Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Neil Shen, China’s most prominent technology investor, acquired permanent residency in Singapore as tensions rose between Washington and Beijing, according to two people familiar with the matter.
The billionaire founder of Sequoia China, renowned for early investments in Alibaba, ByteDance and Shein, applied for and was granted the status before the Covid-19 pandemic. One of the people close to Shen cited “personal reasons” for the decision.
Shen’s firm, which rebranded last year as HongShan, subsequently expanded into Singapore, opening an office in the financial hub as it split from US-based Sequoia last June.
HongShan has also encouraged some of its China-based portfolio companies with global ambitions to expand in and set up entities in Singapore since the pandemic, said three people with knowledge of the situation.
“The decision to open a Singapore office was made for business reasons and was not related to personal matters of any of our executives,” said HongShan in a statement. HongShan has previously said the Singapore office was set up to fulfil local legal requirements.
Another person familiar with Shen’s situation said he had been spending little time in Singapore and still appeared to be based in Hong Kong with frequent travel to mainland China.
Shen, 56, became an early mover in a trend that became replicated many times over by wealthy Chinese, especially those tied to the country’s tech sector. Many shifted to low-tax, stable Singapore amid strict pandemic lockdowns in the mainland as well as President Xi Jinping’s crackdown on tech companies and calls for wealth redistribution.
The city-state, which has a large ethnic Chinese population, strikes a neutral line between the US and China. Tensions between the two superpowers have grown since Donald Trump’s election as US president in 2016 and have continued under Joe Biden.
“Neil’s decision . . . made it a lot easier for others to follow after that,” one of the people said, adding the move was “spoken about” in Chinese business circles even though it has not become publicly known until now.
Permanent residency in the city-state allows those with the pass to apply for permanent residency for their spouses and children, pay lower taxes on property purchases and paves the way for Singapore citizenship.
Shen led Sequoia’s China business before political pressure stemming from worsening Sino-US relations forced it to split from its American arm. The divorce resulted in three separate businesses: HongShan in China, Peak XV in India and south-east Asia and Sequoia Capital in the US.
HongShan has since sought to become more global, pursuing business opportunities and investments worldwide to benefit its Chinese portfolio companies.
One mainland start-up in the healthcare industry backed by HongShan told the Financial Times it had received advice to start a Singapore entity as that would ease its expansion into international markets including the US. Two other co-investors in start-ups also backed by HongShan said founders had been told to establish a Singapore presence.
Some have already been set up. Beijing-based Moonshot AI, which last week raised $1bn, last year established a Singapore entity. HongShan is a longtime investor in the start-up.
China’s Hai Robotics, an autonomous warehouse robotics start-up and another HongShan-backed company, set up a Singapore office in late 2021.
Other Chinese companies with large operations in western markets, including TikTok owner ByteDance and fast-fashion group Shein, have picked Singapore as their global headquarters. Both companies are backed by HongShan.
HongShan declined to comment, but a person close to the company said many of its portfolio companies had offices around the world, including in Singapore.
HongShan, Moonshot AI and ByteDance were named in a US congressional report this month which scrutinised American capital invested in Chinese tech companies that support Beijing’s military and its repression of minorities in Xinjiang.
Meanwhile, other Chinese business figures, particularly in the investment and technology sectors, have sought residency in Singapore and expanded or opened offices in the city-state in recent years.
Sean Tong, the co-founder of China’s Boyu Capital, a leading private equity firm set up by a grandson of former Chinese president Jiang Zemin, relocated to Singapore from Hong Kong during the early stages of the pandemic. Boyu opened a Singapore office in 2019.
Zhang Lei, the billionaire China-born founder of Hillhouse Capital, became a Singaporean citizen. Hillhouse expanded and consolidated into a larger premises in 2022.
Dianping founder Zhang Tao and Tencent co-founder Tony Zhang relocated to Singapore in the past few years.
Read the full article here