Singapore and Hong Kong are both attractive places to set up and run a business. Hong Kong has been a global business hub for decades, but Singapore is fast closing the gap. Both offer advantages to ex-pats and big corporations. So, whether you are looking to learn more about how to trade currency or you have plans to set up a regional headquarters for your global business, here is a guide to doing business in Hong Kong and Singapore.
Tapping into the Asian Markets
Both Hong Kong and Singapore are perfectly located for access to the lucrative Asian markets. Changi Airport and HK International Airport are global hubs for international air travel, with all key Asian cities within easy reach. Both countries also have ports, but Singapore has the top destination for maritime trade. Hong Kong is better you are looking to do business in Mainland China.
Ease of Doing Business
Both Singapore and Hong Kong have strong legal systems, with strict regulatory frameworks in place to protect intellectual property rights and dispute resolution channels if things go wrong. However, Singapore beats HK when it comes to enforcing contracts and property registrations.
Not surprisingly, Singapore achieved a #2 spot on the World Bank’s 2017 Ease of Doing Business list. It was beaten only by New Zealand. Hong Kong was ranked at #5.
In the annual Z/Yen survey of global financial centres, Hong Kong beats Singapore. As the gateway to China, Hong Kong is the third most powerful financial centre in the world. Singapore has fallen to #4. The survey looks at several factors, including infrastructure, business environment, financial sector development, human capital, and reputation.
Based on both surveys, it’s clear that there is not much between the two locations, but if you are in the financial services or fintech sector, Hong Kong probably takes the lead.
Starting a Business
The World Bank’s 2017 Ease of Doing Business list puts Singapore at #6 and Hong Kong at #3. Both countries make it very easy to start a business. Both countries welcome foreigners with open arms. In addition, foreigners enjoy 100 percent ownership of their company, but there are differences if you elect to incorporate your business.
In Singapore, at least one director must be locally registered with the Singapore government and attend your annual meeting. This will necessitate a degree of involvement in the day-to-day running of the business. In Hong Kong, all directors can be foreign, but your company secretary must be a Hong Kong national or a Hong Kong Registered limited company. It is
often sensible to employ a local firm of accountants to take on this role, as this allows them to liaise with the tax authorities on behalf of the directors.
It’s very easy to start a business in Singapore – you can register your business in less than an hour and be up and running in two days. The Singapore government makes starting a business nice and easy, which encourages an entrepreneurial spirit, especially among foreign ex-pats.
Singapore has double taxation treaties with 60 nations around the world, which offers huge tax benefits for business owners. The headline Singapore tax rate is currently 17 percent whereas, in Hong Kong, companies pay 16.5 percent. There are also many tax exemptions available.
The process of starting a business in Hong Kong is also fairly simple. Applications can be submitted online via the Companies E-registry. The entire process of business registration and incorporation can be completed in less than an hour if done online.
Quality of Life
Life isn’t all about work, so looking at the quality of life in both countries is important. Both Singapore and Hong Kong offer a wonderful quality of life with excellent food, healthcare, and a cosmopolitan lifestyle that suits westerners.
There is not much between Singapore and Hong Kong if you’re looking to access the Asian markets, but if you take the Ease of Starting a Business rank as your benchmark, Singapore might just have the edge, however Hong Kong is the business destination with lower taxes and tax exemptions.
Read more about doing business in HK in our Living in Hong Kong section: