Silicon Valley couple in negotiations to move to Singapore

[Somers]

Hello everyone,

My husband and I are currently in parallel discussions with our employers to relocate to Singapore.

Two weeks ago, I was asked to to lead a project in Singapore for six months. If all goes well and/or if I want to stay, my boss and her boss would be willing to secure a work visa so I could stay there. (I am very lucky in that I can do my job anywhere as long as I have access to phones and the Internet.) Since my job and reporting structure would remain exactly the same, my salary, bonus and benefits would not change. The only thing we're haggling on now is the housing and transportation allowance for those six months.

After those six months are up and I want to stay in Singapore, I have questions about whether I should request to be paid in USD or SGD. What are the pros and cons to either option? Is there any way at all to (legally) avoid the double tax from the U.S. and Singapore?! (I'm thinking a huge pro would be the lack of currency exchange fees so I can keep paying our mortgages and U.S. bills, but I don't know if there is something else in the bigger picture I'm not seeing.)

And what are the biggest differences between being a U.S. employee and a Singaporean one? What are some gotchas I may need to look out for in the negotiation process should I switch over? My husband and I are already getting a sense of some of these differences as we tackle his own negotiations...

So last week, my husband received a verbal offer to take on a lateral position from the San Francisco Bay Area to Singapore. Unlike my offer where I would still be paid in U.S. dollars into a U.S. bank account (for at least the first six months), my husband received an offer for 185k $SGD with no guarantee of a bonus and no other perks.

We have a number of issues with this initial offer since 1) the base is 4k $SGD less per year than what he's making now, 2) he's currently guaranteed a bonus and/or a block of RSUs every year that can be worth anywhere between 25-75k $USD, but in Singapore there is no mention of a bonus, and 3) he will lose out on the 6% company match to his 401(k).

The opening volleys of negotiation has already started (i.e., he re-expressed his enthusiasm for the job while raising concerns over compensation), but we're wondering how much we can realistically bargain for since it appears expat packages are dwindling. The only bargaining power he has lies in the fact that the hiring manager has been trying to fill this position for months. To compound the pressure, the hiring manager needs to execute and deliver on a 60-day plan.

On our end (the part that our employers won't care about), we would want to try and only live off of my husband's SGD salary in Singapore. This would entail housing, feeding and supporting us, two young kids (ages 2 and 4), possibly a helper, and two dogs. (Oh, and don't forget school tuition and the occasional weekend getaway.) I have no doubt we can somehow manage to survive in Singapore with 185k $SGD, but we just don't feel right about losing potentially 20-75k $USD every year. With this in mind, what is the likelihood he can negotiate and secure a higher base salary to accommodate cost of living adjustments, round trip flights for the family, temporary housing (in case my employer fails), and/or shipping our belongings to Singapore?

Anyway sorry for the long post, and thanks in advance for any insight or advice. (If you need further details, please let me know.) I am really glad I stumbled onto this forum. It has a tight-knit community feel, and I hope I can participate in other discussions soon.

[PNGMK]

Hello everyone,

My husband and I are currently in parallel discussions with our employers to relocate to Singapore.

Two weeks ago, I was asked to to lead a project in Singapore for six months. If all goes well and/or if I want to stay, my boss and her boss would be willing to secure a work visa so I could stay there. (I am very lucky in that I can do my job anywhere as long as I have access to phones and the Internet.) Since my job and reporting structure would remain exactly the same, my salary, bonus and benefits would not change. The only thing we're haggling on now is the housing and transportation allowance for those six months.

After those six months are up and I want to stay in Singapore, I have questions about whether I should request to be paid in USD or SGD. What are the pros and cons to either option? Is there any way at all to (legally) avoid the double tax from the U.S. and Singapore?! (I'm thinking a huge pro would be the lack of currency exchange fees so I can keep paying our mortgages and U.S. bills, but I don't know if there is something else in the bigger picture I'm not seeing.)

And what are the biggest differences between being a U.S. employee and a Singaporean one? What are some gotchas I may need to look out for in the negotiation process should I switch over? My husband and I are already getting a sense of some of these differences as we tackle his own negotiations...

So last week, my husband received a verbal offer to take on a lateral position from the San Francisco Bay Area to Singapore. Unlike my offer where I would still be paid in U.S. dollars into a U.S. bank account (for at least the first six months), my husband received an offer for 185k $SGD with no guarantee of a bonus and no other perks.

We have a number of issues with this initial offer since 1) the base is 4k $SGD less per year than what he's making now, 2) he's currently guaranteed a bonus and/or a block of RSUs every year that can be worth anywhere between 25-75k $USD, but in Singapore there is no mention of a bonus, and 3) he will lose out on the 6% company match to his 401(k).

