Formation of Company: Singapore or Hong Kong?
Asia’s influence on the global economy has been rapidly increasing. Economists predict that this year, Asia’s GDP will exceed the GDP of the rest of the world combined and that by 2030, Asia will contribute to 60% of global growth. Asia’s expansion has been spearheaded by two of the busiest cities in the world – Singapore and Hong Kong. Both countries have low tax rates and boast an abundance of business opportunities. As such, an entrepreneur thinking of expanding into Asia would likely be torn between setting up their company in Singapore or in Hong Kong. So, which country would be better for the formation of company? Here is a clear comparison of both countries in several areas.
According to several reports, in global rankings, Singapore is ahead of Hong Kong in the categories of “World’s easiest place to do business,” “Most competitive economy,” and “Openness to trade.” However, Hong Kong leads Singapore in the category of “World’s freest economy.”
|World’s easiest place to do business||1||5|
|Most competitive economy||2||7|
|Openness to trade||1||2|
|World’s freest economy||2||1|
Although Singapore’s banking fees have been higher than Hong Kong’s, Hong Kong’s banking fees have been increasing throughout the years. Additionally, due to Singapore’s political stability, it is a lot easier for entrepreneurs to open a bank account in Singapore than in Hong Kong.
Director vs Company Secretary Requirements
For Hong Kong, there is no requirement for the directors to be local. However, the company secretary needs to be local. As for Singapore, it is mandatory for companies to have at least one local director and one local company secretary. Hence, to fulfill these requirements, your company may need to look for a nominee director in Singapore, local director services, or company secretary services. OneStop Professional Services offers all of these services, and our team is composed of highly trained professionals who are guaranteed to help you meet these requirements.
Both Hong Kong and Singapore boast the lowest corporate taxes in the world. Singapore has a corporate tax rate of 17%, whereas Hong Kong’s tax rate is even lower, at 16.5%. As for personal income taxes, Singapore has a progressive rate of 0-22%, while Hong Kong has a progressive rate of 2-17%.
Culture and environment
Singapore is a melting pot of different races, and it offers a huge diversity in language, culture, and religion. It receives heavy influence from Western countries, and English is the primary language spoken. On the other hand, Hong Kong’s main population is Chinese, and Cantonese is the most common language used. Besides this, Singapore is one of the safest countries in the world, with the lowest crime rates. Not only so, but Singapore is also known for being a “clean and green” country, with immaculate streets and clear air. In May 2020, a study found that Singapore had a high air quality index of 65.81, while Hong Kong’s air quality index was low at 30.99.
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