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EI Article Series

7 Singapore PR Disadvantages

7 Singapore PR Disadvantages

In general it is believed that Singapore PR status is always beneficial. However there are few disadvantages of the PR status as given here.

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What are the Disadvantages or limitations of getting Singapore PR (Permanent Residency)?

The Singapore PR status is undoubtedly one of the most prestigious opportunities. However, there are both pros and cons to becoming a PR holder here. Usually, on the internet and various forums, people will rarely discuss the disadvantages of obtaining Singapore PR status. So in this short article, we explain to you seven such disadvantages. You should consider these factors carefully before applying for PR.

These disadvantages are actually of two types ;

The disadvantage of obtaining PR: Reasons why you may not want to apply for PR

Limitations of PR: Factors because of which you should eventually apply for Citizenship

7 Singapore PR Disadvantages

Singapore PR Disadvantages 1: National Service Liability

The term "Second-generation PR" refers to children or teens who obtained permanent residency through the sponsorship of their parents and apply for status through this scheme. To qualify for this status, the child must not be married and must be under the age of 21 when making the application.

For all male second generation PR holders, it is the law that they are required to serve a period of national service. Upon reaching the age of 18, they will be scheduled for enlistment as National Servicemen Full-Time (NSFs).

This national service involves 3 to 5 months of basic military training in Pulau Tekong Military camp. Following this, the National Serviceman has to work in a government department for 21 months.

People's views towards this military service can differ widely. Some are very receptive to it, while some are absolutely against it. So whatever your view is, if you have a male child, do consider this point carefully.

Singapore PR Disadvantages 1: National Service Liability

Singapore PR Disadvantages 2: Your take-home pay may reduce

There are very few deductions from your salary when working on an employment pass. Other than the ethnic fund contribution, nothing comes to my mind. Typically these ethnic fund contributions like Sinda come to be around 10-25 SGD per month. As a result, you will get almost everything of your salary in your bank account.

Once you get a PR status, you will be subjected to CPF contribution. As a result, a specific component will be deducted from your salary and deposited into your CPF account. Of course, there are staggered rates for employee contribution for the first three years. Still, this overall means that your payment in hand is going to reduce.

Sometimes employers are also unhappy with this extra contribution they have to make (As now employer contribution also comes into the picture). So some try to adjust your salary so that the total cost to the company (after CPF) is the same as your pay while on employment pass. This can have a significant reduction on your take-home salary.

For the calculations, please see the attached table.

Singapore PR Disadvantages 2: Your take-home  pay may reduce

Singapore PR Disadvantages 3: Some people are not happy with CPF returns

On the amount in your CPF account, the CPF board will give interest ranging from 2.5% PA to 4% PA. However, some people feel this is a too low return. They may not be happy with this. Especially the people from the younger generation who are savvy and feel they can get much better returns by investing in derivatives, cryptocurrencies, etc.

Singapore PR Disadvantages 3: Some people are not happy with CPF returns

Singapore PR Disadvantages 4: CPF money is locked

The amount in your CPF account is locked and can be used only for specific purposes. You are not free to use it for whatever purpose you like. Some people do not like this idea.

Singapore PR Disadvantages 4: CPF money is locked

Singapore PR Disadvantages 5: If buying HDB – Must not hold property overseas

If, after obtaining PR, you plan to buy a resale HDB in the market, then you must sell/transfer all the properties in your name anywhere in the world. This includes your ancestral properties in your home countries also.

Depending on your specific case, this may be difficult for you. Also, transferring properties in some relatives' names is not recommended. After all, the value of the property at stake is high.

However, you can solve this problem by considering buying a condo instead of HDB.

Singapore PR Disadvantages 5: If buying HDB – Must not hold property overseas

Limitations of Singapore PR 1: PR itself is not permanent

Even if there is the word "Permanent" in PR, the status of PR itself is not permanent. Singapore PR is a long-term visa that adds flexibility to jobs and career opportunities.

When you get PR, you also get five years re-entry permit. You are expected to be economically active in these five years to be able to renew your re-entry permit.

Now, if it so happens that your company posts you for a job in another country on a job assignment, then you may lose your PR status in Singapore as you are no more economically active in Singapore.

Also, it is not clear what happens when you eventually retire and still want to continue staying in Singapore.

Limitations of Singapore PR 1: PR itself is not permanent

Limitations of Singapore PR 2: PR may get canceled in case of legal prosecution

Depending on the severity, you may impact your PR status if you are involved in any crime, even a small one or even an accidental one. For example, if you accidentally injure somebody and it was established that it was due to your mistake, then on completion of the case, authorities may cancel your PR.

Also, if you attract negative social media publicity by writing something obnoxious, you may face nonrenewal of your Rentry permit.

Limitations of Singapore PR 2: PR may get canceled in case of legal prosecution

Singapore PR Disadvantages: Conclusion

Just like the benefits, some disadvantages are obviously associated with the Singapore PR status. For some, these factors are quite ok, whereas, for some, they may not be ready for this. So do consider the above drawbacks of PR before finally deciding to apply for Singapore PR.

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