What specific conditions are imposed on foreign companies which receive tax incentives, and does the Government track the growth of the Singaporean Core of such companies over time?
I asked Minister for Trade and Industry Chan Chun Seng these questions because many foreign MNCs benefit from huge tax incentives, so it is important to quantify the extent of knowledge and skills transfer to Singaporeans. For example, are we seeing more Singaporeans in management roles in these companies over time?
Mr Chan said that these companies must meet a stringent set of criteria including job creation, total business expenditure, fixed asset investment and a deep commitment to grow capabilities in Singapore. He also said that employees may change jobs along the way so it is “not meaningful” to just look at the number of Singaporeans in any particular set of companies, pointing out that healthy employment and wage outcomes of Singaporeans “give us confidence” that we are heading in the right direction.
Read full Q&A below.
Parliament, 4 Jan 2021
CONDITIONS ON FOREIGN COMPANIES TO DEVELOP SINGAPORE EMPLOYEES
Mr Gerald Giam Yean Song asked the Minister for Trade and Industry (a) what specific conditions are imposed on foreign companies which receive tax incentives to invest in Singapore to develop their Singaporean employees; and (b) whether the Government tracks the growth of the Singaporean Core of such companies over time.
Mr Chan Chun Sing: Our economic schemes, including tax incentives, are means to encourage companies to upgrade their capabilities and expand their operations in Singapore to promote economic growth and create good job opportunities for Singaporeans. Companies, local or foreign, that are keen to qualify for the incentives must be prepared to make significant investments in Singapore. They are also required to meet a stringent set of quantitative and qualitative criteria which include job creation, total business expenditure, fixed asset investment and a deep commitment to grow capabilities in Singapore.
Over the years, we have attracted many local and multinational companies to grow their businesses in Singapore and create job opportunities for Singaporeans. In addition, the government partners these companies on several initiatives on knowledge transfer and skills training, such as the Singapore Industry Scholarship, Industry Postgraduate Programme and SkillsFuture Leadership Development Initiative.
Our range of economic and manpower development schemes reinforce each other to support companies and workers. It is therefore not meaningful to attribute specific employment outcomes to any one specific scheme. A well-functioning dynamic labour market also means there will be a healthy churn of Singaporeans moving in and out of specific firms to others with better paying jobs. In turn, it is also not meaningful to just look at the number of Singaporeans in any particular set of companies – be it local or foreign companies; or those who received more incentives and those who receive less incentives.
The overall effect of our economic and manpower schemes is that we are able to constantly create new and better paying jobs for the current and future generations of Singaporeans. This is manifested in the overall employment and wage outcomes for all Singaporeans. To this end, the healthy employment and wage outcomes of Singaporeans over the years give us confidence that we are heading in the right direction.
Let me also share some examples of how Singaporeans have benefited through these efforts. One example is Mr Samson Tan, who joined the inaugural batch of Salesforce-NUS EDB Industrial Postgraduate Programme in 2019 to investigate novel techniques to increase the robustness of language AI systems to linguistic variation and adversarial attacks. Through the programme, he has gained exposure to industry practices and the application of AI in commercial production. Today, he continues to research on the ethical use of AI at Salesforce while concurrently pursuing his PhD at NUS. Over time, we hope to build a pool of postgraduate manpower like Samson with relevant experience in commercial-driven research, who are ready to take on more complex R&D roles in the industry.
Our programmes go beyond just formal training, but deliberate efforts to develop local leaders to hold critical functions and leadership roles. Let me share another example – Mr James Lim started out as an Engineering and Facility Manager in global medical technology firm Becton Dickinson, twenty years ago. Since then, he has received many opportunities to gain new skillsets and experiences in various facets of the company’s business – from R&D to plant operations, and subsequently to lead as the Director of Operations for Asia Pacific. In 2012, James was appointed as Becton Dickinson’s President for Greater Asia, a post he holds till today.
There are many other stories like that of Samson and James. We are constantly engaged and working with companies to develop our local workforce and leadership, and to draw long-term benefits for our people from our investment promotion efforts.