“Projects that were going into Hong Kong, people are now holding back,” said Shanker Iyer, Asia executive chairman at IQ-EQ, which says it has about $450 billion of assets under administration for family offices and other investors.

The company is getting regular calls from clients asking about the logistics of leaving Hong Kong, he said. “People who aren’t in the market already and want to come in, they’re having second thoughts,” with Singapore seen as a much more business-friendly destination, he added.

The shift comes at a critical time for Hong Kong, which has been roiled by months of violent protests that have made investors fearful of direct intervention by Chinese authorities to quell the unrest.

‘Little Typhoon’

Clifford Ng, a managing partner at Zhong Lun Law Firm in Hong Kong, who specializes in advising high net-worth individuals on cross-border transactions and investments and has lived in the city since 1995, said the level of interest in moving assets to Singapore is “unprecedented.”

“We have certainly received a lot of questions regarding the freedom to move money,” he said. “Investors hate uncertainty and Hong Kong is a little typhoon within a much bigger storm of uncertainty. Risk avoidance, in handling other people’s money, drives that money to a less uncertain place.”

With financial services accounting for about one-fifth of Hong Kong’s GDP, any disruption will have a real impact on the economy, which is already slipping as tourists desert the city and retail sales slump.

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The possibility of Hong Kong’s legal system changing earlier than the scheduled deadline of 2047 is another cause of angst among family offices, according to IQ-EQ Group Executive Chairman Serge Krancenblum.

The city operates a legal system derived from British common law under the One Country, Two Systems principle. A failed attempt to introduce extradition laws that would expose citizens to prosecution in mainland China sparked the protests and the imposition of colonial-era emergency powers have also shaken investor confidence.

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“If you’re an investor, even a non-local one with Hong Kong structures as a family office, how can you base your future on a system that may not be there as long as you thought it would be?” Krancenblum said. “This is a very big problem. Investors, and families, care about stability.”

The instability may already be having an impact, with Goldman Sachs Group Inc. estimating that there has been an outflow of Hong Kong dollar deposits of between $3 billion to $4 billion to Singapore.

Hedge Funds

“We’ve seen some of our Hong Kong-based managed clients that have said they want to move their assets from Hong Kong-based banks to Singapore-based banks,” said Steve Knabl, chief operating officer of Swiss-Asia Financial Services Pte, whose platform hosts hedge funds and wealth managers. “So the move is clearly there, especially from private clients.”

While many hedge funds are seeking advice from lawyers, accountants and migration agents, few are actually moving, and Knabl said he didn’t expect an overnight shift in staff from Hong Kong to Singapore.

Eurekahedge Pte data show assets under management by Hong Kong hedge funds reached a record high $92.1 billion in September.

This is partly because the months-long process needed to get a license in Singapore can be a deterrent to moving. Hong Kong also remains a better gateway for hedge funds seeking to profit from mainland China without the downsides of living there.