ANNOUNCED AS TEMPORARYNo
On 17 February 2012, the government of Singapore announced wide-ranging restrictions to the employment of foreign staff.
Effective 1 July 2012, the "Dependency Ratio Ceilings" (DRCs) has been lowered for both services and manufacturing. Under the new regime, a maximum of 45 resp. 60 percent of total staff may be of foreign nationality.
Companies have been granted two years to adjust to these ceilings. However, from 1 July 2012 new work permits are only issued to companies operating below the stated ceilings.
Increased leavies on foreigners in construction
In a measure tailored to the construction sector, levies on foreign workers with "basic" skills are increased from $550 to $650 in January 2013, and raised once more to $750 in July 2013. Furthermore, the maximum work-load carried out by foreign staff in a construction project (so-called "Man-Year-Entitlements") has been reduced by 5 percent from 1 July 2012.
Support for older employees
The government also announced a Special Employment Credit worth 8% of wages. It will be distributed to those companies hiring above 50 year old Singaporeans who earn less than 3'000 SGD per month. A lower SEC rate will be given for those earning between 3'000 and 4'000 SGD. According to estimates, the scheme should cover 80% of the Singaporean working population over the age of 50 and will last until 2016.
One-off cash grant to Singaporean companies
Due to the economic downturn, Singaporean firms shall receive a one-off cash grant worth 5% of their earnings with a maximum of 5'000 SGD per company. The scheme costing about 360 million SGD is aimed at supporting particularly SMEs.
Amendment PIC scheme
The 2010 introduced Productivity and Innovation Credit (cf. Related Measures) was again amended with an increased cash upfront payment of up to 60'000 SGD (previously 30'000). Also, the payout and the related application process will be conducted each quarter. Previously, companies had to wait a year for the next payment.
Other state aid programmes
Other programmes included an almost full (90%) coverage by the government of employee training programmes for SMEs for a duration of three years and a similar scheme for self-employed individuals. The government shall further increase the subsidy rate from 50 to 70% on grants for capability developments in SMEs under scheme managed by SPRING and IE Singapore. In total, Singapore will inject in 2012 1.4 billion SGD through the various projectsto support local businesses.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.
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