Singapore Expats

I am an American thinking about becoming a PR so that i can buy landed real estate. Has anyone out there investigated the Pros and Cons? Need some advice on this one...

You ARE American? No kidding!

(sorry - I could not help)

Apply Wham, just do it, as some of your fellow Americans say.

Pro's? Well, you can buy property. And that's what you're looking for, right?

Con's? I am a PR here now for 2 over years and frankly, I haven't hsd any moment or occasion showing me it was not a good step to do so. I really can't think of any con's. I think you pay bit more tax, but I am not sure. But then again, when being PR, you can register as self employed and pay almost NO tax.... Yep, I did that...

So when is the housewarming party?

Eric

Tax rates are the same for EP holder, PR's or Citizens. Actually, depending on whether you had to renegotiate your contract, you actually make out better as a PR from the tax viewpoint. It was possible, employer willing, to pay CPF as an EP holder but your contribution was not tax deductible. As a PR your contributions are.

If you have your own company (SP NOT Pte Ltd) you don't have to pay CPF but you do have to pay into Medisave. Also tax deductible. There is other ways of avoiding the CPF altogether but I wouldn't do it as you may have problems later when trying to renew your re-entry permit. SE may be able to fill you in there. So you could say the forced medical/CPF savings has a two-fold benefit, It will draw higher interest (2.61 - 4%) than you could get in savings (won't go into higher risk investments - trying to keep apples and oranges separated here), and it gives you an additional tax deduction (something that is few and far between here - not like the Infernal Revenue Service's convoluted gray laws).

The only downside that I can see from an American POV is that there is no tax treaty between the US and Singapore. However, you still can take the income earned abroad exclusion for a portion of you earnings (if they qualify). I'm getting ready to do that next weekend. Both countries same weekend. Rather easy actually when you've done it for a living for 9 years in Washington DC.

The first two years of PR you will contribute to CPF at a much reduced rate, contributing 4% the first year (if you are an employee that is) and the employer contributing 5%. The 2nd year you would contribute 15% and the employer 9%, 3rd year on - full rates of 20%/13% provided it doesn't go back up to 20%/20% where is was when I became a PR.

Downside? None - full agreement with Eric.

sms

I realise that I have not looked into this, but you guys make it sound like this is something to consider. I have a couple of questions....

1. Does a whole family apply for PR, or can only one apply?
2. If my son(15 yr old) were to consider this, he would also be expected to do his National Service, correct?
3. Does applying for PR, mean anything as far as your passports, citizenship to other countries?

We've only been here almost 1 1/2 years, but these are things to look into slowly and not rush into them. Thanks!

No, your son doesnt need to go for National Service even he will be a PR.

Here is the word from the horse's mouth:

http://www.mindef.gov.sg/imindef/resour ... peech.html

I've copied and pasted it as well as the link is sometimes slow:

Permanent Residents' liability for National Service

Mr Tan Soo Khoon asked about Permanent Residents and their liability for National Service. Perhaps, I should take this opportunity to expand on this subject a little. Permanent Residents are liable to serve National Service under the Enlistment Act. First generation Permanent Residents who are able to contribute to Singapore economically immediately upon the grant of PR status are administratively exempted from National Service. Second generation PRs, who are sponsored by their parents for PRs and those granted PRs at a young age based on their potential to contribute to Singapore in the future, are required to serve National Service. If NS-liable PRs fail to register or enlist for National Service, they would also be treated as NS defaulters. However, PRs have the option of renouncing their PR status. We cannot stop them from doing so since they are PRs and not Singapore citizens. Upon renunciation of their PR, they would no longer be liable for National Service.

Mr Chew Heng Ching asked about MINDEF's policy towards PRs who have renounced their PR status without serving NS and subsequently, changing their mind and wanting to study and work in Singapore and are prepared to serve their National Service. He argued that some of these PRs may be talents who would be able to serve to contribute to Singapore.

Sir, PRs, who are liable for National Service, are like Singaporeans in many ways. Many of them studied alongside their Singaporean counterparts in our schools and they benefited from living in Singapore like Singaporeans. So, like Singaporeans, they are expected to play their part in defending Singapore and the fundamental NS principles of universality and equity would apply to them. After all, they have benefited from the security provided by the many batches of NSmen who served diligently before them. Unlike Singaporeans, such PRs can renounce their PR status without serving NS. This is fair for those PRs who have decided that they do not want to make Singapore their home.

But what about those who subsequently want to return? Would it be fair to allow them to do so unconditionally? After all, their initial action of renouncing their PR status to avoid serving National Service calls into question their commitment to Singapore. It would also not be fair to Singaporeans who have to serve their National Service. This is why we currently take into account, together with other factors, the fact that such ex-PRs have failed to serve National Service when they subsequently applied for a student pass or Work Pass to study or work in Singapore. And there is no automaticity for them to be able to be restored. Such ex-PRs who refuse to do NS should be considered in that light.

