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Singapore has done away with estate duty. Private bankers say it could help bring new business and wealth management jobs to the island.

Singapore's recent abolition of estate duty – a legacy of the British colonial administration – will encourage wealthy individuals who are currently living elsewhere to bring in their wealth and manage it out of the republic, say private bankers.

And when these individuals start and retain their businesses and families here, thereby growing the wealth management pie, this will invariably lead to new hires, and more players entering the market.

"You always compare Singapore and Hong Kong with each other," says chief executive of LGT Bank in Liechtenstein (Singapore), Rolf Gerber. "Hong Kong did away with estate duty three years ago, so there was a natural expectation Singapore would eventually do the same."

For Hong Kong, the abolition of estate duty has given the city's asset management business a massive shot in the arm. Financial Secretary Henry Tang said last year, "Many private banking clients have relocated their overseas assets back to Hong Kong after the abolition."

Private bankers also say the scrapping of the ‘death tax’ in Singapore comes at a time when, despite the debt crisis, millionaires are surging in numbers in Asia and the competition to snare their monies is getting stiffer each day.

The abolition would make Singapore a more attractive place for wealthy immigrants to live, according to Tan Su Shan, managing director and head of Singapore, Malaysia and Brunei for Citi Private Bank. "If more wealthy families choose Singapore as their legal domicile as a result of this move, this would mean potentially more funds may be drawn here," she says.