Study Abroad in Singapore: Relaxed PR Rules and Opportunities for International Students

TL;DR

Discover how recent changes to Singapore’s immigration and employment policies impact international students and foreign professionals. This blog explores the evolving rules for study abroad in Singapore, including updated pathways to permanent residency in Singapore for Student Pass holders. Learn how new regulations, such as higher salary thresholds and stricter employment pass requirements, affect foreign workers in sectors like finance and technology. Find out how the COMPASS points-based system and reduced foreign worker quotas shape the job market, and what these changes mean for Indian students with CBSE or ICSE qualifications. As Singapore prepares for its 2025 elections, understand the balance between local job protection and the demand for foreign talent in one of Asia’s top financial hubs. Whether you’re a student or a professional, this guide provides essential insights to navigate education and career opportunities in Singapore.

What is Singapore Trying to Achieve?

Singapore is simultaneously making it easier for international students to apply for Permanent Residency (PR) while raising salary thresholds for foreign workers, effectively limiting the number of foreigners in the workforce. This dual strategy prompts the question: What is Singapore aiming to accomplish, and why now?

Eased PR Rules for International Students

As of July 31, 2024, Singapore has simplified the process for international students to apply for PR. Student Pass holders can now apply for PR if they have passed at least one national exam or are enrolled in the Integrated Programme. Previously, students had to study in Singapore for at least two years to be eligible.

National Exams for PR Eligibility

The national exams accepted for PR eligibility include:

• Primary School Leaving Examination (PSLE)
• General Certificate of Education (GCE) N/O/A level exams
• Integrated Programme leading to GCE A-Level, International Baccalaureate Diploma, or NUS High School Diploma

Uncertainty for Indian Students

The Singapore Universities give preference to some boards like CBSE and ICSE as compared to the state boards. For Indian students studying in Singapore, a good CBSE or ICSE certificate is often necessary for university admission, but it doesn’t open up the opportunity of faster PR process. Based on current reports, it seems that Indian students must still wait until they’ve spent two years on campus before applying for PR.

Long-Term Visit Pass Expansion for Guardians

A significant change in the new rules is the extension of Long-Term Visit Passes (LTVP) to fathers and grandfathers of students, a benefit previously limited to mothers and grandmothers. However, only one guardian is allowed the LTVP at a time. This expansion aims to support school-age children, but it remains uncertain how easily LTVPs will be granted to university students’ parents.

Stricter Employment Pass (EP) Requirements

Starting January 1, 2025, Singapore will increase the salary threshold for foreign workers applying for an Employment Pass (EP). Foreign professionals must now earn at least SGD 5,600 per month, a rise from the current SGD 5,000. Workers in financial services face an even higher minimum of SGD 6,200 per month. The change applies to both new applicants and renewals, with the salary threshold increasing with age.

Impact on Foreign Worker Quota

In addition to higher salary requirements, the Dependency Ratio Ceiling (DRC) will be reduced from 77.8% to 75%. The DRC is the maximum permissible ratio of foreign workers to the total workforce for a company in a given sector. This means that companies can employ fewer foreign workers relative to local employees, limiting the number of jobs available for foreigners. The change means that companies in a given sector can hire a maximum of three work permit holders for each local employee, down from the 3.5 currently sanctioned.

In short, there will be fewer jobs for foreigners and the foreigners who are hired will be at the top end of the wage scale. 

Employment Pass Evaluation via COMPASS System

Singapore’s points-based COMPASS system continues to evaluate EP applicants on four criteria:

• Salary level
• Qualifications
• Firm’s workforce diversity
• Support for local employment

Applicants can earn bonus points for jobs on the Shortage Occupation List or if their employer partners with the government on innovation and international projects. To secure an EP, applicants must accumulate 40 points.

Political Context: Why the Policy Shift Now?

These changes coincide with Singapore’s upcoming general election in 2025. With Prime Minister Lawrence Wong recently taking office after Lee Hsien Loong’s 20-year tenure, his government is under pressure to address the ‘Jobs for Singaporeans’ issue.

According to a 2021 survey by the Institute of Policy Studies, over 50% of respondents believe immigrants take jobs from locals, strain public infrastructure, and heighten competition for employment.

