This wealth hub is raising residency hurdles as popularity grows

Foreigners seeking permanent residency in Singapore through the Global Investor Programme (GIP) will soon have to stake larger investment quanta in order to qualify. From March 15, the GIP will require individuals to invest at least $10 million in a business or $25 million in an approved fund. Establishing a single family office under the GIP will now require at least $50 million to be deployed and maintained in any of four investment categories.

The old requirements will continue to apply for existing GIP PRs and applications received before March 15.

The tougher requirements come amid a non-stop stream of reports on how Singapore, with its business and money friendly policies, is drawing a growing number of rich foreigners to park their money here in the form of family offices or other structures. As of last year, family offices here number around 700 — a popularly bandied about, but unofficial figure — up from 400 the year earlier.

The GIP was last revised in March 2020, when changes were made to address the emergence of new breeds of business owners, including founders of fast-growing tech companies and family office principals. Between 2020 and 2022, an average of 60 investors were accorded PR status through the GIP annually.

In a media release on March 2, the Economic Development Board (EDB) says the changes are meant to direct more support to the local start-up ecosystem and the broader financial sector, as well as generate more “good jobs” for Singaporeans.

With many jurisdictions “competing to attract high-calibre business owners and owners of capital”, EDB, a statutory board under the Ministry of Trade and Industry, says it aims to selectively attract individuals with the abilities to create greater economic impact for Singapore and the “affinity” to be “more rooted” to the country.

The GIP accords PR status to global investors who meet any one of the programme’s three investment criteria. Each has additional requirements for such PRs to get their re-entry permit (REP) renewed after five years — the criteria for which has also been updated (see “Summary of changes”).

According to EDB, these changes are part of its ongoing review of the GIP to ensure the programme’s effectiveness in attracting “only top-tier business owners” who are interested in driving the growth of their businesses and investments from Singapore.

In a world of elevated funding costs where competition for capital is getting fiercer, Desmond Teo, EY Asean private tax leader, says these updates to the GIP are “better-catered” to the changing needs of global investors and will place Singapore in a stronger position to attract global capital as a top-notch wealth management hub.

“With these updates, investment options are more targeted towards the needs of global investors with different investment approaches and objectives, covering established capital, risk capital and patient capital,” he adds. “This allows Singapore to attract a wider spectrum of global investors who can accomplish more locally. Specifically, these updates to the GIP continue to put Singapore at the forefront of attracting high-quality global investors.”

The revised investment options are not only expected to encourage the growth of businesses and capital accumulated in Singapore, but will also serve to boost employment opportunities for Singaporeans through direct and indirect channels, adds Teo.

Between 2011 and 2022, GIP investors created 24,699 jobs across a range of roles such as software engineers, researchers, and public relations professionals, says EDB.