Singapore is raising the permanent residence threshold for the ultra-rich

(Bloomberg) — Singapore is raising the threshold for global investors seeking permanent residency in an effort to create more jobs and benefit the local population through an influx of wealth.

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Applicants need a minimum of S$10 million ($7.4 million) in a company or S$25 million in an approved fund, the Singapore Economic Development Board said in a statement on Thursday. For those establishing family offices, at least S$50 million must be deployed and maintained in four government-designated investment categories.

That compares to a previous requirement of a S$2.5 million investment in a corporate entity, fund or Singapore-based single family office. The changes will take effect on March 15.

Singapore is addressing a perceived widening wealth gap caused in part by the arrival of wealthy families from abroad. The country’s infrastructure and stability have attracted a growing number of ultra-wealthy individuals, contributing to a spike in costs for everything from luxury cars to golf club memberships and condominiums.

The government is refining its policies by encouraging more local jobs and investment in the city-state’s stock market and funds. It announced in February a tax hike for more expensive properties and luxury cars.

The sophistication of the investment program will “stimulate business growth and accumulated capital in Singapore,” Desmond Teo, EY Asean private tax leader, said in a statement, adding that two winners will be the country’s wealth management industry and companies seeking funding. received.

Attract talent

The Global Investor Program was introduced in 2004 to attract the world’s richest people and provides a route to permanent residency.

From 2020 to 2022, approximately 200 permanent residence permits were issued. The design has also generated at least S$5.5 billion in investment and created more than 24,000 jobs. Approximately S$1.62 billion was injected into approved funds, 57% of which were invested in Singapore-based companies.

According to Henley & Partners, a provider of residence and citizenship planning, the city-state would gain about 2,800 high net worth individuals by 2022 alone. The company estimates that 249,800 residents there have a net worth of at least $1 million, making it the fifth richest city in the world.

Here is an overview of the available routes:

Option A

  • Invest at least S$10 million, including existing paid-up capital, in a new business entity or existing business operation in Singapore

  • Employ at least 30 employees, at least half of whom must be Singaporean citizens and 10 new employees, to be eligible for the extension of the re-entry permit beyond the initial five-year period

Option B

Option C

  • Requirement to establish a single family office in Singapore with assets under management of at least S$200 million

  • At least S$50 million must be deployed and maintained in these categories, which include companies listed on local exchanges, eligible debt securities, funds distributed by approved Singaporean licensed managers; or private equity injection into unlisted Singapore-based companies

(Updates with commentary from analysts everywhere)

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