Bar raised for investors in search of PR status
Company turnover must be at least $200m in property sector, $50m in others
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Company turnover must be at least $200m in property sector, $50m in others
Jamie Lee
18 April 2012
First a scheme that allowed rich foreigners to fast-track their permanent resident applications was scrapped. Now the bar has been raised for entrepreneurs from abroad who seek PR status by investing in Singapore.
Fresh updates made by the Economic Development Board (EDB) showed that criteria for the Global Investor Programme (GIP) - have been tightened.
EDB, which administers the GIP programme with the Ministry of Manpower through Contact Singapore, updated its website on Monday to say that GIP applicants need to be entrepreneurs whose companies have made at least $50 million in the most recent year, and at least $50 million per annum on average for the last three years.
Previously, entrepreneurs needed only to show a company turnover of $30 million per year. This applied to all sectors.
Now a new and stricter exception has been created for entrepreneurs making their mark in the real estate or construction business.
They must show that their companies have a turnover of least $200 million in the most recent year, and at least $200 million per annum on average for the last three years.
The tougher criteria come on the heels of moves to scrap the the Financial Investor Scheme (FIS) - which also targeted rich foreigners seeking PR status here. FIS will wind down by the end of this month. When BT reported on this, it was pointed out that wealthy foreigners could still apply to become PRs under GIP.
Now that bar is also higher, especially for those in the property sector.
Ku Swee Yong, CEO of International Property Advisor, put the requirement to have a turnover of $200 million in perspective. "A $200 million project could merely mean about 200 units of apartments costing $1 million each," he said.
Song Seng Wun, head of research at CIMB, added that Singapore has shifted its focus to productivity, and the construction sector relies on cheap labour.
The emphasis would be on applicants that have run much bigger construction firms as a result, he noted.
EDB added that if the entrepreneur's company is privately owned, he must have at least 30 per cent shareholding in the firm.
Before this, EDB did not spell out the percentage of share ownership that an entrepreneur should hold in the company, though it said that his stake in the company, as well as the role that he plays in the firm, would be taken into account.
EDB also previously allowed senior corporate managers without an entrepreneurial background to apply, as long as they fulfilled certain criteria, such as a minimum 10-year experience.
This option is no longer explicitly spelt out for potential applicants, though EDB stated that interested parties would need a successful entrepreneurial background and a substantial business track record.
Businessmen who fit EDB's terms must then invest at least $2.5 million in a new business entity here or to expand an existing business operation. Otherwise, they can invest at least $2.5 million in one of the funds offered under the GIP scheme that invests in Singapore-based firms.
These options are unchanged from before.
Such GIP funds include a venture capital fund run by United Overseas Bank, and another managed by Tembusu Partners. Many of these funds have a Chinese presence, offering overseas representative contacts in Beijing and Shanghai.
EDB noted that once the individual's PR status has been formalised, he will be issued a re-entry permit (REP) that is valid for five years. This enables him to retain his PR status while away from Singapore.
After those five years, the businessman can qualify for a three-year renewal of his REP if he invests that $2.5 million, and either sets up a business here with five or more Singaporean employees and incurs at least $1 million in total business spending a year, or has both he and his dependants residing here for more than half of the time.
BT was unable to contact EDB for further comments by press time.
By comparison, FIS had allowed high net worth individuals from overseas with net personal assets of $20 million - and at least $10 million of assets parked in Singapore for five years - to apply for PR status speedily.
One clear attraction was that up to $2 million of the $10 million held by wealthy foreigners here could be used to buy private residential property.
"Singapore is partly coping with the problems of success," said Chua Hak Bin, an economist at Bank of America Merrill Lynch.
"Becoming an attractive place for foreign talent to set up business has probably drawn in a lot more applications than Singapore can readily cope with, given its geographical limitations."