Disadvantages of SPR

 1

Click here to learn more about Singapore Permanent Residency in details such as eligibility, processing, guidelines, etc.

2

Click here to learn from the SUMMARY list of Privileges of Permanent Residency (PR) and comparison with foreigners (EP/PEP/EntrePass).

3

Click here to learn from the detailed list of BOTH Advantages / Pros and Disadvantages / Cons of becoming Permanent Resident or obtaining Permanent Residence (PR) status in Singapore.

4

Click here to learn from the detailed list of ONLY ADVANTAGES / Benefits / Pros of becoming Permanent Resident or obtaining Permanent Residence (PR) status in Singapore.

Please read the below Remarks before learning the features of PR in Singapore:

• When you are considering for applying Permanent Residence in Singapore, you may be interested to know the factual advantages and disadvantages. Every person will weigh the advantages and disadvantages at least somewhat differently, and nobody else can decide which characteristics of PR are more or less important to you.
• The below information is divided into three sections: Advantages, Disadvantages and Combination of Advantages/Disadvantages which are subject to be determined by any individual whether as an advantage, disadvantage or neutral.
• Some advantages may be disadvantages to other individuals and vice versa being the reasons that the features depend on the individual’s personal situations.
• This comparison, pros and cons list is not exhaustive.
• The rules and regulations are subject to change by the Government of Singapore.
• The information was updated on 25-Apr-2019 from the source of various Government Authorities in Singapore.
• You may wish to visit the relevant authorities’ websites for up to date rules, guidelines, policies, acts and laws in Singapore.
• You may wish to share your own opinions and experiences with us by emailing to biz@achibiz.com for our analysis and further updates.

Unfavourable Features / Drawbacks / Cons / Disadvantages of becoming PR in Singapore

Justifications to consider positively in case they seem to be negative

Minimum waiting time for purchasing of Public housing (HDB flat):

• PR couples can be eligible to lease the public HDB flat only after completing the waiting period of three years.
• In case the spouse is obtaining the PR status much later, then again the PR couple have to wait for the same three years period in order to buy an HDB flat.
• Eg: The husband is PR w.e.f. Jul-2017. The spouse is PR w.e.f. Apr-2019. Then the couple can be able to purchase an HDB flat only after Mar-2022 which is after completion of 3 years from the date of granting PR to the spouse.

• This waiting period for PRs is part of cooling measures for real estate market in Singapore by the Government.
• In order to avail the much lower public housing flat from HDB by purchasing an own flat, it is much worth when we compare with buying a private residential apartment which is generally very expensive in Singapore.
• Higher Stamp Duty also is applicable for purchasing such private residential apartment.

Lower Supplementary Retirement Scheme (SRS) contribution limits:

• PRs are more limited than foreigners in how much they can contribute annually to Singapore tax-advantaged SRS accounts.

• The limitation is due to the privilege of tax relief for CPF for PRs whereas the foreigners do not have such CPF contributions.

Not Ordinarily Resident (NOR) tax break curtail:

• In certain situations Singapore tax authority viz. IRAS offers a special income tax break to fairly highly compensated (or higher) individuals based in Singapore who spend a lot of time working outside Singapore. This tax break is called the Not Ordinarily Resident (NOR) Scheme.
• It may be very difficult to meet the full criteria for citizens and PRs to qualify for this particular tax break.

• NOR tax break is permitted based on the eligibility criteria and periodical reviews by the tax authority IRAS.

Levy or Entrance Fee to casinos in Singapore:

• Like citizens PRs also must pay the levy to access the two gambling areas / local integrated resorts (IRs).
• Levy can be chosen based on 24-hour daily levy or annual levy.

• Comparatively foreigners enjoy the free entrance to access the two gambling areas / local integrated resorts (IRs).

Limitations on other countries’ residence and benefits (exclusivity restrictions):

• Certain countries may bar Singapore (and other foreign) PRs from obtaining permanent residence and/or from enjoying certain tax breaks (and other benefits) available to residents.

• It depends on the individual countries’ national policies.

Features or Combination of both Advantages / Benefits / Pros (and Disadvantages / Drawback / Cons, may be in your own opinion) of becoming PR in Singapore

Justifications to consider positively in case they seem to be negative

National Service Liability / Obligations:

• Under the Enlistment Act, all male Singapore Citizens and Permanent Residents, unless exempted, are required to serve National Service (NS).
• Following the completion of full-time NS, they will be required to serve up to 40 days of Operationally Ready National Service (ORNS) per year for the duration of their ORNS training cycle, till the age of 50 years (for officers) or 40 years (for other ranks).
• Male applicants who are granted PR status as a Foreign Student or under their parents’ sponsorship are required to register for NS upon reaching 16½ years old and will be scheduled for enlistment at the earliest opportunity upon reaching 18 years old. Deferment from NS for university studies, regardless of whether such studies have begun, will not be granted. Those who are pursuing full-time GCE ’A’ Level or Polytechnic Diploma studies (or equivalent) may be granted deferment if they meet the deferment conditions stipulated by the Ministry of Defence.
• Males who are granted Singapore PR, and who were previously Singapore Citizens or Singapore Permanent Residents, are liable to be called up for NS regardless of the scheme under which their PR status was granted.
• Renouncing or losing one’s PR status without serving or completing full-time NS would have an adverse impact on any immediate or future applications to work, study or live in Singapore, or for Singapore citizenship or PR status. Renouncing or losing one’s PR status without serving or completing full-time NS may also adversely affect any immediate or future applications for renewal of Re-entry Permits made by one’s family members or sponsors.

