Singapore Revises PR Scheme: Courting Investments
- Singapore’s government has made changes to its Global Investor Program to make it easier for foreign investors to apply for permanent residence (PR) status.
- Under the new changes, next-generation business owners, founders of fast-growing companies, and high-net-worth individuals can apply for PR if they make certain investments in Singapore.
- Foreign investors must invest in specific sectors in the country to be eligible.
The government has made changes to its Global Investor Program (GIP) to make it easier for foreign investors and entrepreneurs to attain permanent residence (PR).
The GIP was introduced in 2004 and is administered by Contact Singapore, a government agency whose function is to attract investors from all over the world to invest, work, and live in Singapore. Through this program, foreigners who invest at least S$2.5 million (US$1.79 million) can apply for PR.
Under the new changes, the government has set new criteria for GIP applicants. Next-generation business owners, founders of fast-growing companies, and ultra-high net worth individuals who want to set up a family office in Singapore can now qualify for PR status. Currently, only established entrepreneurs are eligible to apply for PR under GIP.
After applicants have passed these criteria, they must choose the form of their investment in Singapore. These are investing in a new or existing business entity in the country, investing in a GIP-approved fund, or invest in a new or existing Singapore-based, single-family office.Through these latest updates, the country is hoping to attract high-value companies that could provide job opportunities that reflect the changing needs of Singapore’s employment landscape, with professionals, managers, executives, and technicians set to make up two-thirds of the workforce by 2030.
Investors should seek the help of registered local advisors to better understand how they can benefit from these recent developments.
What is the GIP application process?
To gain GIP approval and ultimately gain PR status, foreign investors need to adhere to the following steps:
- Submit the online and hardcopy GIP forms to the Economic Development Board (EDB), a statutory board that plans strategies to maintain Singapore as a global hub for business and investment.
- The EDB will interview the applicant.
- If the applicant meets the criteria, the Immigration and Checkpoints Authority (ICA) will issue an Approval-in-Principal (AIP) status, which is valid for six months.
- The applicant will then need to invest under their selected investment option within six months from the issued AIP status.
- The applicant will need to provide evidence (bank statements, legal documents) to the EDB as proof the investment has been realized.
- The EDB will verify the evidence upon which the ICA will issue a final approval letter.
- The applicant can then formalize their PR status in Singapore. This must be completed within 12 months from the issuance of the final approval letter.
How can you qualify?
Investors can apply for GIP if they fall under the following threshold criteria:
Established business owners
An applicant’s current business will need to have an annual turnover of S$200 million (US$143 million), an increase from S$50 million (US$35 million) previously.
Business owners must have at least three years of a proven entrepreneurial or business track record and own a minimum of 30 percent of the company.
Additionally, the business should be engaged in one of the eligible industries listed below.
Next-generation business owners
The applicant’s business should have an annual turnover of S$500 million (US$359 million), and the applicant’s immediate family member must own 30 percent of the company. The company itself should be engaged in one of the businesses laid out for established business owners.
The business should be engaged in one of the eligible industries listed below.
Founders of fast-growth companies
In this new criterion, the applicant must be the founder and largest individual shareholder of a company. The company must have a valuation of at least S$500 million (US$359 million) and must be invested into by reputable venture capital or private equity firms.
Furthermore, the business should be engaged in one of the eligible industries listed below.
Family office principals
This criterion aims to attract individuals with net investable assets of at least S$200 million (US$143 million), who are looking to establish a family office in the country.Net investible assets include bank deposits, financial assets, capital market products, and other collective investment schemes. Moreover, the individual must possess at least five years of entrepreneurial, management, or investment record.
What are the eligible industries?
Established business owners, next-generation business owners, and founder of fast-growth companies must have a business in one of the following industries in order to qualify for the GIP:
- Aerospace engineering;
- Alternative energy/ clean technology;
- Consumer Business (for example, flavors and fragrances, food ingredients, nutrition, home and personal care);
- Engineering Services;
- Information and communication products and services;
- Logistics and supply chain management;
- Medical technology;
- Media and entertainment;
- Marine and offshore engineering;
- Natural resources (for example, metals, mining);
- Pharmaceuticals and biotechnology;
- Safety and security;
- Precision engineering;
- Professional services;
- Arts businesses;
- Visual arts businesses; and
- Performing arts businesses
- Sports businesses; and
- Family office and financial services.
What are the investment options?
Once an applicant has met one of the four threshold criteria, they can choose from three investment options in Singapore.
Applicants who choose option A must invest S$2.5 million (US$1.79 million) in a new or existing business in Singapore.
The applicant must submit a five-year business or investment plan, which highlights future expenditures and revenues. The business plan will be assessed on its feasibility, overall activities, capacity to create local jobs, as well as the applicant’s role in growing the company.
Through option B, the applicant must invest S$2.5 million (US$1.79 million) in a GIP-approved fund that invests in Singapore-based companies. The list of the approved funds can be found on the GIP website.
Applicants will be asses on their business or investment activities, capacity to create local jobs and any future investment plans.
As part of the changes to the GIP, the government has added option C in which applicants must invest S$2.5 million (US$1.79 million) in a new or existing Singapore-based single-family office.
Applicants will need to submit a five-year business or investment plan, which must contain employment and financial projections. The business or investment plan will be assessed on the applicant’s role in the family office and proposed investment sectors.