22 November 2011

Private Property Investment as a Route to Permanent Residence

An entrepreneur who invested in a business in Singapore could include an investment in an owner-occupied property as part of his application for permanent residence for himself and his family prior to 1 January 2011.

Investing in property was removed from the eligibility criteria with effect from 1 January 2011 and is no longer a consideration in the evaluation of applicants for permanent residence.

Economic Development Board ("EDB") said this in a letter to The Business Times on 22 November 2011 to correct a statement by Mr Ngiam Tong Dow in his article "Climbing the Global Economic Ladder".

Mr Ngiam is a former chairman of EDB.

It is puzzling why EDB allowed an investment in an owner-occupied property to satisfy, even partially, the criteria for permanent residence, and stopped the practice only this year.

It might arguably have been quite reasonable several decades ago when Singapore was in dire need of capital, although it would certainly have been much better had the permanent resident entrepreneurs invested in manufacturing or services, instead of real estate.  After all, they were entrepreneurs.  And they wanted to be granted permanent residence.

Furthermore, many of the new permanent residents would probably have needed to purchase a property for themselves and their families to live in anyway.

Especially in the past 20 years or more, not only did Singapore not need foreign capital to be invested in private property, but also it is incomprehensible why such non-productive property investment should be allowed to partially satisfy permanent residence criteria.

EDB finally stopped this practice on 1 January 2011.

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