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Moving to Singapore: The Essential Guide

Moving to Singapore: The Essential Guide

Key Facts about Singapore

• Singapore is the 4th largest forex trading centre in the world • The Singaporean Dollar (SGD) is the 12th most traded currency in the world • A global financial centre, Singapore is home to more than 100 commercial banks, 500 capital services and markets and nearly 400 fund managers. • Singapore is one of only 11 countries to hold a AAA sovereign credit rating from Standard and Poor’s • Singapore’s tax regime: 0% on income generated outside of Singapore, 0-22% personal income, 17% headline corporate income.

Australians moving to Singapore: What to know

Singapore continues to be an attractive destination for Australians looking to settle overseas. A modern standard of living combined with some of the lowest rates of taxation in the world makes it both a comfortable place to raise a family and the ideal venue for wealth creation. Whether you’re looking to build a company or a home abroad, Singapore is a strong contender.


For Australians looking to live and work in Singapore for an extended period of time, there are four immigration visa schemes that you should consider:

• Employment Pass – intended for company owners and skilled employees. Issued for a period of one to two years at the discretion of authorities and renewable as long as the holder remains employed with the same company. Monthly salary must total more than SG$3,600. May apply for permanent residence “in due course”.

• Entrepreneur Pass (EntrePass) – issued to owners of newly incorporated or soon-to-be-incorporated companies. Initially issued for one year and renewable thereafter as long as the business remains financially viable. The business must either be about to be incorporated or have been incorporated no more than six months ago. To qualify, the business must meet one of four innovation criteria. May apply for permanent residence “in due course”.

• Personalised Employment Pass (PEP) – issued to well-paid professionals looking to work for a Singaporean employer. Issued for three years and is non-renewable. Resembles an Employment Pass, but without the requirement that the holder remain employed by the same employer, allowing them to change jobs. Must earn a minimum of SG$12,000 per month and have earned SG$144,000 in the previous year. Strict eligibility requirements. May apply for permanent residence “in due course”.

• S Pass – issued to mid-skilled employees carrying a degree or diploma and earning at least SG$2,200. Issued for one to two years (at the discretion of authorities) and is renewable as long as the holder remains employed with the same company. Subject to a quota systems – individual companies may only sponsor a certain number of S Passes. Eligible to apply for permanent residence with applications assessed based on the Immigration and Checkpoints Authority's (ICA) PR criteria.

Please refer to the Ministry of Manpower’s website for further information.

Banking and Finance


As a global financial hub, Singapore offers a wealth of banking choices to visiting Australians.

Personal Banking

A wide variety of retail banks are available across the island. Beyond the four local banks – DBS Bank, Oversea-Chinese Corporation (OCBC), United Overseas Bank and Bank of Singapore (a subsidiary of OCBC) – there are more than 100 foreign banks in Singapore offering a variety of services. Familiar brands such as ANZ operate within Singapore and may be useful as a stop-gap, but to avoid the risk of international transaction charges new arrivals are advised to open a local account.

While ahead of other countries such as Japan, Singapore still lags behind Australia in terms of electronic payment options. In 2017, more than 40% of the value of all electronic transactions were withdrawals from ATMs, but this is falling with the Monetary Authority of Singapore (MAS) hoping for this to fall to 20% by 2020. Much of this can be attributed to the popularity of markets and hawker centres – open-air food courts offering food cooked to order at low prices. In the latter case, it was estimated that only one in every six vendors at hawker centres offer electronic payments.

In short, don’t expect to have to carry hundreds of Singaporean dollars all the time, but do be prepared for the odd ‘sorry, cash only’.

Private and commercial banking

High net-worth individuals can also avail themselves of a wide range of highly secure and deeply customisable private banking services. Singapore is recognised as the banking capital of Asia, and in recent years has seen an influx of assets previously held in secure Swiss bank accounts. Emblematic of this shift in the global private banking market was the movement of the international private banking headquarters of Credit Suisse – the second largest Swiss bank – to Singapore in 2005.

For business and business-owners looking for local financing, many of the above-mentioned banks also provide full commercial banking services, helping you further grow and develop your organisation.


Established in 1967, the Singaporean dollar has been the city-state’s currency for more than half a century. As a remnant from an earlier monetary union with Malaysia and Brunei, the Singaporean dollar (SGD) is interchangeable with the Bruneian dollar (BND).

The SGD is not an entirely free-floating currency. As we will discuss in more detail below, the central bank operates a unique exchange rate policy that permits the SGD to fluctuate within a pre-defined target trading band.

Historically, the AUD/SGD exchange rate has oscillated between 1.3500-.9750. More recently, the pair has converged towards parity so that 1 AUD is now worth almost exactly 1 SGD. Since 2012 the pair has traded almost uniformly lower and is now over 25% below the Global Financial Crisis highs.



Singapore’s uncomplicated taxation system and low rates of individual and corporate taxation continue to make it attractive for those looking to build wealth.

