5 common financial mistakes to avoid as an expat in Singapore

September 13, 2023

Singapore is a popular destination for expats from across the globe. In fact, InterNations reveals that 29% of Singapore’s population are categorised as “non-residents”.

While moving to Singapore can be an enriching adventure with plenty of opportunity, it can also present unique financial challenges that require careful consideration. 

Continue reading to discover five common mistakes that expats make with their finances, and some steps you can take to avoid any potential difficulties. 

1. Not taking out the right insurance

Singapore boasts a high-quality healthcare system. Indeed, Statista reveals that it was ranked as the best in the world in 2023, according to the health index score. It’s important to remember, though, that this quality often comes with a price tag to match.

While the exact amount you’ll pay for healthcare will depend on whether you’re treated at a public or private hospital, the cost could still be higher than you’re used to. If you become seriously ill or are injured and require treatment in hospital, medical costs could use up a sizeable portion of your savings. So, it may be worth shopping around for healthcare insurance that suits your current needs.

If you already have health insurance, you may want to review your policy. Make sure you check whether it’s portable and would entitle you to the level of care you require in Singapore without facing substantial medical bills. 

It’s sensible to review your other protection policies as well, to ensure your cover remains valid in a new jurisdiction. This could include: 

  • Life insurance
  • Income protection insurance
  • Critical illness cover 

Take time to review and update these policies before you move to avoid a gap in cover that could prove costly if you needed to claim.  

Read more: Revealed: the real cost of a critical illness in Singapore and how protection can help

2. Being unaware of new tax rules 

It’s useful to understand your tax position as an expat, as you may be subject to tax laws in your home country as well as in Singapore. For example, if you derive income from Singapore, you’re typically required to file a local Income Tax return. 

Compared to many other nations, Singapore has a relatively favourable taxation system. In some cases, it may have a double taxation treaty with your country of origin. This can help to ensure that you aren’t taxed in Singapore and elsewhere.

Regardless, it’s important to have a working knowledge of the tax rules that apply to your personal circumstances. The penalties for not paying the correct amount of tax can include a 300% fine on the tax undercharged and even imprisonment.

3. Not updating your estate plan 

Estate planning rules in Singapore may differ from your country of origin. So, be sure to review your current estate plan and update it accordingly. 

If you have assets in different locations around the world, they may be subject to different local tax rules. If you fail to update your estate plan, this could complicate the dividing of your estate when you pass away, and your family could face a sizeable Inheritance Tax bill on your assets.

Estate planning is about more than simply writing and updating your will, though. You may also want to review your Lasting Power of Attorney (LPA). This is a legal document that allows someone you trust to make important decisions about your health or finances should you lose the mental capacity to make these decisions for yourself.

When you move to Singapore as an expat, you must submit your LPA to the Office of the Public Guardian for certification. Only an LPA certified in Singapore is recognised there.

It is sensible to do this as soon as possible. If you lose your mental capacity and don’t have an LPA in place, your family may need to apply to the courts for the authority to make any critical decisions on your behalf. This can be costly and time-consuming as well as causing extra stress during a challenging time. 

4. Not updating your budget to reflect a higher cost of living

According to Mercer’s 2023 cost of living survey, Singapore is the second most expensive city in the world, rising by six positions since the last survey in 2022. So, creating a budget to stick to could be helpful for ensuring you don’t accidentally overspend while you adjust to your new environment. 

One of the most significant expenses you’re likely to have is rent. CNBC reports that rents for private residential properties increased by 29.7% year-on-year in 2022, the highest rent has been in Singapore since 2007. On top of this, you may still have some financial obligations in your country of origin. 

To calculate your monthly living expenses when you move to Singapore, start by understanding what your day-to-day costs may be including utilities, groceries, and travel. Combine these with any insurance and rental costs, as well as any other financial obligations you have. 

This should give you a rough idea of how much you’re likely to spend each month, and how much you’ll have left over for additional expenses. 

5. Not consulting with a specialist financial planner

As you can see, there are many unique financial considerations to make when you move to Singapore as an expat. Attempting to deal with this by yourself could cause unnecessary stress and lead to you making costly mistakes. 

So, to make things easier on yourself, it may be wise to speak with a specialist financial planner.

When you enlist the help of a professional who is experienced in helping others who are in your position, you can feel confident that the decisions you make on their advice will be suitable for you. Moreover, you’ll know that your finances are working for you so that you have the best chance of achieving your long-term financial goals. 

Get in touch

At Ascenta, we have expert knowledge and understand the unique challenges you may face as an expat in Singapore, so we can help update your financial plan to reflect your new circumstances. 

If you wish to know more about how we can help, please get in touch. Either contact your financial planner directly, email us at hello@ascentawealth.com or fill in our online contact form to organise a meeting and we’ll get in touch.