Singapore: Introducing The Global Investor Programme In Singapore

The Global Investor Programme (GIP) awards Singapore Permanent Resident (PR) status to eligible global investors who intend to drive their businesses and investment growth from and within Singapore. Nicholas Tan, Manager Private Wealth in Singapore, provides an update on the requirements that are likely to impact High Net Worth Individuals (HNWIs).

What's the Global Investor Programme?

Applicants for the GIP would generally have a substantial business track record and a successful entrepreneurial background to qualify. 

Applicants would also need to choose an investment option under which they'd apply for Singapore PR status for themselves and their dependants. If approved, Singapore PR status would be granted for an initial five-year period and would be subject to recently refined renewal criteria. The criteria for a three or five year renewal would generally include local business spending requirements, headcount requirements and a requirement for the applicant or their dependants to spend at least half their time in Singapore.

Singapore has earned its reputation as one of the most business-friendly jurisdictions in the world. Its pro-business environment - a combination of political stability, well-established healthcare structure, a trustworthy legal system and a well thought out tax regime - has made it a global hub for corporate and financial services activities.

The reasons applicants opt for the GIP is wide and varied. From potentially obtaining Singapore citizenship in the long run to relocating to be close to their business headquarters, the end goal for these global investors is usually the same; that's to establish and maintain significant substance and presence in Singapore over the medium to long term.

The list of approved industries that global investors may use to qualify under the GIP is as follows:

What are the changes and updates to the GIP?

Previously, GIP only catered to one group of global investors, which was "Established Business Owners". 

With effect from 1 March 2020, three additional categories of global investors have been included and are now catered for under the GIP namely "Next Generation Business Owners", "Founders of Fast Growth Companies" and "Family Office Principals"; albeit with varying criteria for application under each category.

For "Established Business Owners", the minimum average annual revenue requirement has now been increased to S$200 million, up from S$50 million previously (derived from the applicant's existing business). However, applicants may consider consolidating up to two of their businesses from the list of approved industries in order to meet the minimum average annual revenue requirement. All other requirements (such as shareholding percentages and successful track record) relevant to this category of global investors remain unchanged. 

For the new category of "Next Generation Business Owners", aside from being engaged in one or more of the approved industries, the new requirements include:

1. Applicant's immediate family should either be the largest shareholder of or hold at least 30% of the shareholdings of the company that the applicant uses to qualify 
2. Minimum average annual revenue requirement for this company would be at least S$500 million per annum over the last three years, and at least S$500 million in the year immediately preceding application
3. Applicant would need to be part of the management team of the company (e.g. c-suite/board of director)

For the new category of "Founders of Fast Growth Companies", aside from being engaged in one or more of the approved industries, the new requirements include:

1. Applicant must be the founder and one of the largest individual shareholders of the company that the applicant uses to qualify
2. Company has a valuation of at least S$500 million
3. The company must have been invested into by reputable venture capital and private equity firms

 For the new category of "Family Office Principals":

1. The applicant must possess at least five years of entrepreneurial investment or management track record
2. The applicant must have net investible assets of at least S$200 million which would include all financial assets, such as bank deposits, capital market products, collective investment schemes, premiums paid in respect of life insurance policies and other investment products excluding real estate.

Prior to the latest round of updates, global investors could apply for the GIP under two options (either A or B). With effect from 1 March 2020, a new investment option "Option C", colloquially known as the Family Office option, is now available and formalises a previously unpublished option of investing into a new or existing Singapore-based Single Family Office.

The three investment options under which global investors can apply for the GIP are now as follows:

• Option A: Invest S$2.5 million in a new business entity or in the expansion of an existing business operation
• Option B: Invest S$2.5 million in a GIP fund that invests in Singapore-based companies
• Option C: Invest S$2.5 million in a new or existing Singaporebased Single Family Office having assets under management (AUM*) of at least S$200 million [offshore assets can qualify as part of AUM, provided at least S$50 million investible AUM has been transferred into and held in Singapore].

"Established Business Owners", "Next Generation Business Owners" and "Founders of Fast Growth Companies" will now be able to apply for the GIP under any of the options here.

"Family Office Principals" however, will only be able to apply for the GIP under Option C.

A quick summary of the latest GIP updates:

• New categories for qualifying investors seek to entice and encourage global entrepreneurs from the pool of founders of fast growth companies, and next generation business owners, to move their business headquarters to Singapore and to relocate themselves and/or their families.
• The formal inclusion of the Family Office option ties in nicely with the existing tax incentives regime for funds (Section 13X and 13R) that family offices currently apply for in addition to the licensing exemptions of Single Family Offices.
• The AUM for the Family Office option remains at S$200 million but only S$50 million needs to be transferred into and held in Singapore.
• Applicants now don't need to spend more than half of their time in Singapore, provided that their dependants do so.

"As part of our Effortless Expansion model, we're able to provide clients with a truly seamless and efficient implementation and ongoing administration of the structures they establish under the GIP" said Nicholas Tan, Private Wealth Manager based in Singapore. We're well placed to assist business owners who wish to expand into and from Singapore to achieve their goals via the GIP. 

Originally published 29 April, 2020

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.