Should we be more welcoming of ex-PRs if they offer to serve NS again? As ex-PRs, they are no longer liable for National Service. That is a technical legal issue. And, in fact, they cannot be drafted for National Service. By renouncing their PR in order to pursue their personal goals and then later offering to return to serve National Service, they are, in effect, trying to choose when to serve their National Service. This is an option which is not open to Singaporeans. A Singaporean cannot say, "I suspend my Singapore citizenship. I go abroad to study and then I come back and reclaim my Singapore citizenship." He cannot choose when to do NS. He has to do NS when the nation calls. So we have to look at PRs in that light.

We recognise that some PRs may decide not to do NS and renounce their PR. But each year, a substantial number of PRs answer the call and do serve NS. If we freely allow the return of those who have chosen not to do NS, we would also be unfair to those PRs who have answered the call of duty when they were asked to do so.

Hope this help Matney

Wow!

when reading this kind of stuff i always wonder who's this incredible dangerous enemy singapore needs to be defended against....

anyway, i've heard that if you're a PR but your son is born outside singapore he isn't liable for NS. can anyone confirm or deny this?

ale wrote:when reading this kind of stuff i always wonder who's this incredible dangerous enemy singapore needs to be defended against....

anyway, i've heard that if you're a PR but your son is born outside singapore he isn't liable for NS. can anyone confirm or deny this?

It would depend on whether or not you applied for PR for him under your PRship.

The problem that arises it if you get him/her PR then they are liable for NS unless renounced (but as you can see, that may well be going to change). That or they may not be able to get PR, EP, etc. although how they could track it would be a mystery to me. The other alternative is to keep him/her here on a dependent pass or student pass. This is fine unless you have planned to stay here for the longer term. Once the child's schooling is finished then they can only stay on an LTSVP or dependent pass until reaching the age of majority or the government refuses to renew it. This could put the family is a rather precarious position at some point in the future if they hadn't planned on returning to their home countries yet.

In my case it's a bit different and my son has dual citizenship (US & Singapore). I could have gotten him out of Singapore several years ago but did not due to personal reasons which I'll not go into here (search the archives). This way my son, while having to give something back to the country that birthed him, schooled him, and kept him healthy, has the choice of whether or not to make his home the US or Singapore.

Yes, it is two years of his life (for singaporean readers), and yes, I made that choice for him. War? Been there and done that! 'Nough said on that.

sms

It seems there is no downside to becoming a PR - tax rates the same (or in Eric's case zero), no NS for 1st generation PR's and the best thing would be:
Not having to find something in 2 weeks if you lose your job and get asked to leave.

Any disadvantages?

The only downside i have heard is the required company contribution to the CPF. As i have reasonably generous matching funds type company contribution to a 401K plan that resides in the US, I would have to conver this myself. This would mean contributing to a 401K in the US, convering my CPF contribution here, AND also covering the portion that my company would otherwise have to make here. I am not averse to saving - but under this scenerio, i would end up with a large chunk of income being locked away. Am i correct in this thinking?

There's only room for one Oil man in this town....

..kidding WHAM, go for it par'dner yeehaw!

Wham wrote:The only downside i have heard is the required company contribution to the CPF. As i have reasonably generous matching funds type company contribution to a 401K plan that resides in the US, I would have to conver this myself. This would mean contributing to a 401K in the US, convering my CPF contribution here, AND also covering the portion that my company would otherwise have to make here. I am not averse to saving - but under this scenerio, i would end up with a large chunk of income being locked away. Am i correct in this thinking?

If you & your company are locked into a 401K and they are willing to continue your employment as a PR AND continue to match your 401K, then yes, you would end up with a damn large chunk of funds being locked away if they won't contribute their share of the CPF. But, always remember that when you give up your PR all your funds here are unlocked including the Medisave contributions. Also, all CPF withdrawals are tax free here.

As an aside, however, if you give up your PR and subsequently return to singapore sometime in the future to work and renew your PR you would have to redeposit all the withdrawn CPF funds as well as the interest that would have accrued during the interim since you withdrew it.

If you have to cover your CPF yourself, at the beginning of the 3rd year you would be having to sock away 33% of your salary just to cover your CPF Contributions (add income tax and 401K on top of that).

sms

I'm also at the early stages of considering applying for PR and intention is to continue being based here for the remainder of my working life. Likely I will be making employer's contribution to CPF as well as there is no provision for that in my contract. There is a reasonable chance my current employer will post me overseas for part of that period. What happens re CPF while there are no earnings in Singapore? Are contributions suspended for that time?