their children to emigrate to Asia could go further and consider setting up a family office in the region — on top of having offshore trust structures.
Many are already doing so. Eric Landolt, global co-head of family advisory, art and collecting at UBS, says the Swiss bank has seen “more interest” from wealthy families outside Asia in setting up family offices in Hong Kong and Singapore. And, in some cases, the families are relocating and bringing their children to Asia with them.
However, early planning is important if a wealthy family is looking to send its next generation to Asia for an education and a career after that, says Annie Koh, professor emeritus of finance (practice) Lee Kong Chian School of Business at Singapore Management University.
“There are stages to getting residency — through graduating from a degree programme to . . . working in a company willing to sponsor your employment pass and eventually your residency,” she says. “Many current generations understand there is a process and the earlier that the children start the integration process, the better.”
