Migrating to Singapore - What is all this PR stuff, anyhow?

PR, the abbreviation for Permanent Residence, is one of the most common topic for Singapore immigrants and immigrants-to-be to think and talk about. At a glance, PR is sort of a special Visa that would allow an immigrant to stay in Singapore for a relatively long period of time, 5 years for example.

However, having PR benefits you in other aspects as well. Below is the may-not-complete list of benefits PR brings.

• Housing: Married PR-holding couple is eligible to buy HDB* resale flat. This is a decent benefit considering rental for a 2-bedroom HDB flat is around S$ 2000 and installment for 20-year mortgage for the same is just about S$ 1000. So, if you plan to stay in Singapore for long, you should really consider taking up PR.
• CPF** contribution: When a you gets PR status, it’s required that you will contribute 20% of your income to a CPF account. Your employer will also contribute an amount that equals to 15% of your income to the account. The account is yours. However, spending from the account is subjected to CPF regulations. Therefore, acquiring PR increases your total income by 15%, but you’ll have 20% less cash.
• Employment: Singapore government mandates employers to prioritize Singapore citizens over PR-holders,  and PR-holders over non-PR immigrants when it comes to hiring decision.
• Taxation: Your CPF contribution is tax free. As the result, your income tax is lower if you have PR status. I created a Singapore tax calculator below, just in case you want to see actual number.

The benefits of PR sound great, right? However, there are downsides as well. I hope you saw this coming. So the downsides are as follows.

• Cash: You have less 20% of cash income as the portion goes to CPF account, and you can’t spend fund in that account freely. You can only cash out all your CPF fund after you drop your PR status.
• Housing: If you have housing allowance from your employment, it’s likely to come to an end once you have PR status.
• Military service is applicable for 2nd-generation PR-holder. So if you’re PR and subsequently, your son takes it up as well, then your son will have to serve Singapore military service.

This is just a very quick rundown. Feel free to let me know if I left out significant things about PR.

Appendix
* HDB stands for Housing Development Board, a government authority whose main objective is develop and provide housing solution for the public. 85% of Singapore population lives in HDB-developed flats.
** CPF stands for Central Provident Fund, a sort of pension fund managing authority in Singapore.