Singapore Company Incorporation with Paul Hype Page
Company Registration at Paul Hype Page Singapore

Where to incorporate a business is probably one of the most common and first questions that arise when one is contemplating investing offshore. There is no straight answer to this concern. Wherever one chooses to incorporate their business or company depends on conditions that will favor the type of business they are about to carry out.

Both Hong Kong and Singapore have their benefits and disadvantages in equal measure when it is a question of erecting a business. Some of the factors that you should consider when incorporating a company include the activity of the company, location of clients and suppliers, ease of doing business, taxation laws, ease of incorporating a company, type of documents required, and banking facilities required by the applicant.

Among others, these are some of the questions that any investor should ask before making their final decisions on where to invest. Both Hong Kong and Singapore are in Southeast Asia, and it is hard to choose the best place to set your business. Some decades ago, Hong Kong was popularly known for its business opportunities, and most expats preferred the location for business purposes and employment opportunities. However, that is not the case with the current business opportunities and possibilities. Singapore is picking, and it has grown into a business hub for the expats. These are some of the comparisons that this article will highlight to enable you to make informed decisions on the best place to invest. 

Geographical Location 

Singapore is located between the East and the West. It maximized the benefit and rose to an Entrepot to serve both ends. Its central position gives it an upper hand when it comes to utilizing the port and thus receiving a relatively high number of visitors in its port. It has one of the best port facilities and connects over 600 major ports distributed globally. Singapore’s shipping port is ideally one of the busiest and oldest ports in the world. Its extensive marine services network makes it a destination for most investors. 

Nonetheless, Hong Kong equally occupies a favorable location. Its proximity to China exposes it to more consumers thus customers. Approximately 1.2 billion potential consumers make Hong Kong’s location advantageous to incorporate a business. Singapore and Hong Kong give ease of access to the emerging economies within the Asian subcontinent. Singapore’s Changi Airport and Hong Kong’s International Airport are arguably some of the best airports globally. Both of the airports offer accessibility to all world’s major cities, making them better options for investors. 

As an investor, depending on whatever your consideration with location is, any of the states can be a better option to start and run your business as they both offer an advantage in a way or another. Thus location is a win-win when comparing Hong Kong to Singapore.

Ease of doing business 

Both Singapore and Hong Kong are known for their ease of doing business, and the entire process of starting a company in both countries is approximately three working days. The availability of infrastructures in both states is added advantages to the ease of doing business in Hong Kong as it is in Singapore. As of 2020, Singapore was ranked 2nd in the world with ease of doing business while Hong Kong was ranked 3rd. Therefore, Singapore wins with the ease of starting and doing business.  

Quality of life 

While both Hong Kong and Singapore are similar in several factors that one would consider when doing business, it is not the case with the quality of life. Singapore is considered as one of the easiest places to adapt to when doing business. The cosmopolitan city has a stunning social and ethnic fabric that offers a unique blend of different cultures and lifestyles. It is considered one of the modernized and civilized states, and English is the widely used language of communication. Besides, Singapore enjoys a healthy, nutritious, and pollution-free environment free from congestion and traffic. Singapore offers a wide variety of foodstuffs, and it follows the urban standard of living that gives its citizens a relatively higher quality of life than its rival Hong Kong. Thus, Singapore ranks higher than in Hong Kong in the quality-of-life consideration. Therefore, if you are not familiar with the Southeast Asia lifestyle, then you are more likely to adapt fast in Singapore than you will in Hong Kong.

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Taxation 

Any investor is often concerned with the taxation system of a country. One of the unique advantages that Singapore has is its relatively low and effective tax rates. However, both regions follow a single-tiered system for the personal income tax. The maximum income tax rate for Singapore is 22% for persons earning over SGD 320,000. On the other hand, the income tax for Hong Kong ranges between 2% to 17%.

The corporate tax in Singapore is at a flat rate of 17%, while that of Hong Kong is at 16.5% of the assessable profits and 15% for unincorporated businesses. The corporate taxation system in Hong Kong is relatively lower than that charged in Singapore. Both Singapore and Hong Kong do not charge capital gains tax. 

Business Losses 

Hong Kong does not allow carry backward business losses while Singapore does it for a year with a cap of S$100,000. However, both states allow for indefinite carrying forward losses while such losses in Singapore are subject to the shareholding test. 

Response to Covid-19

The disease commenced in China, and Singapore knew well what the disease capable of doing. Since the virus brought China, which has approximately a population of 1.4 billion to its knees, it took the initiative to prepare. Singapore and other Asian countries were well prepared to protect their social, economic, and healthy lives. Some of the five things the country did to prepare its economic muscles and business running is to; keep those who test positive in hospital facilities, not going to lock down based on fears, organized leadership, and strong regulations to minimize the risks. These have made Singapore develop a strong response system for the virus to permit them to continue with their business as usual. The pandemic has globally affected regions and businesses. Being close to China, where the pandemic started, Hong Kong has observed the regulations and has only 130 people already infected by the virus. The protest to protect an extradition bill that requires suspects to be sent to Mainland China was meant to make the people of Hong Kong enjoy their freedom and avoid contraction of the virus when taken to China. However, the constant protests and demonstrations can significantly lead to the rise of contaminations. 

Conclusion 

Ideally, it is possible to conduct business either in Hong Kong or Singapore. However, according to the comparisons above, in as much as Hong Kong is closer to China that makes its market base relatively larger, Singapore is still the best place in Asia to incorporate a company. Further, protests and political unrests in Hong Kong are some of the hindrances to doing business in the state. Comparatively, Singapore has stable governance and economy. Other competitive advantages that Singapore has over Hong Kong include world-class infrastructure, excellent connectivity, and strategic geographical location. In a nutshell, Singapore is much better in the ease of doing business in Asia. 

Should I incorporate in Hong Kong or Singapore? FAQs

Is the corporate tax in Singapore lower than Hong Kong?2020-12-10T00:52:46+00:00

No, Hong Kong (16.5%) has lower corporate tax as compared to Singapore (17%). 

Should I incorporate my business in Hong Kong or Singapore?2020-12-10T00:52:25+00:00

Both Singapore and Hong Kong are world-class countries for investment. Both of them have independent advantages and reasons for investors to consider. Check the above reasons to help you make the decision. 

Why is Singapore preferred for doing business?2020-12-10T00:52:08+00:00

There are several reasons why people choose to do business in Singapore and one of the main advantages is the ease of doing in the country and the ability to adapt in Singapore fast as a foreigner.  

Is living in Hong Kong more expensive than living in Singapore?2020-12-10T00:51:17+00:00

Yes, living in Hong Kong is more expensive than living in Singapore. According to the Economist Intelligence Unit’s cost of living report 2020, Hong Kong is the most expensive city in the world. A cup of coffee will easily cost around S$9.48 in Hong Kong; while in Singapore, it will cost about S$6.77 per cup. 

2021-05-18T08:52:35+00:00December 10, 2020|0 Comments
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