The opening volleys of negotiation has already started (i.e., he re-expressed his enthusiasm for the job while raising concerns over compensation), but we're wondering how much we can realistically bargain for since it appears expat packages are dwindling. The only bargaining power he has lies in the fact that the hiring manager has been trying to fill this position for months. To compound the pressure, the hiring manager needs to execute and deliver on a 60-day plan.

On our end (the part that our employers won't care about), we would want to try and only live off of my husband's SGD salary in Singapore. This would entail housing, feeding and supporting us, two young kids (ages 2 and 4), possibly a helper, and two dogs. (Oh, and don't forget school tuition and the occasional weekend getaway.) I have no doubt we can somehow manage to survive in Singapore with 185k $SGD, but we just don't feel right about losing potentially 20-75k $USD every year. With this in mind, what is the likelihood he can negotiate and secure a higher base salary to accommodate cost of living adjustments, round trip flights for the family, temporary housing (in case my employer fails), and/or shipping our belongings to Singapore?

Anyway sorry for the long post, and thanks in advance for any insight or advice. (If you need further details, please let me know.) I am really glad I stumbled onto this forum. It has a tight-knit community feel, and I hope I can participate in other discussions soon.

US Ciitizens have a tax free allowance (component) of about USD90,000 per year if they are truly non resident. You need to factor this in - Singapore has low income tax rates (www.iras.gov.sg) and this may tip the balance.

Schooling is damn expensive here - USD24,000 p.a. - you seem to have glossed over that.

Housing is also expensive - try to have that paid directly by the employer.

I would probbaly stay paid in USD as long as possible - the SGD seems to be on a slow decline now against the USD (finally).

[Somers]

Thanks PNGMK for your comments. My husband and I have been holding off on calculating our taxes since both of us will have to pay Singapore, Uncle Sam AND the state of California. But I guess it will be a good idea to figure this out before he concludes his negotiations (which may happen tomorrow!).

In regards to schooling, my children have dual citizenship - U.S. and German - so I'd like to enroll them in the German or Swiss school. After initial conversations with the school administrators, I've calculated that it will cost a cool 50k $SGD to cover tuition, admin, bus and school trip fees. (I'm guessing many expats here can feel and understand my pain right now.)

I also did my research on housing found that the ever popular Holland Village is equidistant to my office near Labrador Park, my husband's office near Ang Mo Kio, and the German/Swiss schools in Bukit Timah. I have visited Singapore a few times before and found Holland Village as a great place for singles...but I have mixed feelings about raising children there. If anyone has any opinions on this matter, please let me know.

Anyways, depending on what my husband can secure as a base salary (and whether he can take back his bonus potential!), I am budgeting 4-5k $SGD for housing. @PNGMK, when you say have housing paid directly by the employer, are you suggesting they pay the landlord directly then subtract the amount my husband's paycheck? I'm guessing the benefit here is that it can reduce our taxable income. Or are you thinking it would be possible to negotiate some type of housing allowance?

And thanks for the vote on being paid in USD. Until I hear arguments for SGD, I will try my best to maintain the payment status quo.

All the best!

[beppi]

If your initial contract (and therefore visa) is just 6 months, you cannot legally rent residential property, but must live in a hotel or Serviced Apartment - which would probably double your rental expenses!

[Somers]

Hi Beppi, that's a good point. Does that mean if we find housing before my six months is up, the lease can only be under my husband's visa? Once I get my permanent work visa, can I get added to the lease?

Also, is it possible to hold two visas in Singapore? I'm assuming I will receive a dependent's pass under my husband's visa, but then what about my short-term and long-term work visas from my own employer? How does this work?

And I'm guessing my questions are starting to morph over into the "Moving, Relocating to Singapore" category...

[beppi]

If your husband has a residency visa of over 6 months duration, he can rent.
You can only have one visa at a time, either work pass (issued for one employer) or dependent pass (which does not automatically allow work).
Whether a change of main tenant is accepted during the tenancy depends on the landlord.

[srd6]

Had a similar debate about 8 months ago - do I move to Singapore (or another location) and is the package enough? Also US citizen but haven't worked in US in more than 10 years.

Tax issue: no need to worry; you can offset most of your foreign income taxes paid (form 1116) and deduct the first $90k-odd from income subject to US tax (form 2555) and also deduct housing costs (also in form 2555, 'housing exclusion') so ultimately you are probably better off. Ironically if the country is tax free (i.e. UAE) or extremely high tax (i.e. UK) you are actually worse off; somewhere in the middle is best (depending, of course, on your salary - higher salaries are penalized more).

