Why invest in Singapore or Hong Kong?

Singapore and Hong Kong are two of the most well-known business destinations in Asia. Although the two cities have been competing over the years for their business dominance in Asia, they have unique characteristics and advantages for investors. It is not uncommon for investors who have opened a business in one Asian jurisdiction to expand their activities. Investors in Malaysia can choose to invest in Singapore or Hong Kong in order to diversify their client base in the Asia-Pacific region.

Investments in Hong Kong

Hong Kong is strategically located in Asia and one important advantage is that it is very close to Mainland China. This can be an important factor for those foreign corporations interested in setting up their operations in Hong Kong.

Like Singapore, Hong Kong is known for its policies that make it very easy to set-up a company here. The simple registration method with the Companies Registry makes it possible to open a company in Hong Kong in less than one week.

Hong Kong has a low taxation regime, with the corporate income tax rate being 16.5% and a lower rate of 15% is available for unincorporated businesses. The Government implements an accelerated depreciation allowance for expenditure made on research and development, manufacturing machinery, computer software and hardware and certain copyright and patent purchases.

Investments in Singapore

Malaysian investors who want to expand the business to Singapore also benefit from a good location in Asia, ease of doing business and ease of paying taxes. Like Hong Kong, Singapore has a competitive economy and is open towards international trade.

The corporate tax rate for companies in Singapore is 17%. Companies are exempt from tax for 75% of the first chargeable 10,000 SGD and for 50% of the following 290,000 SGD.

Companies in Singapore benefit from several tax incentives. These apply for companies involved in research and development in certain technological fields, companies that optimize the use of land through domestic or foreign relocation (the land productivity grant), companies that encourage the development of their employees (training grant).

Apart from offering certain incentives to investors, Singapore also has a number of free zones. These locations are regulated through a special act and allow foreign companies involved in the trade sector to store their merchandise as well as benefit from an exemption from the customs duties as long as the said merchandise is located in those zones.

Both Singapore and Hong Kong rank well in key areas for business, like incorporation procedures, ease of paying taxes, workforce quality or openness to trade. Both jurisdictions are well perceived for their quality of life and the easiness with which expatriates can set-up here.