Singapore has a progressive individual tax system with rates ranging from 0% to 22%. The highest tax bracket is charged on income in excess of $320,000. For comparison, an Australian tax resident on an annual salary of AU$360,000 would pay AU$135,232.00 – an effective tax rate of roughly 37.5% before deductibles. A Singaporean tax resident on an annual salary of SG$360,000 would pay SG$53,350.00, or an effective rate of just under 15%.

Note that Singapore also charges a Goods and Services Tax similar to that charged in Australia. However, it does differ in two key ways: Firstly, the rate charged is 7% rather than the 10% Australians are used to paying, and secondly, no exemption is provided for basic food items, medical services, education courses and other GST-free goods as in Australia. The Inland Revenue Authority of Singapore requires that in the majority of cases, all prices displayed in businesses be inclusive of GST, which means no rude shock when you get to the register as in some jurisdictions.

Prospective business owners in Singapore will not only enjoy transacting in what is considered the world’s most business-friendly economy, but also one of the lowest headline and effective corporate income tax rates. Since 2010, businesses have benefitted from a headline tax rate of 17%, offset by generous incentives. In brief, in the first three years of operation a business will pay:

• 0% on the first SG$100,000 of taxable income, • 8.5% on the next SG$200,000 0f taxable income, and • 17% on all taxable income thereafter

After this point, the business will pay: • 8.5% on the first SG$300,000 of taxable income • 17% on all taxable income thereafter

As an example, a Singaporean company turning over SG$5,000,000 would have a tax payable of SG$824,500 or 16.5% before deductibles and other exemptions for FY 2018. For comparison, an Australian company turning over AU$5,000,000 would have a tax payable of AU$1,375,000 or 27.5% before deductibles and other exemptions for the same financial year.

Cost of Living

While Australians settling in Singapore may relish their new, lower income tax rate, costs can quickly add up in other ways. Repeatedly ranking in the top three cities worldwide in terms of cost of living, many Australians expect to experience a bit of sticker shock as they settle into their new home.

However, closer inspection can bring some relief. International price aggregation site Numbeo puts Singapore (29th) a bare three places ahead of Sydney (32nd) on its global cost of living index, with Australia’s next largest city Melbourne ranking a distant 64th behind Adelaide (58th) and Perth (56th), surprisingly.

What this means for you is that depending on your city of origin, you could find costs of living to be significantly higher or slightly lower in a few key areas. According to Numbeo, prices across the board – consumer, rent, restaurant and grocery prices – are higher in Sydney than they are in Singapore – the difference is that the average monthly salary is nearly 40% larger in the former. Those moving from Melbourne can expect to pay less for consumer goods, groceries and restaurant meals in Singapore, but more in rent. The difference in salary here is not so sharp, with Melburnians earning on average 11% more than Singaporeans.

AUD to SGD Exchange Rate

What influences the AUD/SGD exchange rate?

Monetary Policy

Singapore’s approach to monetary policy is completely unique in the global economy: it is the only country in the world to employ a monetary policy system based on exchange rates rather than interest rates. The Monetary Authority of Singapore (MAS) sets a target band for the exchange rate within which it allows the Singapore dollar nominal effective exchange rate to fluctuate. The ‘nominal effective exchange rate’, or S$NEER, is a trade-weighted basket of the exchange rates of Singapore’s major trading and competitor countries.

Since 1981, it has been the policy of the MAS to intervene in the foreign exchange market through the direct sales or purchases of the USD when the S$NEER reaches the edge of the policy band on either side. This is not done as an end in itself, but rather as a means towards controlling inflation in the same way in which the Reserve Bank of Australia utilises its ability to set the cash rate.

The reasons for this system are complex. As a general overview, it reflects Singapore’s small economy and its high degree of openness to trade and capital flows. Singapore’s total lack of natural resources makes it almost completely dependent on imports for necessities like food and energy. It must pay for these imports with exports, thus exposing the economy to trade more than most other developed nations.

Market Factors

The MAS’s exchange rate policy makes the SGD more resilient than other currencies to international financial trends. That said, resistance is not immunity. So long as the SGD does not breach the target trading band it is possible for the currency to fluctuate freely in response to local data and broader financial market developments. For example, rising global oil and food prices are likely to cause the SGD to appreciate as market players anticipate higher levels of domestic inflation in the future.

The openness of the Singaporean economy also makes it extremely dependent on the health of its biggest trading partners, notably China. Given their highly connected supply chains, what hurts Beijing is also likely to also hurt Singapore. That can explain why the announcement of an escalating US-China trade war was seen to have some negative second-order effects on the value of the SGD.

AUD/SGD Snapshot

The AUD/SGD exchange rate will move based on changes in relative valuations between the Australian dollar and the Singapore dollar. Factors that affect the value of the Australian dollar include interest rate policy as set by the Reserve Bank of Australia, economic growth figures such as GDP, as well as shifts in demand for Australian commodities like iron ore and coal. For SGD, where the currency is trading relative to the MAS’ target band, global food and oil prices and the economic well-being of its major Asian trading partners are important drivers of currency valuation.

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