Date Published: 14 February 2020
Authors and Contributors: Pradeep Kumar Singh, Wong Pei-Ling and Marvin Chua.
The Global Investor Programme (“GIP”), which allows eligible foreign investors and their family members to apply for Singapore Permanent Residence (“PR”), will be significantly enhanced with effect from 1 March 2020. The GIP is an initiative administered by Contact Singapore, a division of the Economic Development Board.
With the changes, next-generation business owners, founders of fast-growing companies from certain industries and family office principals will stand to qualify for PR status through GIP.
The changes to the eligibility criteria for GIP including new categories of foreign investors and conditions for the renewal of PR status are summarized below.
Established Business Owners
Presently, a foreign investor with a substantial business track record and successful entrepreneurial background may be eligible for GIP if he, amongst other criteria, has been running a business for at least 3 years and owns a company with an annual turnover of at least S$50 million. With effect from 1 March 2020, such a foreign investor will be assessed for GIP under the profile of an established business owner, and will, amongst other criteria, be required to own a company with an annual turnover of at least S$200 million to be eligible for GIP.
A summary of the key changes to the eligibility criteria applicable to established business owners is set out in the following table:
A foreign investor who does not meet the eligibility criteria for GIP that are applicable to an established business owner may still be eligible to apply for GIP. He may apply for GIP under one of the following profiles:
- next generation business owner;
- founder of a fast-growing company; or
- principal of a family office.
Next Generation Business Owners (New Category)
A foreign investor without a substantial business track record and successful entrepreneurial background may still be eligible for GIP if he is from a family with a successful business track record. In particular, he will be required to show that, amongst other criteria, he is part of the management team of his family’s company which has an annual turnover of at least S$500 million.
A summary of the eligibility criteria applicable to a next generation business owner is set out in the following table:
Founders of Fast Growth Companies (New Category)
If a foreign investor is unable to show that he or his family has a substantial business track record, he may still be eligible for GIP if he, amongst other criteria, owns a company which is invested into by reputable investors and which has valuation of at least S$500 million.
A summary of the eligibility criteria applicable to a founder of a fast-growing company is set out in the following table:
Family Office Principals
Presently, a foreign investor may be eligible for GIP via the family office route if he, amongst other criteria, has at least 5 years of experience investing in or managing a business and a net worth of at least S$400 million. With effect from 1 March 2020, such a foreign investor will be assessed for GIP under the profile of a family office principal, and will, amongst other criteria, be required to have at least S$200 million of investible assets to be eligible for GIP.
A summary of the key changes to the eligibility criteria applicable to family office principals is set out in the following table:
Renewal of PR status
If a foreign investor is granted PR status under the GIP, he will be issued with a Re-Entry Permit (“REP”), which allows him to maintain PR status even when he is out of Singapore. The REP is valid for 5 years and may be renewed if the renewal conditions are fulfilled.
With effect from 1 March 2020, the renewal conditions will be amended such that a foreign investor is no longer assessed with reference to the third-year milestones indicated in the business plan submitted during the application for GIP.
A summary of the key changes to the renewal conditions are set out in the tables below:
3-year renewals
5-year renewals
Conclusion
The new qualifying criteria places emphasis on high-performing companies with a view to create more economic and job opportunities in Singapore, This is likely in tandem with the shift in the global economy over the past few years which has resulted in the birth of a new breed of entrepreneurs and business owners such as owners of high growth technology companies.
While the amendments appear to broaden the pool of foreign investors qualifying for GIP, the segregation of foreign investors into distinct categories, and the introduction of separate qualifying criteria for each category mean that the bar has been lifted higher for some of the foreign investors. Increasingly, it will be harder for established business owners and entrepreneurs to qualify for PR status under the GIP unless they meet the new requirements.
Interested investors may wish to note that as long as the application for GIP is submitted prior to 1 March 2020, the existing conditions for renewal of PR status would apply to the foreign investor, even if the GIP application is approved from 1 March 2020 onwards.
Disclaimer: This update is provided to you for general information and should not be relied upon as legal advice.
CNPLaw’s Immigration Lawyers
With our understanding of the complexities and sensitivities of immigration laws and policies in Singapore, we provide assistance and guidance to our clients on immigration applications for Singapore permanent residence and Singapore citizenship with the aim of presenting a stronger and more compelling case for the approval of such applications.
Generally, a family office is an entity that assumes the day-to-day management and administration of the assets and wealth of high net worth individuals or families. Wealth preservation and growth are common objectives when establishing a family office, and clients may consider using such a vehicle to focus on the functions of investment management, tax planning, estate and succession planning, and philanthropic planning.
As clients will often enter into arrangements with professional advisors for wealth management services, we work closely with our corporate practice and funds practice to advise our clients on the structure of their family office, ensuring that such arrangements achieve our clients’ goals and are in compliance with Singapore law.
Private equity can be a viable source of financing for companies that do not wish to increase their leverage. While the introduction of private equity can help take a company to the next level of its development, the competing interests involved can derail the very growth that such transactions are intended to accelerate if they are not properly managed.
With years of experience overseeing private equity transactions (acting for both private equity investors and companies seeking to raise funds), our lawyers have an acute sense of the interests of both sides and are adept at managing investor relations. This ability to put themselves in the shoes of each party enables our lawyers to identify overlapping interests and pre-empt potential areas of conflict on issues such as the management of the company and the degree of investor protection.
Practice Areas:
Private Equity, Family Offices and Immigration (Private Clients)