Post 2: Which city is better as a base for doing business in Asia

Ease of business

Both Hong Kong and Singapore offer an attractive environment for businesses due to their political stability, reliable legal systems and globally recognised banking and financial regulations. However, Singapore often edges out Hong Kong in terms of overall ease of doing business due to its streamlined regulatory framework and stronger focus on innovation and infrastructure. Singapore consistently ranks higher in the global ease of doing business index, with a particularly favourable environment for starting a business, securing permits and accessing credit.

On the other hand, Hong Kong remains competitive with its low tax regime, simple company setup process and strong trade links, especially with mainland China. While both cities provide a strong and business-friendly environment, Singapore’s focus on long-term sustainability and digital transformation often gives it an edge for companies looking for a comprehensive, future-oriented business base.

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Taxation

Both locations are attractive in terms of offering comparatively low corporate income tax (CIT) rates, which are well below the world average of 24%. However, Hong Kong does have some significant advantages over Singapore when considering a holding company location.

• Both territories have a low corporate tax rate: Hong Kong’s 16.5% and Singapore’s 17%.
• Hong Kong does not tax dividends or interest income (potentially). Singapore does tax foreign dividends received in certain cases, but these are subject to double taxation relief.
• Singapore imposes a tax on other offshore income when remitted into Singapore, whereas there is no tax on any other offshore income in Hong Kong. However, Singapore does allow offset under its numerous double-taxation agreements.
• There is no capital gains tax in either country, but do understand possible exceptions to this in Singapore.
• Singapore imposes withholding tax on royalties and interest, whereas Hong Kong only applies withholding tax on certain royalties.
• There is no VAT/GST in Hong Kong, whereas Singapore imposes a 9% GST.
• Personal income tax is relatively low in both Hong Kong and Singapore.
• Singapore has a comparatively more complex taxation system, as there are several incentives and exemptions, while Hong Kong generally has a simple and straightforward tax system.

See all our accounting & tax guides for Singapore and Hong Kong.

Compliance

Requirements for resident director/company secretary

One key difference in company setup between Singapore and Hong Kong is that Singapore requires at least one director to be a resident of the country, while Hong Kong allows all directors to be of any nationality. In Singapore, the director must be a natural person with official residency, which can be an additional business expense. As a result, foreign companies unable or unwilling to relocate a director to Singapore often seek assistance from corporate service providers, such as Acclime.

Both Singapore and Hong Kong require the appointment of a company secretary with a residency requirement. However, while Hong Kong allows a company registered and domiciled in Hong Kong to act as the secretary, Singapore mandates that the company secretary be a natural person. In both cases, businesses often outsource the company secretary role to licensed service providers, like Acclime, to ensure compliance with local regulations.

View our resident officer services in Singapore and Hong Kong.

Annual financial reporting

Singapore and Hong Kong have similar financial reporting requirements, but some audit requirements differ. In Hong Kong, all companies must have their financial statements audited by a CPA. In contrast, companies in Singapore are exempt from audits if they qualify as small companies.

View our Singapore and Hong Kong accounting & tax guides.

Location

The proximity of Singapore to SEA and India and Hong Kong’s integration with mainland China are top factors for businesses when making a decision over which base to choose. This is not simply an ease of travel factor, but one that is related to access to the commercial and cultural ties.

With a pivotal role in the commercialisation of the Greater Bay Area (GBA), Hong Kong will keep its position as the preferred sourcing and purchasing hub in the region. It also remains as Asia’s largest financial centre for the foreseeable future despite the current challenges. That said, the government of the PRC is promoting growth in Shenzhen, by relaxing controls on foreign currency exchange for example, that could rival Hong Kong as a base within the GBA.

However, Singapore has overtaken Hong Kong as the largest container port in the region and has become the logistics centre for Asia. Hong Kong may be the best base for accessing the China mainland for now, but Singapore has perhaps become a better option for accessing Asia as a whole. Additionally, Singapore is a member of ASEAN, the world’s third most populous market with 673 million inhabitants and 140 million new consumers.

Banking

Both Hong Kong and Singapore have first class banking facilities. As global financial centres, both are well-versed in facilitating large international transactions for clients around the world.

While banking services in Hong Kong used to be slightly cheaper, the difference in cost between the two territories has narrowed as fees in Hong Kong have increased.

Hong Kong banks are known for awkward procedures for non-residents to open accounts. While accounts can be opened, the process is not always straightforward. In both Hong Kong and Singapore, banks typically require an in-person interview with directors and authorised signatories, although some banks in Singapore now offer video conferencing as an option. For non-residents, the process usually takes two to three weeks, provided all necessary documentation is in order. Acclime can help clients prepare the required documentation to streamline this process.

Visit our guides for more information on opening bank accounts in Hong Kong and Singapore.

Costs

There is not a significant difference in salary costs between the two territories. Singapore tends towards higher salaries at the top end, but that is reversed for middle management. Clerical staff are paid comparable wages.

When it comes to office space rental, Hong Kong ranks as the most expensive location in the whole of the APAC region, beating Tokyo and Beijing. Singapore, however, is not far behind. Businesses in Singapore often opt for a business park to reduce rental costs, while Hong Kong companies can consider an outlying area, east of Kowloon for example.

Talent

The talent pool in both territories is competitive on a global scale based on the ability to foster, attract and retain talent. Stories of differences in work culture are anecdotal, but these do tend to point to Hong Kong having a culture more favourable to business owners.

English is an official language in both locations, but it is more widely spoken in Singapore where it is often considered a first language. Mandarin is spoken by approximately 50% of the population in both territories, and resourcing talent is not difficult. If a business requires regular contact with markets in the Greater Bay Area, the fact that 97% of Hong Kong’s population speaks Cantonese as a first language could be an important factor to consider.

The type of industry and the roles required will of course be a factor in deciding which location offers the deepest talent pool. For example, Hong Kong’s trading history provides a rich source of sourcing/purchasing talent, whereas Singapore’s strategy of being a regional hub for tech companies has ensured a healthy supply of digital talent.

Immigration

Working permits and visas are straightforward in both territories. If a business or its team is made up of expats considering a long-term move, both Hong Kong and Singapore offer relief from annual visa requirements by providing more permanent solutions.

Hong Kong offers permanent residency status after seven years of living and working in the territory. Singapore goes a step further and will consider citizenship with a passport.

Conclusion

Both Singapore and Hong Kong offer attractive environments for businesses. Singapore stands out for its ease of business, innovation focus and forward-looking infrastructure, making it an ideal base for companies seeking long-term growth. Its higher rankings in global business indexes further strengthen its appeal.

Hong Kong remains competitive, particularly for businesses with strong ties to mainland China. Its low tax regime, simple setup process and proximity to the Greater Bay Area make it a strong choice for companies focused on trade with China.

The right choice depends on a company’s goals and objectives, but both cities provide strong business foundations, making them top contenders for any company expanding in Asia.