Singapore permanent residency scheme
04 February 2020
While Singapore has long been an exciting and advantageous place in which to do business, the country has recently looked to position itself as the jurisdiction of choice for next-gen business owners and founders
Its Global Investor Program grants Permanent Residency to individuals who meet specific criteria.
In Asia, we see that there is a real drive from the next generation to diversify already hugely successful family businesses, and therefore this new cohort of leaders packs a punch in terms of what they can bring an economy. In this sense, Singapore has long recognized the immense potential of the next generation of business owners and the amendments to the GIP reflect their desire to attract these individuals.
Qualifying criteria for next-gen business owners
To qualify for the scheme, the next-gen business owner who is applying for residency must work in at least one of the specific industries classified by Singapore’s Economic Development Board and have an active role in the company (i.e., a position on the board or in the senior management team).
Likewise, they must be a member of the family that runs the business, and the family must be the largest shareholder of the firm or own at least 30% of the company’s shares. The company’s annual turnover must be equal to, or above SGD 500 million in the three previous years before the year the application is submitted (and in the year of the application).
It sounds like a high barrier to entry, but particularly in Asia, we see the next generation are increasingly at the helm or taking over businesses that would easily qualify them to meet these targets. Likewise, investing in a Singapore business entity, GIP-approved fund or family office which are also requirements of the scheme are often attractive propositions in any case.
As well as the next-gen business owners, Singapore has also set its sights on attracting more entrepreneurs who have successfully set up large, profitable businesses. To be applicable for the scheme, the applicant must be a founder (or majority shareholder) of a company that is worth at least SGD 500 million and has the backing of reputed private equity or venture capital firms.
A decade ago, founding a company that would eventually be valued at SGD 500 million took much longer than it might today, especially for Asian startups. In the future, we can expect to see the trend continue and increasingly founders of these companies will look to base themselves in jurisdictions like Singapore that can offer the business environment to help continue that growth.
A win-win for all
Attracting next-generation business owners and entrepreneurs is undoubtedly a move that will benefit Singapore’s economy, but the GIP presents significant advantages for the applicant. Singapore has always understood that to appeal to this kind of individual and investor over the long-term, it has to offer concrete advantages, and it does. Competitive corporate tax rates and tax regimes, extensive double-tax treaties, a strategic location in Asia, the stable economy and political system and forward-thinking government cement Singapore’s allure. The GIP offers a win-win for both the country and those approved under the scheme.