From March 15, foreign businessmen in Singapore will have to invest significantly more and hire more locals in order to qualify for the Global Investor Programme (Singapore Under GIP) and become permanent residents. This will make it more expensive to have a location in the city-state.
The Straits Times reported that as a result of the changes that were made public on Thursday by the Economic Development Board (EDB), foreign investors, such as those who are eager to establish family offices in Singapore, will be required to employ more locals and contribute additional funds to the local financial system.
The statutory body under the Ministry of Trade and Industry stated that the new requirements will take effect on March 15 of this year and will result in the creation of additional jobs for Singaporeans in the legal, financial, tax, and fund management sectors.
Since its inception in 2004, the Global Investor Program (Singapore Under GIP) has granted permanent residency to qualified foreign investors with the intention of expanding their businesses and investments in Singapore. The most recent update was in March 2020.
The program is part of the government’s plan to make Singapore a more important Asian hub for high-growth technology companies and investment, to expand both existing and new industries, and to create jobs for Singaporeans.
Permanent Residency under GIP
On Thursday, changes were made to all three GIP investment options.
New investors would be required to invest at least SGD 10 million, including the paid-up capital, in a new business entity or existing Singapore business operation under the first option.
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This is a significant increase from the previous requirement of SGD 2.5 million.
To be eligible for the re-entry permit renewal after the initial five-year period, applicants must hire at least 30 employees, half of whom must be Singapore citizens and ten must be new hires.
The second option requires applicants to invest SGD 25 million in a GIP-selected fund that has been shortlisted by the EDB.
Prior to the in-principle approval, applicants were only required to invest SGD 2.5 million in a GIP fund that invests at least 50% in Singapore-based businesses.
The third investment option requires applicants to set up a single-family office in Singapore with assets under management of at least SGD 200 million. Of those assets, at least SGD 50 million must be invested in companies listed on the Singapore Exchange’s mainboard and secondary Catalyst boards.
The Board stated that the modifications are intended to “selectively attract individuals with the ability to make more economic impact for Singapore, and the affinity to be more rooted to Singapore,” noting that numerous jurisdictions worldwide are competing to attract high-caliber business owners and capital owners.
“Since it was introduced, Singapore Under GIP has been successful in attracting high-caliber applicants, who value Singapore’s stability, competitive business environment, skilled talent pool, and global connectivity,” stated Matthew Lee, senior vice president of Contact Singapore, a division of EDB that oversees the GIP.
The report says that between 2011 and 2022, GIP investors created 24,699 jobs, including those for software engineers, researchers, and public relations professionals. Additionally, the program helped 200 investors become Singapore PRs.
Desmond Teo, leader of Ernst and Young’s Asean private tax, stated that refinements would not only increase employment opportunities for Singaporeans but also encourage the expansion of businesses and capital accumulated in Singapore.
Teo stated that the GIP-select funds distributed by Singapore-based fund managers will also benefit from the Singapore-based portfolio companies in which these funds will invest. As a result, the asset management industry in this country stands to benefit.
According to the report, Teo stated that these updates would put Singapore in a stronger position to attract global capital as a top-notch wealth management hub “in a world of elevated funding costs where competition for capital is getting fiercer.”
Singapore is one of several countries, along with the United States, Great Britain, Canada, and Australia, that provide what is commonly referred to as the “golden visa.” This visa is designed to attract wealthy individuals who are able to boost investments and contribute to economic activity.
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