The People’s Action Party (PAP) Response

The ruling People’s Action Party (PAP) has historically dominated Singapore’s political scene. However, in the 2020 election, the PAP secured its lowest number of parliamentary seats since its inception, partially due to dissatisfaction over perceived preferential treatment for foreign workers. As a response, the government has since tightened immigration rules, raised minimum salary requirements, and implemented a points-based visa system.

Singaporeans are unlikely to oust Wong and the PAP, but the voters definitely have expectations. The ‘Jobs for Singaporeans’ issue has been steadily intensifying over the past 15 years. According to a 2021 survey by the Institute of Policy Studies, slightly more than half the respondents believed that immigrants take jobs away from locals, that competition for employment has increased and that immigrants increase pressure on public infrastructure. Placating nativists at home while ensuring the country remains open to foreign talent will be one of Wong’s greatest challenges. 

The Role of Foreign Talent in Singapore’s Financial Dominance

Despite the political pressure, Singapore remains heavily reliant on foreign talent, particularly in the financial services industry. In 2020, foreign workers made up about 33% of Singapore’s workforce, with many occupying low-wage jobs. However, public frustration tends to focus on highly paid foreign professionals, who are seen as taking the most coveted positions.

Singapore’s Status as a Financial Hub

Singapore continues to dominate Asia’s financial market, especially as companies from Hong Kong and Shanghai relocate to the city-state.  Many of Singapore’s financiers are ludicrously rich. Knight Frank, a Singapore real estate firm, predicted in 2022 that the number of ultra-high-net-worth individuals residing in Singapore would increase by two-thirds by 2026. This is largely due to Singapore’s business-friendly policies, which make it an attractive hub for financial professionals and companies alike.

Challenges of Balancing Growth and Local Interests

While the government is attempting to placate local concerns by tightening regulations on foreign workers, it must also ensure that Singapore remains an attractive destination for global talent. Prime Minister Wong has introduced more progressive taxation aimed at the wealthiest individuals, particularly those in financial services. Higher taxes on the rich will make Singapore less attractive to well-paid workers, particularly those in financial services. Still, for the big corporations, headquartering in stable Singapore will remain a better option than shifting back to the less predictable Chinese cities of Hong Kong and Shanghai. 

Demographic Struggles and Economic Growth

Singapore’s consistently low birth rate is another major challenge. In 2023, the nation’s total fertility rate (TFR) dropped below 1 for the first time in history. A TFR of 0.97 places Singapore among those countries with the lowest birth rates globally, with South Korea topping the list with a TFR of 0.72 in 2023. Despite various government incentives, Singapore has been unable to reverse this trend.

Immigration as an Economic Solution

In 2023, Singapore granted about 23,500 new citizenships and saw 34,500 individuals become permanent residents. Government officials have acknowledged that even with continued immigration, Singapore lacks enough local workers to sustain long-term economic growth. A diverse foreign workforce remains essential to supplement the local labor pool.

Speaking in the Singapore parliament earlier this year, Second Minister for National Development Indranee Rajah, stated that “Even with immigrants, we do not have enough working locals to support continued good economic growth. We must therefore remain open to a diverse foreign workforce that complements the local workforce.” 

Conclusion: Navigating Singapore’s Evolving Landscape

Since Singapore separated from Malaysia in 1965, to become a sovereign state, the country has enjoyed the stability of a “managed democracy” and its rulers have justified their long hold on power by giving the country rapid growth and development.

For Indian students and foreign professionals, Singapore remains a land of opportunity but with new challenges. As a financial hub, Singapore offers promising career paths in sectors like finance and technology. However, recent immigration policy changes reflect increasing pressure to prioritize local jobs, especially with the 2025 elections on the horizon.

While PR rules for international students have eased, uncertainties remain around recognizing foreign qualifications like CBSE and ICSE. Students must also complete two years of study before applying for PR, adding a layer of complexity.

On the employment side, higher salary thresholds and tighter quotas for foreign workers limit opportunities for mid-level professionals. However, skilled workers in high-demand sectors may still find favorable conditions. Singapore’s growth rate has been very rapid over the past 30 years.  It has done so well so fast that it must now anticipate a slower rate of development.  The only way Singapore can continue to rack up a rapid growth rate is if it can expand into the next phase of growth. When Indians think of studying in Singapore and finding careers there, they should be visualizing themselves as contributors to that “Next”.