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Hong Kong and Singapore have been among the two most preferred countries for company incorporation by foreign entrepreneurs, and rightly so. After all, both Singapore and Hong Kong hold top places in the World Bank’s Ease of Doing Business category, are often perceived as the future of international banking and trading in Asia, and are home to bustling startup ecosystems producing unicorns and decacorns left and right.
How then does a foreign business choose which country would be best for company registration in 2023? Let us take a closer look at the pros and cons of company incorporation in Singapore and Hong Kong to understand this better.
Also Read: A Step-By-Step Guide To Incorporating Your Business In Hong Kong In 2022
When it comes to company incorporation in the highly competitive region of the Asia Pacific, some investors and founders prefer Singapore due to its favorable lifestyle, robust infrastructure, and high calibre of service providers, while others favour Hong Kong primarily with the sole objective to gain access to the larger Chinese and North Asian markets.
Singapore is often chosen by smaller companies because it provides more alluring tax incentives and a more affordable environment than Hong Kong.
Let us examine the pros and cons of company registration in both countries to deconstruct this further and make an informed decision in 2023.
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Company registration in Singapore in 2023 |
Company registration in Hong Kong in 2023 |
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Pros |
Cons |
Pros |
Cons |
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Great business incentives |
Remittance taxation (depending on the kinds) |
Allows Hong Kong businesses who are based there but making money elsewhere to file an offshore claim status |
Insufficient business incentives |
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No audit prerequisites in most cases |
Occasional withholding taxes |
Tax-free goods and services
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Political disruptions and instability over the years |
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Strategically located close to other major markets in the region, such as Malaysia, Indonesia, and Australia |
Need for a local director |
Gateway to China |
Lack of English-speaking talent
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No dearth of financial assistance for startups and existing businesses from the government as well as private VCs and investors |
– |
A wide range of coworking venues, investment programs, and other support systems for startups
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– |
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English-proficient manpower |
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More affordable company incorporation processes and operations than Singapore |
– |
Robust modern infrastructure with high-speed internet and a
digital-first economy
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Robust modern infrastructure with high-speed internet and a digital-first economy |
– |
Undoubtedly, both nations offer a wide range of opportunities for firms to grow and enter new markets like China, Malaysia, Indonesia, Australia, and others. Both nations have cultivated business ecosystems that are welcoming to new startups and provide acceptable tax advantages.
Singapore and Hong Kong both have diverse ethnic populations and a very high standard of living. Additionally, given that both Singapore and Hong Kong employ English as one of their official languages, many foreign business owners feel at ease expanding their operations there.
However, the political climate of a country is arguably the most important aspect to take into account when starting a business there, among all other considerations. Singapore certainly surpasses Hong Kong as the most recommended location for company incorporation in Asia due to its peaceful political climate, in addition to its comprehensive tax regulations, lower payable taxes that come with multiple benefits, and stable economic system. Of course, if your company’s primary business relationships are with China, you might want to go for company registration in Hong Kong; otherwise, Singapore is the clear winner.
In fact, in 2020 the American Chamber of Commerce in Singapore (AmCham Singapore) conducted of its members to ascertain businesses’ attitudes towards the political and business situation in Hong Kong where a total of 47 responses were collected from a diverse industry pool and found that most of the surveyed businesses (more than 80 percent) had their regional head office located in Singapore.
Despite being a small country, Singapore has risen as an ideal financial hub and has made a lasting impact on the world stage as a business centre. Due to factors like efficient government bureaucracy and openness towards entrepreneurship, company incorporation in Singapore is relatively easy and can be conveniently done within an hour with the right kind of support and guidance. And, this is where corporate secretarial services can help.
Read Also: Is company incorporation in Singapore a great idea in 2023?
Once you have made up your mind about the ideal destination for company incorporation in 2023, the next step is to decide how to go about it. Instead of scratching your heads and worrying about documentation and formalities, why not opt for accounting service outsourcing? Go with a reliable and experienced corporate secretarial service provider like PikoHANA for a hassle-free seamless company registration process.
PikoHANA is a model corporate service provider that offers top-notch holistic services, such as supporting the creation of a nominee director, managing end-to-end documentation, and lending their knowledge to guarantee seamless company registration in Singapore.
Learn more about company incorporation here or simply reach out to us to start your company registration process now!
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