Scheme for rich foreigners 'outlived usefulness'
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SINGAPORE: The move to scrap one avenue for rich foreigners to fast-track their permanent residency applications by parking large sums of money here will have little impact on the Republic's economy, analysts noted.
In fact, an analyst went as far as to describe the Financial Investor Scheme (FIS) - started in 2004 - as having "outlived its usefulness".
Under the FIS, high net worth individuals from overseas with net personal assets of S$20 million - and at least S$10 million of assets held in Singapore for five years - can, via the Monetary Authority of Singapore (MAS), expedite their PR application through private banks or other financial institutions.
Up to S$2 million of the S$10 million these foreigners park here can be used to buy private residential property.
"The scheme has outlived its usefulness and its scrapping will have no impact on the economy as Singapore can now stand on its own merit and it won't hurt Singapore's attractiveness to foreigners," Chesterton Suntec international head of consultancy & research Colin Tan told Today.
On Wednesday, the Business Times reported that the FIS will be scrapped by the end of this month.
On why the FIS was being scrapped, the MAS explained that the scheme and the Global Investor Programme (GIP) - which is run by the Economic Development Board - have become similar and it would be more efficient to have just one investor scheme for PRs.
The MAS reiterated that Singapore continued to welcome quality individuals who are keen to contribute to the Republic economically and private banks can continue to direct their clients to the GIP facility.
The GIP is targeted at entrepreneurs with a track record and who can boost employment here.
Under the GIP, foreigners have to invest S$2.5 million in a new company or to expand an existing business in Singapore and the company should have an annual revenue of at least S$30 million.
Citi economist Kit Wei Zheng felt the government's rationale to scrap the FIS was to "ensure that (foreigners) who have obtained their PR via these schemes are able to contribute productively to the real economy via job creation, and not merely through financial investments that drive up asset prices".
Barclays Capital economist Leong Waiho added: "Even among wealthy PR applicants, we favour long-term strategic investors who are prepared to sink roots in Singapore and who can create economic value (create jobs for Singaporeans).
"This sets them apart from the more opportunistic crowd, who park money here to take punts in our asset markets, and who expect to gain PRs along the way."
Mr Kit noted that it was impossible to "come up with precise numbers about just how much investments or PRs into Singapore was due directly to the FIS" - given that the figures are not made public. But he pointed out that since the inception of the FIS, the share of PRs in property sales has risen from 10.7 per cent in 2004 to 13.5 per cent as of last year. "Obviously not all new PR buyers came under the FIS, but it would be reasonable to assume it had some impact," he said.
Separately, real estate consultancy CBRE said on Wednesday in a report that despite lower sales volume in the first three months of this year, regional private investors are expected to remain active in the property market here.
According to CBRE, the total investment sales hit S$4 billion in the first quarter, down 53 per cent on-year and 49 per cent on-quarter.
It attributed the slower private investment sales to the weak global capital market sentiment and the introduction of cooling measures such as the Additional Buyer's Stamp Duty.
Nevertheless, it noted that mass market projects remained popular, prompting developers - especially from China and Malaysia - to place more aggressive bids for land tenders.-- TODAY
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whalao - this type of money don;t wanna earn they rather fleece from us the poor people. earning so little can stil get tex whakao - some kinnda brains they have -scared of foreigners and the rich until like that
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Too many rich people on the island?