Currency: given the smallish amounts I would get paid in SGD. It's just easier. Traders earning and repatriating $2mil bonuses might care about the tiny exchange rate movements but overall I wouldn't worry about it. More of a hassle than anything else. Why even move money to the US? Keep it in safe (and relatively secret) Singapore.

Housing: it's expensive but you'll find something you like. My kids also go to one of the Bukit Timah schools and we live nearby there. Holland Village is fine for families - the wet market, Cold Storage grocery store and all of the restaurants and other shops are very convenient and there are a lot of families hanging around there on weekends. The housing tends to be high-rise blocks but a few bus stops away you can find low-rise nice developments.

Visa: your husband will get an EP and you will get a DP. On the DP you can work (with some formalities done) but you might get that converted to an actual EP if you have your own job. I wouldn't worry about whose name is on the lease. If it's just your husband's, what's the downside.

Hope that helps! $185k is a bit tight but you can probably do it.

[beppi]

$185k is a bit tight but you can probably do it.

I find that comment pretty misleading: Given that the average Singapore household income is about a third of that number, something must be seriously wrong if you find S$185k/year tight!

[scarbowl]

$185k is a bit tight but you can probably do it.

I find that comment pretty misleading: Given that the average Singapore household income is about a third of that number, something must be seriously wrong if you find S$185k/year tight!

A family of four with two kids in school, yes, that is quite tight. If the kids were in Singapore schools it would be easier. Singaporeans receive quite a few subsidies that EP holders do not. School fees of $50,000, rent & utilities for a family of four (no HDB, right?) would be $50-$60k, school fees of $50,000, Singapore taxes of $20,000, a helper at $10,000, and the bank account balance is dwindling quickly. Transportation, restaurants, clothes (more expensive here), and so on won't leave a lot. It will be challenging with kids living without a car but don't assume you can afford one. Minimum $60-$80k for a car though you can lease one for $1k per month.

The benefit Singaporeans receive from the low HDB costs is substantial. Housing costs for the OP could easily be 1/3 of their earnings.

You could live on $185,000 with these relatively low school fees (GESS and the Swiss school are subsidised by their governments) but there won't be much to travel with.

[PNGMK]

$185k is a bit tight but you can probably do it.

I find that comment pretty misleading: Given that the average Singapore household income is about a third of that number, something must be seriously wrong if you find S$185k/year tight!

Four kids at SAS will burn through about USD$120,000 p.a.

[beppi]

Nobody is forced to send their kids to such expensive schools, especially if there is a much cheaper local school system available, which is consistently highly graded in international rankings.
It's a lifestyle choice, not a necessity!

[srd6]

Nobody is forced to send their kids to such expensive schools, especially if there is a much cheaper local school system available, which is consistently highly graded in international rankings.
It's a lifestyle choice, not a necessity!

What everyone is saying is, the choice is to send to International Schools, and based on that choice, those numbers would be tight. It's not a question of being "forced".

[srd6]

$185k is a bit tight but you can probably do it.

I find that comment pretty misleading: Given that the average Singapore household income is about a third of that number, something must be seriously wrong if you find S$185k/year tight!

Four kids at SAS will burn through about USD$120,000 p.a.

Mine burn through $80k for 3 kids in GESS (even "subsidized") and because we want them to continue with German as a schooled second language, and also due to cultural issues, we make that choice. That plus $8k housing plus $2k/month car plus $1k/month helper (after her expenses of flight ticket home, etc.) the $185k wouldn't be enough. Then there's taxes...

[Dert42]

We live on near what you're talking about and are doing quite well so far. Haven't been here long enough to know how taxes are going to come out, but I'm told good.

We also have two kids. 6 and 2. The older is in SAIS. The other is stay at home with my wife.
SAIS is damn expensive, but it's really nice and our son is doing very well and is happy.
We could not afford to send my little one to a private school on just my salary.
Fortunatly my wife wants to go back to work, so we're not worried about it.

Our rent is $4,300 and there are many options that would of suited us in that range and we're very happy with ours.

Life is good in Singapore and we enjoy it and are glad we moved.
Personally I wouldn't uproot my kids for a 6month stint. Just go for the perm position.

[zzm9980]

$185k is a bit tight but you can probably do it.

I find that comment pretty misleading: Given that the average Singapore household income is about a third of that number, something must be seriously wrong if you find S$185k/year tight!

I find your comment pretty misleading: The average Singaporean lives in subsidized housing not available to foreigns and also has almost free schooling for their children.

Local school isn't always an option for foreigners as there are significant restrictions and limitations as to where the child can go to school. Also, they can still expect to pay at least S$800-900 per month per child for the "local" option.