Singapore has always been one of the more popular countries among expats, but did you know that the island city-state boasts the highest paid expats in the world? According to a recent article by HSBC, relocating to Singapore pays off lucratively for expats in terms of disposable income and savings. But that is only a few of the many reasons why expats who move to Singapore are the highest paid in the world—and Team Expat has collated and broke down the facts for you below:
Fact #1: Low cost of living and working in Singapore
Contrary to popular belief, the cost of living and working in Singapore can be kept to a minimum, if one knows how. For example, instead of owning a car, why not use public transport? Not only is the country’s public transportation network extremely accessible—you can go almost anywhere by bus or MRT (Mass Rapid Transit) alone—it’s also really cheap. If you need to go somewhere that’s not accessible by bus or train, the option for cabs is open to you, and they are still more affordable than the cost of maintaining a car.
The Strait Times reported that living and working costs in cities with more space has decreased, and Singapore recorded the biggest decline at 16.6 per cent. Although this can be seen as a decline in local economic conditions or demand for property, cheaper rents could also prove to be a global competitive advantage—low rents coupled with high quality of living could entice expats to move to the country. Ultimately, the low cost of living and working in Singapore makes it easier for expats to save more of their income, making them the highest paid in the world, based on the amount of disposable income leftover after taxes, household and necessary expenditures.
Fact #2: Singapore’s financial markets are flourishing
According to The Strait Times, more and more millionaires are choosing to relocate to Singapore over Hong Kong due to the Umbrella Movement—a pro-democracy demonstration that began on 28 September 2014 as a form of grass-roots objection to the decision of the Standing Committee of the National People’s Congress (NPCSC) of 31 August 2014. Although it seems that activists have abandoned their fight, leaders of the pro-democracy movement explained that the struggle is not over, and that they are merely laying low until further developments in Beijing. As a result, wealthy expats from Hong Kong prefer to relocate to Singapore, which raises the average of 1 in 35 Singaporeans by 17 per cent, according to WealthInsight.
Additionally, Singapore is known for its superior quality of life and flourishing financial markets, which factors into migratory expats’ decision-making. An increase in the number of wealthy expats in the country leads to higher amounts of spending, which in turn helps to stimulate the economy more, if Keynesian economics are to be believed. Further reports from WealthInsight also show that the country’s wealthiest have the lowest average wealth in Asia (USD 5.2 million per individual)—a lower average means that the wealth is distributed evenly among the country’s population.
Fact #3: There is greater demand for start-ups, which leads to demand for more talent
According to Deal Street Asia, the environment in Singapore is conducive towards start-ups, which leads them to relocate their headquarters to the island city-state and outsource their manpower to their home country instead. This is because Singapore has a more developed eco-system of start-up funding, such as lower corporate taxes, a simpler tax code, less compliance norms, and higher ease of doing business. For example, in India, inflow and outflow of fund are strictly monitored; shorter holding period for shares to qualify for capital gains; less need for professional advice at every step; easier investment schemes.
Aside from the financial benefits that start-ups can gain from relocating to Singapore, there is a huge demand for start-ups and small-medium enterprises (SMEs) there, due to the high value placed on innovation. According to HR in Asia, the government is looking to turn Singapore into Southeast Asia’s answer to Silicon Valley, and has started “initiatives such as the Early Stage Venture Fund programme which has pumped $150 million into technology start-ups since 2008.” The increasing demand for start-ups has led to a parallel increase in job opportunities and professionals in select fields can expect a pay rise as employers sought to retain or engage talents.
Fact #4: Expats working in Singapore are paid more for their skills
With Singapore’s burgeoning financial markets, it’s only expected that expats working in Singapore will see higher pay. According to the 8th edition of the Expat Explorer survey released on 21 December 2015 quoted by The Strait Times here, 65 per cent of expats in Singapore report greater levels of disposable income (compared to a global average of 57 per cent), and 20 per cent say they have been able to buy additional property as a result of moving (global average is 17 per cent).
Unlike most countries, Singapore places an exceptionally high value on skilled workers. With no economic advantage in terms of natural resources, they recognise that these individuals can help to offset skill shortages locally and gain the country a competitive advantage globally. For example, with a majority of the talent in Singapore, foreign countries will have to outsource their work to Singapore and vice versa (Singapore doesn’t have to outsource their work). According to Asia Sentinel; employment in Singapore is almost at capacity, with only 2 per cent unemployment.
Expats in Singapore are also encouraged to learn new skills as part of an ongoing progress to improve their standard of living while they are gainfully employed, making for rewarding job opportunities—and as they are able to do more, they stand a higher chance of being promoted, which leads to higher pay.
Have been living in Singapore but not feeling the lure yet? If you require any financial or relocation advice, feel free to consult our resident experts here or leave a comment below!
Cover image by Cadogantate