Singapore is overhauling visa rules to attract foreign workers and ease a tight labor market that's contributing to wage and price pressures.
The new rules will allow foreigners earning a minimum $21,431 per month to secure a five-year work pass, with a provision to allow their dependents to seek employment, according to the Ministry of Manpower. Exceptional candidates in sports, arts, science and academia who don't meet the salary criteria are also eligible for the long-term visa under the Overseas Networks and Expertise (ONE) pass that will take effect Jan. 1.
"Both businesses and talent are searching for safe and stable places to invest, live and work in. Singapore is such a place," Manpower Minister Tan See Leng told reporters on last month. "It is therefore timely to leverage on this opportunity to cement Singapore's position as a global hub for talent."
The announcement is the latest in a string of decisions this year that are meant to address a still-tight labor market, as well as attract international business to drive the city-state's ambitions as a global financial hub, after a pandemic-era slump in white-collar workers from abroad. Many parts of the economy have seen pay increases this year to lure talent, stoking fears that wage-cost escalation will add to headline inflation that's touched a 14-year high and force the central bank to tighten monetary policy further.
Effective Sept. 1 next year, Singapore plans to exempt jobs, comparable to those held by top 10% of Employment Pass holders, from the need to be advertised locally before hiring foreigners under a system called Fair Consideration Framework. The duration of FCF advertisements, where applicable, will be halved to 14 days, the ministry said.
"This is a much-needed progressive step that fills the gap," said Amit Gupta, president of TiE Singapore, the Singapore chapter of the Silicon Valley-founded global nonprofit organization that aims to build entrepreneur ecosystem. "It feels like Singapore is really addressing the gap at the top end of talent, not just in terms of salary, but capabilities. Talent, globally, is quite mobile, and there's a number of competitive hubs that are trying to get access to that global talent."
The rule change will help the city-state better compete with rival business hubs such as Hong Kong and the United Arab Emirates and catch up to Australia and the United Kingdom, which have similar global talent visas. More than 700 finance professionals moved to Singapore from Hong Kong last year, according to recruitment firm Robert Walters.
The UAE this year made it easier for expatriates to work without being sponsored by an employer and switched to a Saturday-Sunday weekend to align the country with global markets as it seeks to win more businesses, with Dubai positioning itself as a cryptocurrency hub.
Singapore has had to grapple with especially challenging labor market issues as the nation lives with the coronavirus and the need to recharge sectors such as hospitality and food and beverage that suffered disproportionately amid social mobility restrictions that are finally all but canceled.
The new rules are "targeted at the very high-end foreign-talent segment," said Selena Ling, head of treasury research and strategy at Oversea-Chinese Banking Corp. "It will not be in significantly large numbers that will move the needle for all industries, just for the very specific high-growth industries."
"This is an age where talent makes all the difference to a nation's success," Prime Minister Lee Hsien Loong said in his Aug. 21 National Day Rally speech. "We need to focus on attracting and retaining top talent, in the same way we focus on attracting and retaining investments."