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Singapore plans to change its financial services with an eye on the boom in green finance.

Image: Reuters Berita 24 English - Singapore said on Thursday that it wants to change its financial services industry by 2025 in order to st...

Image: Reuters

Berita 24 English -Singapore said on Thursday that it wants to change its financial services industry by 2025 in order to strengthen its position as a "key battleground" in the fight against climate change. This will be done by getting capital to support green fintech and sustainable financing.

The Monetary Authority of Singapore (MAS), the city-central state's bank, will release a plan called "Industry Transformation Map 2025." It will include steps to simplify the corporate structures used by investment funds, such as family offices, that offer tax breaks, as well as a S$400 million ($285 million) investment in local talent in the industry.

Full details of the big plans haven't been released yet, but they come as Singapore's appeal as a financial hub in Asia grows. This is because COVID-19 restrictions have been in place for a long time, and there are worries that mainland China is paying more attention to Hong Kong, which is a competitor.

Singapore's deputy prime minister and finance minister, Lawrence Wong, said, "If we do this right, our financial centre will continue to be relevant and competitive. It will also be a key global financial node that connects global markets, helps Asia grow, and helps Singapore's economy."

Wong said at a press conference that wealthy people and family offices are "growing interested" in doing more in the field of philanthropy.

The MAS thinks that Singapore's financial sector will grow by an average of 4% to 5% a year from 2021 to 2025, thanks to its new plans, and create an average of 3,000 to 4,000 net jobs each year.

The plans include a S$100 million fund that will be used over the next five years to support green fintech, new sustainable financing solutions, and reinsurance, among other things, to help the finance sector become more sustainable.

Wong said that Asia was an important place to fight against climate change. "The financial sector must do its part," he said. "It must mobilise capital by financing and investing in ways that help the region move to net zero."

Under the plans, the corporate structure used by investment funds like family offices, called Variable Capital Companies (VCC), will be "enhanced," but details about the changes won't be made public until later. VCCs were first made available in 2020, and they are not taxed.

MAS said it had been asked to improve the VCC framework so that more people in the industry and people who own assets can set up VCCs and change the structures of their existing companies to VCCs.

"In spite of the pandemic, Singapore's asset management industry has continued to do well over the past few years and has seen healthy growth. We keep getting money from places outside of Singapore, like North America, Europe, North Asia, and Southeast Asia "MAS said.

($1 = 1.4050 Singapore dollars)

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