Singapore or Hong Kong for Incorporating Your Business
As you can imagine, the pace of business incorporation throughout the Far East is brisk. Entrepreneurs from around the globe are seeking access to lucrative new markets, of which Singapore and Hong Kong lead the pack. Let’s look at some similarities and differences between company incorporation in Singapore vs Hong Kong and setting up business in these two hot destinations.
First, both cities are booming and offer many business opportunities in many industries. The quality of life is good, and both places are politically stable. A lot of wealth has been generated in both places, providing a healthy supply of potential investors.
As you know, 3E Accounting is a leading incorporation agent in Singapore. We can turn your finished paperwork into a corporation in half an hour. But honestly, similar services are available in Hong Kong, although they cost more and don’t provide the free extras we do. However, Hong Kong’s biggest disadvantages relate to costs and regulations. Let me enumerate:
> Singapore has low corporate tax rates –about 8.5 per cent up to $200K profits and a flat 17 per cent thereafter. In addition, new corporations enjoy start-up tax exemptions on the first $100K of normal chargeable income for their first three consecutive years of operation.
> In Hong Kong, the normal rate of its profits tax is 16.5 per cent for corporations, but there are no comparable tax exemptions. When exemptions are considered, the effective corporate tax rate for newly incorporated businesses is much higher in Hong Kong.
> Singapore has a stable political environment. You will find it easier to open a bank account in Singapore than in Hong Kong.
> Singapore encourages the creation of small- and medium-sized enterprises through generous tax breaks and grants.
> Singapore provides government grants, up to 60 per cent of costs, for purchasing technology like computers or accounting software. Hong Kong has no such grant.
> Singapore businesses contend with less red tape. For instance, Singapore requires no auditing for privately owned companies with revenue less than $10 million. See more information at Audit Exemption in Singapore.
> Effective personal tax rates are higher in Hong Kong. For instance, a person earning USD 65,000 in Hong Kong would pay nearly USD 6,500 as personal income tax. In Singapore, he would only have to pay approximately USD 4,000.
> Singapore is a good place to live with clean streets, clean air, a public transport system, and safety in the city.
> Singapore’s residential property is much more affordable than Hong Kong’s. If you relocate to the region to operate your business, this should be one of your considerations.
> Hong Kong and Singapore do not tax dividends, capital gains, inheritances or estates.
> The Singapore workforce is superior, with much higher education standards and almost universal use of English for business. In addition, labour costs are lower in Singapore.
In summary, both locations companies, incorporated in Singapore and Hong Kong, offer significant business opportunities, but those opportunities cost less in Singapore. You can see Why Set Up Investment Holding Company in Singapore for more information.
