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Singapore – Tighter rules on foreign workers hit businesses

05 February 2013

Stricter regulations on foreign workers could have a negative impact on the economy in Singapore, according to a number of foreign chambers of commerce. In an open letter to the minister for Manpower, Tan Chuan-Jin, the business networks said that the country may lose out in the future.

The American Chamber of Commerce, British Chamber of Commerce and EuroCham were amongst the nine national chambers of commerce in Singapore to have signed the letter. They said that Singapore's openness to foreign labour had enabled the country to attract foreign talent, which had given it a clear competitive advantage over its neighbours.

But these national chambers of commerce have raised concerns about their ability to employ suitable candidates and tap a larger workforce outside of Singapore going forward.

“Singapore has always been a place where it's certain to build your strategy upon, in a long-term way, to invest, to create your business,” said Brigitte Holtscheider, executive director at British Chamber of Commerce.

“This one seems towards more uncertainty, that means with the change, relatively rapid change, in foreign labour polices, that, I think, led to debate - is Singapore certain to continue to invest? How does it affect your plans, particularly when you are in a labour-intensive policy?”

The chambers have made calls to increase foreign workers in nominated service, construction and manufacturing sectors, or risk serious service deterioration. It supports the pursuit of productivity-driven growth, but is calling for a staged process and flexibility to ensure an effective transition that does not sacrifice business results.

At the same time, a new survey by the American Chamber of Commerce in Singapore shows that 5% of companies, made up of AmCham members, have already moved operations out of Singapore as a result of the labour tightening measures introduced last year.

In November 2012, the government raised the minimum salary threshold for foreign professionals. These workers now have to have an annual salary of at least SGD 144,000 (approximately USD 116,500), an increase from the previous threshold of SGD 34,000. 

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