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SINGAPORE: The wealth management industry can expect to face more stringent compliance processes.
That's according to global law firm Baker & McKenzie.
This comes amid a push towards greater transparency, with governments signing treaties that will see financial institutions sharing information with one another.
The Swiss bank UBS is among financial institutions that have been rocked by a slew of tax-evasion scandals recently.
Worldwide, governments are clamping down on such activities and seeking to boost transparency in banks.
And according to industry observers, these financial institutions are adapting their business models away from client secrecy.
Richard Weisman, Head of Global Tax Practice, Baker & McKenzie, said: "They have undergone through what I call the voluntary disclosure program where they do become compliant with the US laws. Similarly for many financial institutions which have come to us for advice, about how similarly they can shift their practices and become compliant with laws going forward."
Baker & McKenzie says governments and financial institutions should work hand in hand to adopt global standards of transparency for the wealth management sector.
Over the past year, more countries and territories have signed new tax agreements, committing themselves to exchange tax information.
And these include Singapore and Hong Kong.
Edmund Leow, Head of Tax and Wealth Management, Baker & McKenzie, said: "Both Singapore and Hong Kong have now elected new legislations there. Hong Kong is also now negotiating a lot of new double tax treaties with various countries, which they never had before, which incorporate the new exchange of information article."
Baker & McKenzie expects to see an enormous jump in the number of high net worth individuals in Asia.
It estimates that 80 percent of the region's wealth will pass from one generation to the next over the next 10 to 15 years. - CNA/fa
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