Residence in Singapore
It is one of the Singaporean government’s objectives to attract talent to live and work in the country. The government’s intention is for foreigners to make Singapore their home by becoming permanent residents.
There are defined categories of foreigners who are eligible to apply for permanent residence. These include:
- Investors and Entrepreneurs under the Global Investor Program
- Employment Pass Holders under the Professional, Technical Personnel and Skilled Workers Scheme (PTS)
- Spouses and unmarried children of a Singapore Citizen or a Singapore Permanent Resident
- Aged parents of a Singapore citizen
Foreigners interested in working and living in Singapore may apply for in-principle approval for a residence permit by submitting an application before they enter Singapore, provided they satisfy the specific criteria. The advantage of obtaining permanent residence status is that the person is entitled to live and work in Singapore for at least five years.
A person holding an Employment Pass in Singapore may submit an application for permanent residence to the Immigration & Checkpoints Authority (ICA) after one year of employment and residence within Singapore. This is a very popular route for professional and highly skilled individuals, as no substantial investment is required to obtain these passes. Once permanent residence is obtained, the applicant no longer requires an Employment Pass, thereby giving the applicant more flexibility in his/her employment options.
Under the PTS, an applicant may include their spouse and unmarried children under 21 years of age in the permanent residence application.
The Global Investor Program is specifically for entrepreneurs or investors interested in making substantial financial investments in Singapore and is designed to attract wealthy foreign entrepreneurs and investors who wish to make Singapore their home.
The Global Investor Program
The Global Investor Program (GIP) has been designed for investors who are interested in starting up a business or investing in Singapore and thereby receiving Singapore Permanent Residence (PR) status.
Under the GIP, the investor can choose one of the following options:
Option A: Invest at least SGD 2.5 million in a new business entity or to expand an existing business operation
Option B: Invest at least SGD 2.5 million in a GIP-approved fund that invests in Singapore-based companies
Eligibility for Application
An investor is eligible to apply for PR under the GIP if he/she has a substantial business track record and a successful entrepreneurial background.
The investor must possess at least three years of entrepreneurial and business track record and must produce audited financial statements of his/her company for the last three years. If the company of the investor is in the real estate or construction-related industry, the company’s turnover must be at least SGD 200 million in the most recent year and at least SGD 200 million per annum on average for the last three years. If the investor’s company is in other sectors, the company’s turnover must be at least SGD 50 million in the most recent year and at least SGD 50 million per annum on average for the last three years.
Provisions for the Family
The spouse of the investor and his/her children (below 21 years old) are eligible to apply for PR under the GIP application. Male dependents will be liable for National Service.
Parents and unmarried children of the investor who are 21 years old and above are not eligible to be included in the GIP application for PR status, but instead, they can apply for a five-year Long Term Visit Pass.
Validity of Re-Entry Permit
Upon the formalisation of the PR status, the investor will be issued a Re-Entry Permit (REP). A valid REP is necessary whenever the PR wishes to travel in and out of Singapore. It enables a person to retain the PR status while away from Singapore.
Subsequent to the first five years, the REP would be renewed if the investor fulfils the following conditions:
For a three year renewal:
The investor must have fulfilled the investment conditions under Option A or Option B of the GIP; and either have set up a business in Singapore with five or more Singaporean employees and have incurred at least SGD 1 million in total business spending a year; or the investor or at least one of his/her dependants, who is also a PR under the GIP, must have resided in Singapore for more than half of the time.
For a five year renewal:
The investor must have fulfilled the investment conditions under Option A or Option B of the GIP; and must have set up a business in Singapore with five or more Singaporean employees and have incurred at least SGD 1 million in total business spending a year; and the investor and his/her dependents who are also PR under the GIP must have resided in Singapore for more than half of the time.
Taxation in Singapore
Singapore has a mild tax regime and over recent years has introduced tax regulations favoring foreign investors. The country has introduced various incentive schemes to attract investment, enabling the growth of businesses.
Singapore’s taxation system operates on a territorial basis. On an individual level, only local income derived from within the jurisdiction is taxable. Regardless of residence status, all foreign income is exempt, even if remitted to Singapore (unless remitted through a partnership in Singapore).
A Singaporean citizen is considered a tax resident if the individual normally resides in Singapore. A foreign resident is considered a tax resident if the individual is physically present or is employed for 183 days or more per tax year.
The ‘Not Ordinarily Resident’ (NOR) scheme is aimed at attracting global skills and provides various tax concessions for a five year period for those who have not been resident for three consecutive years previous to the application.
Singapore has a very narrow tax base of taxable income. Personal income tax rates are low and levies are at progressive rates of up to 20%.
Capital gains taxes are only levied in very limited circumstances. There are no gift taxes and estate duty was abolished in 2008.
The standard corporate tax rate for 2015 is 17%. Companies, both resident and non-resident, are taxed on income remitted to Singapore. Certain exemptions apply to resident companies regarding foreign remittances.
In 2008, a one-tier system of taxation was introduced providing for the exemption of income tax on dividends, regardless of the method of paying out.
Citizenship in Singapore
The Singapore passport is one of the most widely accepted in the world. It provides the holder with visa-free access to over 170 countries, including the Europe (EU), the Schengen area, the United States of America (US), Canada, China and others.
After two years of permanent residence in Singapore, it is possible to apply for Singaporean citizenship.
Singapore is a single citizenship country and this is strictly enforced. For this reason, Singapore is not attractive if you are interested in holding more than one citizenship and passport.
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