Asia is a premiere destination for many commercial businesses seeking international expansion, which is why we wanted to explore the depths of Singapore vs Hong Kong. These two hotspots come with plenty of benefits and disadvantages. For example, Singapore is ranked one of World Bank’s easiest places to do business. While Hong Kong gives businesses easy access to the benefits of China while operating on a smaller scale. Let’s look at more comparisons below.
Singapore vs Hong Kong: Benefits & Disadvantages
Hong Kong – The Benefits
Hong Kong is still run by the Chinese government, and while that presents some negative implications, it also presents the opportunity for growth. The region’s proximity to China gives companies access to the homeland’s market while operating on a smaller scale. Your business will still be subject to similar regulations, which you should discover through consultative assistance, but you’re in a less competitive market.
Another benefit is that Hong Kong has some of the lowest corporate taxes in the world. The tax regime is simple and doesn’t change often. The profits tax right is the same for foreign and local companies and it currently sits at a low 17.5%
Hong Kong – The Disadvantages
One major disadvantage for businesses operating in Hong Kong are the strict regulations on financial services. These are tighter than regulations in the Mainland. Businesses seeking capital may find it more difficult in this region. On a positive note, with Hong Kong’s smaller size, legislation is more adaptable. As the region grows, these regulations could ease up.
Another disadvantage is trying to open a business branch through the government’s resources. Reports state that the process is tedious and cumbersome. Luckily, there are options like Foreign Subsidiary as a Service (FSaaS) that manage this process for business owners looking to quickly and affordably get started up in a new country.
Singapore – The Benefits
Singapore is an attractive spot for businesses looking to grow internationally. Like Hong Kong, it has a low and fixed corporate tax rate at 17%, funding availability, talented and available workforce, and flexible immigration policies for expatriates.
In addition, Singapore has a thriving economy that is open to new business. These are the perfect markets to target in your global strategy because there are typically plenty of resources available to help your business thrive.
Singapore – The Disadvantages
If you’re a business seeking entry level talent, it may be a bit more difficult to attract candidates in Singapore. The reason is that officials are urging local talent to seek higher value occupations like finance and industrial engineering. If your business operates in those sectors, then this may actually be an advantage for you.
Another disadvantage is the availability of land and space in Singapore. It’s a small island that is becoming increasingly popular for businesses. As a result, office spaces are becoming a bit more scarce, driving prices up. It’s all about supply and demand. It’s not a huge concern right now, but it’s something to consider if Singapore continues to grow at a rapid rate.
Singapore vs Hong Kong: Employment
Both regions offer work permit options for foreign employees, while also encouraging businesses to employ local nationals. In Hong Kong, there are various visa options, also known as schemes. The most common scheme is having foreign employees start working on a 90-day tourist visa and extending that for another 90 days by going over the border to China and coming back into the country.
Foreign employees and expats seeking employment in Singapore can apply for an employment pass. First-time candidates can stay for up to two years and apply for a renewal, which grants them three more years in the country. It’s a smooth process that offers flexibility for employers seeking foreign talent.
In addition, Singapore offers additional benefits for employers by assisting with recruitment. Singapore is open to foreign businesses and willing to promote opportunities to their local workforce.
If you’re considering a move into either one of the regions, consider using FSaaS to establish a legal presence and manage compliance. To learn more about this service, give us a call!