Friday, October 19, 2007

Tax Breaks, Schools Attract S.Koreans to Singapore

Tax Breaks, Schools Attract S.Koreans to Singapore

An increasing number of high-income South Koreans are obtaining permanent residency in Singapore to give their children better educational opportunities, take advantage of tax breaks and enjoy post-retirement living. In the past, Koreans who wanted to move overseas looked mostly to the U.S., Canada and Australia, but now it's Singapore in the spotlight.
According to the Bank of Korea, not a single South Korean bought a house in Singapore in 2005, but in 2006 eight did and in the first half of 2007 23 Koreans bought houses in the Southeast Asian city-state, showing a sharp upward trend.

Investment by South Koreans in Singapore has also grown, from S$3.3 million (S$1=US$0.68) last year to S$14.30 million during the first half of this year. The number of Koreans residing in Singapore has swollen to about 13,000, nearly twice as many as three years ago.

Orchard Road in the center of Singapore is the city's main shopping district with an upscale residential area nearby. Singapore is gaining popularity among South Koreans looking to give their children better educational opportunities, enjoy tax benefits and make investments in real estate. /Courtesy of the Singapore Tourist Promotion Board

To obtain permanent residency in Singapore you can establish a business with an investment of more than S$1 million, or invest more than S$1.5 million in a local venture capital firm, enterprise or foundation. If you invest more than S$2 million, you will be permitted to buy residential property with up to 50 percent of your investment.

The main reason Koreans are interested in Singapore is that it offers better educational opportunities and tax benefits. It's also possible to make successful investments in real estate, since housing prices have risen in the wake of recent development plans for the Sentosa and Marina Bay areas of the country. As Singapore is relatively close to South Korea, it's also easy to travel between the two countries.

Individual South Koreans are looking for foreign countries where they can enjoy tax advantages and educational opportunities, just as businesses are leaving for foreign nations in search of lighter tax burdens and softer investment regulations.

Koreans can still maintain their South Korean citizenship if they obtain only permanent residency in Singapore. Singapore also offers public security, a stable political and economic situation, less racial discrimination than in Europe or the U.S., and a better educational environment where students can learn both English and Chinese.

The immigration trend is further encouraged by the Singaporean government's plan to expand the number of permanent residents it allows in a bid to increase its total population from 4.5 million now to 6.5 million by 2050.

Kim Hoon, 38, is a Korean who obtained permanent residency in Singapore in 2005. "The Singaporean government gives permanent residency to any foreigners who contribute even a little to the Singaporean economy," he said. "Permanent residency is renewed every five years, but you'll have no problem maintaining your status if you have no problems with your work and you pay your taxes."

A growing number of South Koreans are establishing their own businesses or making investments in Singapore to take advantage of tax breaks. One South Korean plastic surgeon plans to establish a joint venture clinic in Singapore next year. "To succeed in Asia, you should advance into Singapore, a medical hub," he said. "And you can win recognition there for the outstanding technology of South Korean surgeons."

The president of a local consulting firm said, "Many South Koreans obtain permanent residency by first establishing corporate bodies in Singapore and then gauge the situation for about a year and a half."

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