Singapore makes it costlier for foreign businessmen to attain Permanent Residency under GIP

Singapore: Foreign businessmen in Singapore will have to invest significantly higher and hire more locals to qualify to become permanent residents under the Global Investor Programme (GIP) from March 15, making it more costly to be based in the city-state.

As per the changes announced by the Economic Development Board (EDB) on Thursday, foreign investors, including those keen on setting up family offices here, will have to channel additional funds to the local financial system and hire more locals, The Straits Times newspaper reported.

The new requirements will kick in on March 15 this year and generate more jobs for Singaporeans in the finance, tax, fund management and legal sector, the statutory body under the Ministry of Trade and Industry said.

The GIP, launched in 2004, accords permanent residency to eligible global investors who intend to drive their businesses and investment growth from Singapore. It was last revised in March 2020.

The programme is part of the government’s efforts to strengthen Singapore’s status as a crucial Asian node for high-growth technology companies and investment activities, to grow existing and new industries and create jobs for Singaporeans.

Changes to all three investment options under the GIP were announced on Thursday.

Under the first option, new investors would have to invest at least SGD 10 million inclusive of the existing paid-up capital in a new business entity or existing business operation in Singapore.

This is a significant increase from the SGD 2.5 million required earlier.

Applicants must hire at least 30 employees, with no less than half being Singapore citizens and 10 being new employees, to be eligible for the re-entry Permit Renewal after the initial five-year period.

Under the second option, applicants will be required to invest SGD 25 million in a GIP-selected fund shortlisted by the EDB.

Previously, applicants had to allocate only SGD 2.5 million in a GIP fund that invests at least 50 per cent in Singapore-based companies upon in-principle approval.

Under the third investment option, applicants will be required to establish a Singapore-based single-family office with assets under management of at least SGD 200 million, of which no less than SGD 50 million must be deployed and maintained in investment categories, such as companies listed on the Singapore Exchange’s mainboard and secondary Catalist board.

Noting that many jurisdictions worldwide are competing to attract high-calibre business owners and owners of capital, the Board said the changes are meant to “selectively attract individuals with the ability to make more economic impact for Singapore, and the affinity to be more rooted to Singapore”.

Matthew Lee, senior vice president of Contact Singapore, a division of EDB that oversees the GIP, said, “Since it was introduced, the GIP has been successful in attracting high-calibre applicants, who value Singapore’s stability, competitive business environment, skilled talent pool and global connectivity.” According to the report, between 2011 and 2022, GIP investors created 24,699 jobs, including software engineers, researchers and public relations practitioners, and between 2020 and 2022, 200 investors attained Singapore PR status through the programme.

Ernst and Young’s Asean private tax leader, Desmond Teo, said that in addition to encouraging the growth of businesses and capital accumulated in Singapore, refinements would also boost employment opportunities for Singaporeans.

The asset management industry here stands to gain as the programme applicants could be a rich source of funds for the GIP-select funds distributed by Singapore-based fund managers, Teo said, adding that another beneficiary will be the Singapore-based portfolio companies where these funds will invest.

“In a world of elevated funding costs where competition for capital is getting fiercer, these updates will place Singapore in a stronger position to attract global capital as a top-notch wealth management hub,” the report quoted Teo as saying.

Singapore is among several countries, including the United States, Britain, Canada and Australia, that offer what is popularly known as the “golden visa”, aimed at attracting high-net-worth individuals who can contribute to economic activity and boost investments.