Singapore vs Hong Kong - The Battle of Business Titans
When it comes to setting up a business in Asia, two prominent choices stand out: Singapore vs Hong Kong. These bustling cities have long been hailed as business hubs, attracting entrepreneurs and investors from around the world. But which one is the right choice for you?
In this article, we will dive into the battle of the business titans, comparing the key factors that make these cities attractive for starting and running a company. From taxation and legal frameworks to market accessibility and cultural considerations, we will explore the pros and cons of both Singapore and Hong Kong, helping you make an informed decision and find the perfect fit for your business ambitions in Asia.
Table of Contents
1. Singapore vs Hong Kong : Company Incorporation Requirements
Companies can be formed in either Singapore or Hong Kong with little difference in paperwork requirements.
Hong Kong | ||
Basic Requirements | - At least 1 shareholder | - At least 1 shareholder |
Other Requirements | - Paid-Up capital of S$1 | - Authorised capital of HK$10,000 |
Tax Residency | - To be eligible for Singapore tax residency, the management & control must be done from Singapore | - No definition of tax residency, dependent on DTA |
Incorporation Time | - A Few Hours | - 7 Days |
Annual Compliance | - Annual General Meeting | - Annual General Meeting |
Audit Requirements | - Audit only required if its not an exempt private company | - Audit is mandatory |
Exchange Control | - None | - None |
Bank Account Location | - Anywhere | - Anywhere |
2. Singapore vs Hong Kong : Tax Rates
Singapore’s tax policies provide it a significant advantage over Hong Kong.
Hong Kong’s jurisdiction is limited solely to its territory, but Singapore has a territorial tax system that includes remittances.
There is no capital gains tax in either of them.
In both countries, dividends can be distributed free of withholding tax, and authoritative tax decisions can be obtained in advance.
Singapore | Hong Kong | |
Tax System | Territorial and tax on some types of remittances | Purely territorial |
Tax Exchange Information | Yes, if request is specific and reasonable | Yes, no court order required |
Number of Tax Treaties | 76 | 30 |
Corporate Tax Rate | Up to 17% (Effective rate is usually a lot less if companies take advantage of the tax schemes available) | Flat rate 16.5% |
Goods & Services Tax | 9% | None |
Capital Gains Tax | None | None |
Avoidance of Double Taxation | Ordinary credit method | Ordinary credit method |
Tax Incentives | - Corporate Tax Rebate | None |
3. Singapore vs Hong Kong : Advantages & Disadvantages
Singapore | Hong Kong |
Business friendly tax incentive schemes which offer lower effective corporate tax rate (with tax incentive schemes) | Lack of business tax incentive schemes. Flat corporate rate of 16.5% |
Extensive network of cross-border tax treaties | Cross-border tax treaties not as extensive as Singapore but some treaties with eg. Indonesia is better suited for some businesses |
Requirement for a resident director for the incorporation of a company | No requirement for a resident director for the incorporation of a company |
Renowned for its political stability | Political unrest in recent years |
Singapore's multicultural society embraces diversity and provides a harmonious operating environment for enterprises. | Understanding the local culture and adapting to it can be crucial to the success of business operations in Hong Kong. |
The widespread use of the English language facilitates international business communication. | Even though English is widely used in Hong Kong, Chinese language and cultural norms exert a substantial amount of influence. |
If market access to Southeast Asia is a top priority, along with a diverse and inclusive business climate, Singapore may be the best option. | Hong Kong may be preferable if your objectives are to have access to the Chinese market and to be a part of a thriving financial centre. |
We have helped many entrepreneurs and international businesses make the right choices when setting up in Singapore. Contact us for advice on moving or setting up your business in Singapore.