Introduction

Obtaining Singapore Citizenship (“SC”) can be done in a number of ways, all of which require proper planning and preparation. The most crucial requirement to apply for SC, amongst others, is for one to first be a Singapore Permanent Resident (“SPR”). At Sim Mong Teck & Partners, the 2 main ways our high-net-worth clients obtain SPR status is either by (i) first acquiring an Employment Pass (“EP”) through setting up a single family office (“SFO”) or an operating company, or (ii) undertaking the “fast-track” SPR route through the Global Investor Programme (“GIP”) if they meet the programme’s requirements.

Obtaining Singapore Citizenship

Being a SC is an eventual goal for many who are looking to establish themselves here permanently. The many benefits include healthcare, housing and parenthood benefits, education and child subsidies as well as the right to vote in elections. According to the Immigration & Checkpoints Authority (“ICA”), only the following individuals are eligible to apply for citizenship:

1. a SPR for at least 2 years and are aged 21 and above;
2. a SPR for at least 2 years and have been married to a Singapore citizen for at least 2 years;

• an unmarried child aged below 21 born within the context of a legal marriage to, or have been legally adopted by, a Singapore citizen;

1. a SPR studying in Singapore; and have been residing/living in Singapore for more than 3 years (of which, at least one year as a PR); and have passed at least one national exam or are in the Integrated Programme (“IP”); and
2. a SPR and an aged parent of a Singapore citizen.

Aside from being a SPR, the ICA also takes into account factors such as the individual’s family ties to Singaporeans, economic contributions, qualifications, age, family profile and length of residency, to assess the applicant’s ability to contribute to Singapore and integrate into our society, as well as his or her commitment to sinking roots. The processing time for SC applications would take about 12 months, and when the applicant receives Approval In-Principle, he/she has to complete the Singapore Citizenship Journey programme and other formalities (such as renunciation of foreign citizenship) before finally attending the Citizenship Ceremony at the final stage. Based on the criteria set out above, it is clear that first and foremost, only SPRs are eligible to apply for citizenship, with the exception of children born to or adopted by a Singaporean parent. As such, obtaining SPR is a crucial step that precedes obtaining SC, which confers on the individual the right to hold the world’s most powerful passport[1].

Acquiring Singapore Permanent Residence

Individuals who qualify to apply for SPR include those who have family ties to Singaporeans and/or SPRs, such as spouse of a SC or SPR, unmarried child aged below 21 years old, born within the context of a legal marriage to, or have been legally adopted by, a SC or SPR, and aged parent of a SC. Individuals who are currently working and living in Singapore, such as holders of an EP or S Pass and students studying in Singapore are also eligible to apply for SPR. The S Pass is for foreign skilled workers who are associate professionals and technicians (“APT”) and earn at least S$3,150 (or S$3,650 for those in financial services). Once issued by the Ministry of Manpower (“MOM”), the S Pass is valid for up to 2 years and can be renewed for up to another 3 years thereafter, subject to conditions and MOM’s approval.

Upon acquiring SPR status, a Re-Entry Permit (“REP”) that is renewable every 5 years (subject to conditions) will be issued. The REP allows a SPR to retain permanent residence status while traveling or remaining abroad. With the myriad of benefits as a SPR, it comes as no surprise that there is high demand to acquire SPR status. Since 2010, the average number of SPR approvals has remained consistently at 30,000 each year, the result of a conscious effort by the government to keep the pace of immigration measured and stable so that Singapore remains a cohesive society and a good home for all Singaporeans.[2] The limited number of SPR approvals granted each year means that applying for SPR is highly competitive, and the ICA would look at each application holistically when exercising its discretion on whether to grant approval. For those without family ties to Singaporeans or SPRs, there are 2 main ways to obtain SPR – applicants can obtain an EP first to be eligible to apply for SPR or, if they meet the requirements, be an investor in the GIP for a fast-track route to obtaining SPR.

Obtaining an Employment Pass

For high-net-worth individuals, obtaining an EP can be done either by setting up a SFO or an operating company in Singapore. The main motivation for setting up a SFO is typically for wealth preservation, legacy planning, managing the family’s affairs and family-owned businesses, and philanthropic activities. The SFO structure can enjoy S13O or S13U tax exemption granted by the Monetary Authority of Singapore (“MAS”) if it meets the requirements (subject to MAS approval). Setting up a SFO normally entails incorporating at least two Singapore companies, one being the fund company (“Fundco”) and the other being the fund management company (“FMC”). On the other hand, an operating company carries out commercial business operations, typically involving trading activities for goods and services. The operating company would be incorporated after determining the type of company to be set up, its registered Singapore address, the appointment of the requisite directors, company secretary and other key personnel, the share capital of the company and its shareholders. Aside from having to comply with filing and regulatory obligations, an operating company would usually hire employees to carry out the day-to-day management and business operations of the company.

The FMC of the SFO structure would need to hire investment professionals to manage the assets in the Fundco, just as how an operating company would need to hire employees to run the business. For investment professionals who are foreigners, they would require an EP granted by the MOM, to be gainfully employed in the FMC. Investment professionals need to have the requisite qualifications and experience to be able to manage the FMC and carry out their investment duties competently. An operating company, on the other hand, is required to pay a minimum salary of S$5,000 per month for the foreign employee looking to obtain an EP, and the applicant must score sufficient points under the Complementarity Assessment Framework (“COMPASS”) which was introduced by the MOM in September 2023. Approvals for EPs are at the discretion of the MOM and once approved, EPs are valid for 2 years and can be renewed for another 3 years thereafter. As mentioned, EP holders are eligible to apply for SPR, but approvals are at the ICA’s discretion and they consider a myriad of factors before granting SPR approval. These include the individual’s family ties to Singaporeans, economic contributions, qualifications, age, family profile and length of residency, to assess the applicant’s ability to contribute to Singapore and integrate into our society, as well as his or her commitment to sinking roots in Singapore. Applicants who do not have an EP and are looking for an alternative path to acquire SPR within a shorter timeframe may consider the GIP if they meet the requirements.

The Global Investor Programme

The GIP is a scheme administered by Contact Singapore, a division of the Economic Development Board (“EDB”) that offers SPR to entrepreneurs and business owners who are interested to relocate to Singapore. These individuals qualify for the programme if they satisfy the eligibility criteria and are able to fulfil 1 of the 3 investment options. From 2020 to 2022, approximately 200 individuals have successfully obtained SPR through the GIP.[3] Eligible applicants can choose between investment Option A (invest in a new or existing business entity in Singapore), Option B (invest in a GIP-select fund) or Option C (establish and invest in a Singapore-based Single-Family Office), and each option involves investing a stipulated minimum amount of funds in the investment method as prescribed.

Interested applicants must satisfy one of the 4 qualifying profiles to participate in the scheme. The applicant must either be (i) an established business owner, (ii) a next generation business owner, (iii) a founder of a fast growth company, or (iv) a family office principal. Generally, the main requirement underpinning the 4 qualifying profiles is that the applicant must possess entrepreneurial and/or business track record. The applicant’s company must also be in at least one of the designated industries specified by the EDB, except for the family office principal profile which has no restrictions in relation to the applicant’s trade or business. Additionally, if the applicant so chooses, the applicant can include his whole family in the application as well to acquire SPR status, which extends to the spouse and unmarried children under the age of 21 (male dependant applicants are subject to National Service obligations). Parents and unmarried children aged 21 and above can apply for a Long-Term Visit Pass and Dependant’s Pass respectively, tied to the validity of the main applicant’s REP which is renewable for a period of either 3 or 5 years subject to conditions.

Conclusion

 The journey to be a citizen may appear to be a long and arduous one, especially for a foreigner who has just arrived in Singapore and looking to obtain an EP as a first step to work and live here. However, being a Singaporean requires one to be integrated into society with an understanding and appreciation of the country, and many EP holders would find that the time spent to build a life here and establish a home and family help greatly to lay the crucial foundation for getting SPR and eventually obtaining citizenship. For those who meet the GIP requirements and travel to Singapore often enough to call it a second home, a quicker and more straightforward way to obtain SPR for eventual citizenship is by investing in the GIP, which confers on the applicant (and his family) SPR status, provided that all the GIP conditions are met and the application is approved. Being a Singaporean is more than just a change of passport, as it entails establishing oneself in Singapore permanently and pledging an allegiance to a country that would be home for the long haul. As such, citizenship approvals are entirely discretionary and the ICA takes a holistic and serious view when assessing the applicant’s ability to contribute to Singapore and integrate themselves among Singaporean society, including the potential impact of new citizens on financial stability, economic growth, national security and population policies.

SMTP’s experience

As a private client firm, SMTP has helped many clients set up SFOs and operating companies. Our Immigration and Family Offices department has a wealth of experience in EP applications and any subsequent EP conversions to SPR, as well as eventual applications for SC. Our firm has successfully obtained approvals for the S13O or S13U tax incentives schemes for SFOs, and we are adept at navigating the GIP process to obtain SPR statuses and renew REPs for our high-net-worth clients and their family members, including any subsequent conversions to SC. Our lawyers work closely with clients and their advisors, adopting a tailored approach to address families’ specific needs and requirements.

Should you or your clients require any assistance or advice, please feel free to contact our Business Development Team to schedule a consultation.

[1] https://www.straitstimes.com/singapore/singapore-passport-replaces-japan-s-as-world-s-most-powerful

[2] https://www.mha.gov.sg/mediaroom/parliamentary/written-reply-to-pq-on-the-number-of-permanent-residence-status-granted-in-2021/

[3] https://www.mti.gov.sg/Newsroom/Parliamentary-Replies/2023/02/Oral-reply-to-PQ-on-Global-Investor-Programme