ST : Tougher for investors to apply for PR status

Sep 28, 2010

Tougher for investors to apply for PR status

Minimum investment, turnover levels go up, and houses don't count

By Melissa Kok

FOREIGNERS who want to become Singapore permanent residents (PRs) under a scheme for investors must now meet stricter requirements.

Under new rules for the Global Investor Programme (GIP), they will have to more than double their investments here to $2.5 million.

Their companies must also have an annual turnover of $30 million - up from $10 million previously.

And they will no longer be allowed to count the cost of buying a private home as part of their required investment.

The changes - some of which take effect from this Friday - come on the heels of other measures by the Government to better manage the pace of the growth of immigrants.

The GIP is offered by Contact Singapore, an alliance of the Economic Development Board and the Manpower Ministry.

It was started in 2004 to ease the way for foreign entrepreneurs and businessmen to set up and run businesses here.

A spokesman for Contact Singapore would not say how many investors have become PRs this way.

As for the changes, the spokesman said they were intended 'to fine-tune the criteria and the mode of investment to ensure a higher calibre of investors who are participating in the programme'.

The amendments were announced without fanfare on the Contact Singapore website on Aug 31.

Currently, foreign entrepreneurs and businessmen applying for the GIP must have an annual company turnover of at least $10 million a year, and an average turnover of the same amount for the last three years.

That will be tripled to $30 million from this Friday.

How much they need to invest will also change.

Right now, GIP applicants must invest a minimum of $1 million. From January next year, this will be raised to $2.5 million.

Under current rules, those investing at least $2 million can use up to half the amount on an owner-occupied private home. That option will no longer be available.

Parents and parents-in-law will also be excluded from the main candidate's GIP application for PR status.

Although some of the changes take effect in January, applications received from this Friday will be subject to the new requirements as the average processing time for an application is eight months.

The changes follow the Government's move late last year to tighten the PR and citizenship framework. Those applying for PR status and citizenship now, for example, face more stringent eligibility criteria such as a higher income bar and residential requirements to ensure they can contribute to Singapore economically and also integrate well into society.

The tougher rules seem to have an effect.

Last year, 59,500 foreigners were granted PR status, compared with 79,200 in 2008. The slowdown becomes more apparent when comparing with the figures between April last year and the end of March this year, after the new rules kicked in. During this period, 46,300 foreigners were granted PR status.

The GIP is similar to other government schemes which aim to attract the wealthy by offering PR status. They include the Monetary Authority of Singapore's Financial Investor Scheme, targeted at foreigners with at least $20 million in net personal assets.

Other countries such as New Zealand, Australia and Canada offer similar schemes.

Mr Leong Wai Ho, senior regional economist at Barclays Capital, said the changes would not deter investors from applying for the scheme as most 'definitely will have more than that amount to invest'.

But he added: 'Removing the property option might be detrimental for the property market outlook in the near term, particularly in the top end, but it removes speculative pressure.'

Political observer Eugene Tan of the Singapore Management University said the changes show the Government is addressing the concerns of Singaporeans, particularly those who feel PR status is given away easily.

He said: 'In a way, it is raising the bar, and so that helps enhance the talent pool here.'

melk@sph.com.sg

Additional reporting by Amanda Tan


--------------------------------------------------------------------------------

Changes to the criteria



CURRENT RULES

1. Applicants with entrepreneurial experience and a business track record must have a company turnover of at least $10 million per annum in the most recent year, and at least $10 million per annum on average for the last three years.

2. In addition, applicants must make an investment. Their options:

· Invest at least $1 million in a new business start-up or expansion of an existing business operation.

· Those who invest at least $1.5 million can also choose to do so in a fund approved by the Global Investor Programme (GIP).

· For those who invest $2 million or more, up to 50 per cent of the amount can be in a private residential property occupied by the applicant.

3. Parents and parents-in-law of applicants are eligible for PR at an additional investment of $300,000 per person.

NEW RULES

From Oct 1, the company turnover requirement will be raised to at least $30 million per annum.

From Jan 1 next year:

· Minimum investment sum will be raised to at least $2.5 million.

· Money spent on residential property will no longer be considered part of the applicant's investments.

· Parents and parents-in-law are no longer eligible to be included in the candidate's GIP application for PR status. They can instead apply for a five-year Long Term Visit Pass, which is renewable and tied to the validity of the main applicant's re-entry permit.

· These changes will apply to all applications received from Oct 1.