The Leading Hubs for Doing Business in Asia
Hong Kong vs. Singapore
Contributed by AsiaBC | 26 May 2022
Entrepreneurs gotta start somewhere. But where exactly? Which spot in the globe has the most promising future for your business?
As a business owner, you take a lot of consideration when choosing a location for your offshore company — from market to suppliers, accessibility, convenience, and more because these are the factors that can make or break your business’s future.
Part of the Four Asian Tigers along with South Korea and Taiwan, Hong Kong and Singapore race to be the top city destination for doing business in Asia. This blog will show you the key components of why these metropolia are every businessperson’s choice and why they should be on your list.
Asia’s Business Focal Point
Strategically located at the heart of Asia, Hong Kong and Singapore offer a vast network and market for foreign entrepreneurs. Both cities connect their businesses to different countries and neighboring Asian regions.
While both can grant an easy gateway, Hong Kong is the best course to work with Mainland China — travel back and forth in Beijing, Shanghai, and other major cities. Their Closer Economic Partnership Arrangement (CEPA) and Zero Fare tariff also open more business opportunities.
On the other hand, Singapore is home to the busiest port and airport in Southeast Asia. Their famous Changi airport has destinations in the capitals of Asia Pacific, North America, Europe, and the Middle East, having access to 2.8 billion key markets, while their city dock has been an excellent harbour for trading activities.
Entrepreneur’s Tax Haven
Hong Kong and Singapore have been considered tax havens for overseas business owners because of their direct and low tax rate system.
|* Hong Kong Tax Rate||** Singapore Tax Rate|
|Tax System||2-tier tax administration||Single-tier tax administration|
(for the first HK$2 million net profits)
|Salaries Tax||15% |
|Property Tax||15%||Tax will be based on the annual value of the property|
* Hong Kong only collects 3 direct taxes – Profits Tax, Salaries Tax, and Property Tax.
** Singapore imposes tax on Custom and Excise Duties, Goods and Services Tax, Stamp Duties, etc.
Hong Kong and Singapore offer a pool of driven, skilled, and versatile human resources, each with its area of specialization. Hong Kong was named as Asia’s Financial Hub as most of its population studied Finance and Business while Singapore prides itself on IT and software development companies, deeming them to be the Tech Hub in Asia.
Communication will also not be an issue as both regions are well-versed in English. However, Hong Kong uses it more in a business setting as they are more comfortable speaking in Cantonese and Mandarin in their day to day agenda, while Singapore’s diverse culture makes English their primary national language.
When it comes to the employment cost rate, Singapore is much more affordable than Hong Kong.
Robust Economic Standing
Hong Kong and Singapore share individual solid points that support global businesses to thrive in their city – stable economy, highly-advanced telecommunications, and competitive infrastructures. In addition to that :
- Considered as the World’s Freest Economy because of its free trade, free enterprise, and free-market regulation.
- The city strictly enforces an anti-corruption policy to offer a safe environment and sound legal framework for international businesses.
- Hong Kong has efficient and cheap shipping, logistics, and freight forwarding.
- Singapore has a strong trade and investment environment housing primary foreign exchange dealers that placed the city 3rd as the largest foreign exchange centre globally.
- The region supports the creation of digital banking platforms for a more substantial FinTech ecosystem to cater their investors’ overseas dealings.
- A dynamic exporter mainly in electronics, machinery, and equipment, making it easier for business owners to find buyers.
Bank Account Opening
Hong Kong and Singapore have a list of prestigious banks and FinTechs to provide their entrepreneurs’ banking needs.
Both cities comply with the Know-Your-Client (KYC) process to accurately filter the applications they receive, appropriately establish the business’s source of income, and what kind of transactions they should expect from their accounts.
To open your bank account in either Hong Kong or Singapore, you must submit a filled out application form along with the following :
- A physical registered address in Hong Kong with a rental agreement under HK’s company name if it is on a lease.
- HK ID card or work visa of the company director.
- Company incorporation documents and certified true copy of Business Registration Certificate.
- Audited financial statements, business plans, contracts or agreements, and invoices as supporting documents.
- Process time : 3 weeks
- A registered residential address for directors, shareholders, and ultimate beneficial owners.
- Certified or notarised true copy of directors, shareholders, and company secretary’s passport.
- Company incorporation documents and certified true copy of Certificate of Incorporation, Company’s Business Profile, and Company’s Memorandum and Articles of Association.
- Supporting documents such as short-term business plan, proposed activities, prospective customers and suppliers, and sources of funds.
- Process time : 4 weeks
It is already a given fact that traditional bank account openings take time due to their tedious procedure thus, most entrepreneurs opt for Financial Technology accounts (FinTechs) as an alternative to make instant global transactions.
Simple Company Formation
|Government Authority||Companies Registry (CR)||Accounting & Corporate Regulatory Authority (ACRA)|
|Director||1 sole director and can be a non-resident in Hong Kong||At least 1 nominee director who is a resident of Singapore|
|Shareholder||Maximum of up to 50 shareholders||Maximum of up to 50 shareholders|
|Company Secretary||Hong Kong resident||Singapore resident|
|Foreign Ownership||100% foreign ownership||100% foreign ownership|
|Paid-Up Capital Requirement||No minimum capital payment||Minimum of $1 based on the shareholder’s choice of currency|
|Company Formation||1 day||2 days|
AsiaBC Makes It Happen
Choosing the ‘best’ or ‘right’ place to start your offshore company may be too broad to define. Facets like your preferences, needs, and so on can play in when deciding your venture location, and Hong Kong and Singapore are no different. Both regions have their pros and cons, and benefits and features that might or might not work for you. Thorough research, analysis, and a vast network are important in figuring out where you must put up your company.
It can be pretty daunting to pick a city where you can thrive, but AsiaBC will be with you every step of the way. Send us an email at firstname.lastname@example.org or WhatsApp us at +852 6547 1314. Let’s get ready to take on the high road.