As you can imagine, the pace of business incorporation throughout the Far East is proceeding at a brisk pace. 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 of the similarities and differences in the setting up business in each of these two hot destinations.
First, both cities are booming and offer plenty of business opportunities in very many industries. The quality of life is good, and both places are politically stable. There has been a lot of wealth 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, there are similar services available in Hong Kong, although they cost more and don’t provide the free extras that we do. But Hong Kong’s biggest disadvantages relate to costs and regulations. Let me enumerate:
> Singapore has low corporate tax rates –: about 8.5 percent up to $200K profits and a flat 17 percent thereafter. In addition, new corporations enjoy start up tax exemption 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 percent for corporations, but there are no comparable tax exemptions. When exemptions are taken into account, the effective corporate tax rate for newly incorporated business is much higher in Hong Kong.
> Singapore has stable political environment. You will find easier to open bank account in Singapore compared to Hong Kong as well.
> Singapore encourages the creation of small- and medium-sized enterprises through a generous regime of tax breaks and grants.
> Singapore provides government grants, up to 60 percent of costs, for the purchase of 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 end up paying close to 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 in with clean streets, clean air, public transport system, and safety in the city.
> Singapore’s residential property is much affordable compared to Hong Kong. This should be one of your consideration if you are planning to relocate to the region to operate your business.
> Both Hong Kong and Singapore have no taxes on dividends, capital gains, inheritances or estates.
> The Singapore work force is clearly superior, with much higher education standards and almost universal use of English for business. In addition, labor costs are lower in Singapore.
In summary, both locations offer business significant opportunities, but those opportunities cost less in Singapore. For more information, you can see Why Set Up Investment Holding Company in Singapore.