Dimes and Riches: The Wealthiest and Sweetest Man in Malaysia — Robert Kuok

work in progress!

Robert Kuok is, and has been for over 20 years, the richest man in Malaysia. ¹

“Business is about one individual getting to know another individual and then another, and so on.” ²

Hong Kong

Nowadays, Robert Kuok lives in Hong Kong, though he retains his Malaysian citizenship.

Why? To put it simply, government policies.

“The principal reason that I elected to move to Hong Kong in the 1970s was taxation. At that time, it almost appeared as though the Singapore and Malaysian governments were competing with each other to see which could levy the highest taxes on those who were generating wealth for the nations.” ²

“By comparison, Hong Kong’s tax environment encouraged business. You only paid 17 per cent corporate tax, so you were better off by 33 cents on every dollar of profit.” ²

The reason for this difference lies in the way these countries’ governments decided to develop their economies. The Hong Kong government followed a more laissez-faire principle, with minimal government intervention in business affairs.

In contrast, The Singapore government adopted an interventionist approach to develop its economy ³. This meant higher taxes, not only on businesses (corporate taxes) but also on individuals!

This is an important distinction in economics. A free market is based on the laissez-faire principle (in French, laissez-faire literally means “allow to do”).⁴ In an ideal free market, the prices of goods and services are determined only by supply and demand, expressed by sellers and buyers. In simple terms, the more people want something, and/or the less of that thing there is, the more expensive it becomes.

On the other hand, a regulated market is rooted in government interventionism. For example, in Malaysia, the price of local white rice cannot exceed RM 2.60 per kilogramme ⁵.

In real life, however, no countries have completely free markets. Most countries practice some degree of government intervention to prevent market failures. ⁴

The difference in tax rates persists today, although the difference is lower compared to when Kuok first moved to Hong Kong: Singapore’s corporate tax rate is a flat 17% ⁶, while Hong Kong’s is 8.25% for the first $2,000,000 and 16.5% thereafter ⁷.