• NS is very important – it is the bedrock of Singapore’s national defence because Singapore depends on a very strong defence for her survival, success and security.
• NS experience also provides young men with plenty of opportunities for personal growth.
• NS is not only of benefit to defence but also to society as a whole, and to NS men and their families.
• NS allows many Singaporean men and women a chance to come up close and personal with the tactics, equipment and training that have been created and deployed to safeguard the country. In Singapore, about half of the citizen population have been exposed to some form of tactical scenario or environment during NS.
• Given the need for a whole-of-nation approach to tackle the rising threat of terrorism, this will not only hold in good stead those called upon to serve in the face of a real threat, but may also play an important role for those who are involved as civilians.
• Basic training in how to deal with armed threats, how to evade and escape, or provide emergency medical treatment, can be invaluable in unfortunate situations as well.

Waiver of National Service obligations:

• NS obligations are waived for first generation PRs under the Professionals/Technical Personnel and Skilled Workers (PTS) and Investor Schemes.

• Males who get granted the PR status under the Professionals/Technical Personnel and Skilled Workers Scheme or the Investor Scheme, are exempted from NS.

Mandatory Central Provident Fund (CPF) contributions:

• Working PRs and their employers are required to contribute to Singapore’s mandatory national savings program, the Central Provident Fund.
• CPF is a comparatively safe and high yielding savings vehicle, and both contributions and earnings are Singapore tax free.
• CPF savings can be used for retirement and also for medical care, medical insurance, and certain real estate purchases in Singapore.
• Many individuals would voluntarily contribute to CPF if they could.
• However, there are some possible disadvantages. Take home pay is reduced compared to a similarly situated foreign worker. Also, those PRs with limited non-CPF savings who plan to retire outside Singapore could end up somewhat “over-invested” in CPF assets and thus incur some currency risk.
• In some rare cases CPF assets and payments might cause reductions in a PR’s entitled benefits from other countries.

• In Singapore, the Central Provident Fund (CPF) acts as the country’s pension scheme to assist all Singaporeans (including PRs) for their retirement.
• The save-as-you-earn element employed by the CPF ensures that both time (employees and employers start contributing as soon as a person begin working) and discipline (contributions to CPF are meant for retirement and a few other essential items such as housing and medical bills only) are incorporated.
• It is important for us not to forget that the primary purpose of CPF is to ensure that we have enough to cover our basic retirement needs.
• In other words, money that was meant for tomorrow is being used today.

MediShield Life:

• Singapore requires both citizens and PRs, no matter where they live, to pay MediShield Life premiums (taxes).
• MediShield Life provides a basic set of medical insurance benefits at public hospitals and public clinics in Singapore.
• The premiums are set annually and increase with age, and they are paid from CPF Medisave funds (if there are Medisave funds available; otherwise the premiums must be paid out of pocket).
• The premiums are not adjusted for income except for the very poorest, when they are subsidised or waived, so middle class PRs and citizens pay exactly the same MediShield Life taxes as the wealthiest PRs and citizens.
• Integrated Shield insurance policies are available to supplement MediShield Life, and since PRs already have mandatory MediShield Life they pay a lower premium for an Integrated Shield plan than foreigners do.
• Whether a particular PR gets value-for-money from MediShield Life is highly situational.

• Comparatively MediShield Life is not applicable for foreigners.
• Foreigners pay higher premiums for Integrated Shield plans than citizens and PRs.

Possible loss of “expatriate” employment compensation elements:

• If you arrived in Singapore with expatriate compensation provisions then your employer may terminate some or all of those elements once obtaining PR status.
• Such provisions might include annual home country trips for whole family, housing, children’s education, tax preparation, tax equalization, continuation of home country social insurance and/or retirement savings contributions, pension, seniority privileges, employee stock purchase discounts and stock options, per diems, relocation / repatriation / moving, household goods storage, provision of maid (domestic helper), nannies, transportation / private car, professional society memberships, disability insurance, life insurance, unemployment insurance and severance, global medical insurance, employee income tax, and  medical evacuation, as some examples.
• You might also lose an implied or even actual right to return to a home country position. On the other hand, you might be entitled to new employment benefits as a fully localized employee in Singapore.
• Highly compensated executives from developed economies on expat packages tend to suffer a net loss of compensation and benefits when becoming PR, while less highly compensated workers, including those from countries with few employment-related benefits, may find that fully localized employment in Singapore is a net positive.

• When you compare as a foreign Expatriate with your PR status in Singapore the net losses may not be seeming as huge.
• When you are a foreigner you are to be tied with only one same employer unless you switch your job / work pass.
• However, when you obtain your PR status, you are free:
• To hold multiple employments;
• To carry on any businesses in Singapore;
• To purchase the public properties;
• To avail the subsidies;
• Etc, etc.
• Refer to the above advantages to compare with the losses arising out of becoming a local resident (PR) from foreign expatriate.

• Corporate matters such as Companies, Businesses, etc
  

• The Accounting and Corporate Regulatory Authority (ACRA)

• CPF matters

• CPF Board

• Fair Employment Practices (FEP)

• Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP)

• Immigration matters & Student Passes

• Immigration Checkpoints Authority (ICA)

• Taxation and GST

• The Inland Revenue Authority of Singapore (IRAS)

• Skills Development Levy (SDL)

• SkillsFuture Singapore Agency

• Work Passes

• The Ministry Of Manpower (MOM)