I. Introduction

Attracting high-calibre business owners and high-net-worth individuals has long been a priority of Singapore, as it entrenches itself as a global wealth management hub. The Global Investor Programme (GIP) is one of the many schemes available to such individuals. Under the GIP, eligible global investors can apply under one of three options to be accorded Singapore Permanent Resident (PR) status for themselves and their families.

In a bid to attract higher quality investors and individuals interested in obtaining Singapore PR status, the Singapore Economic Development Board (EDB) announced on 2 March 2023 several changes to the GIP’s application criteria which will take effect on 15 March 2023. Under the new requirements, individuals seeking to apply for Singapore PR status under the GIP are now required to invest more in Singapore.

In this client alert, we will outline the key changes to the GIP’s criteria and comment on how the more stringent criteria might affect high-net-worth individuals who are interested in migrating to Singapore under the GIP.

These changes will take effect from 15 March 2023. GIP applications that were submitted prior to this date are not affected.

II. Option A

Option A is available for established business owners, next generation business owners and founders of fast growth companies. Typical applicants include established business owners who are looking to expand their existing business operations in Singapore.

Previously, applicants were required to invest S$2.5 million in a new business entity or an existing business operation in Singapore. Once approved, applicants would be accorded with Singapore PR status for five years, after which they would need to renew it by fulfilling specified conditions (Renewal Conditions). As part of the previous Renewal Conditions for Option A, applicants had to hire at least 10 employees, of which at least 5 must be Singapore Citizens (SCs), and incur an annual total business expenditure of S$2 million.

Under the updated Option A, applicants will be required to have:

1. Invested at least S$10 million, inclusive of existing paid-up capital, in a new business entity or existing business operation in Singapore; and
2. Hired minimally 30 employees, at least half of whom must be Singapore Citizens and 10 of whom must be new employees, as part of the Renewal Conditions.

The diagram below highlights the differences between the old and new requirements for Option A.

III. Option B

In comparison to Option A, Option B is more suitable for applicants looking to invest, rather than expand existing business operations in Singapore.

Previously, applicants were required to invest S$2.5 million in a GIP fund that invests at least 50% in Singapore-based companies. As part of the previous Renewal Conditions for Option B, applicants had to hire at least 10 employees, of which at least 5 must be SCs, and incur annual total business expenditure of S$2 million.

Under the updated Option B, applicants will be required to:

1. Invest S$25 million in a GIP-select fund; and
2. Maintain this investment in the GIP-select fund as part of the Renewal Conditions.

The diagram below highlights the differences between the old and new requirements for Option B.

IV. Option C

Option C is targeted at Family Office Principals or high-net-worth individuals looking to set up their family office in Singapore and migrate to Singapore.

Previously, applicants were required to invest S$2.5 million in a new or existing Singapore-based Single-Family Office (SFO) with Assets-Under-Management (AUM) of at least S$200 million, of which at least S$50 million must be held in Singapore. As part of the previous Renewal Conditions, applicants had to hire at least 10 employees, of which at least 5 must be SCs and 3 must be investment professionals, and incur annual total business expenditure of S$2 million.

Under the updated Option C, applicants will be required to:  

1. Establish a Singapore-based SFO with AUM of at least S$200 million, of which at least S$50 million must be deployed and maintained in any of the following four investment categories:
1. Companies listed on exchanges licensed by the Monetary Authority of Singapore (MAS) e.g., SGX Mainboard and Catalist;
2. Qualifying debt securities such as bonds, notes, commercial papers, and certificates of deposit that are listed on MAS’ Qualifying Debt Securities Enquiry System;
3. Funds distributed by Singapore-licensed managers that are listed on MAS’ Financial Institutions Directory; and
4. Private equity injection into non-listed, Singapore-based businesses.
2. As part of the Renewal Conditions, maintain at least S$50 million AUM across any of the 4 investment categories throughout the 5 years the applicant was accorded Singapore PR status and hire at least 5 incremental Family Office professionals, of which at least 3 must be SCs.

The diagram below highlights the differences between the old and new requirements for Option C.

V. Concluding thoughts

In our view, the increased requirements are largely in line with the MAS’ raising of the bar for family offices and funds to qualify for tax incentives in April 2022. Both institutions have raised the bar for high-net-worth individuals to benefit from setting up their family offices in Singapore – in the context of the MAS, to obtain a tax incentive which facilitates the operation of the family office; in this case, to obtain Singapore PR via the GIP. This is a concerted effort by the Singapore government to attract higher-quality applicants and those who can make a greater economic impact on Singapore. Moreover, the more stringent Renewal Conditions are intended to attract high quality investors who are genuinely interested in establishing roots in Singapore, investing a significant amount of wealth into their business or investment portfolio in Singapore, and in turn creating employment opportunities for the Singapore workforce and increasing work for service providers. It might deter investors who simply want to obtain Singapore PR via a “Golden Visa” – which is what Singapore seeks to achieve. From 2020 to 2022, the EDB reported that only 200 PRs were issued under the GIP. This is a relatively small number and it is clear that applying for Singapore PR under the GIP remains a very exclusive route.

On the other hand, the new requirement to invest at least S$50m in Singapore under Option C is seen as a bid by Singapore to shore up her relatively languid capital markets scene. Allowing private equity injections into non-listed Singapore based business would lead to an increase in interest to invest into start-ups and early-stage entities. This also means that start-ups in Singapore can now look to family offices as prospective investors for fund-raising in Singapore.

The new requirements are not likely to slow down interest in family offices in Singapore. Family office principals can still set up family offices in Singapore, and can also obtain tax incentives for their family office structures by submitting their respective applications to the MAS without applying under the GIP, if they are not seeking PR status in Singapore. The MAS tax incentives and GIP are two distinct programmes with different objectives and purposes.

Therefore, clients looking to invest or expand their existing business operations in Singapore and who are considering to apply for the Global Investor Programme should be aware of the more stringent requirements. For the avoidance of doubt, the new requirements do not remove the existing Renewal Condition under all of the Options that the applicant and his/her dependants, who obtained PR under the applicant’s GIP application, must have resided in Singapore for more than half of the time.

Please feel free to get in touch with any of our key contacts if you are interested in the GIP or if you are interested in setting up a family office in Singapore.

Dentons Rodyk thanks and acknowledges Senior Associate Nicolette Lee, Associate Cho Joo Sam for their contributions to this article.

This article has been updated to add further clarification about the MAS tax incentives and the GIP as separate programmes in relation to family offices in Singapore on 27 March 2023.