Incorporating a Business: Hong Kong vs. Singapore
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Both Hong Kong and Singapore are English speaking regions with low tax rates, great banking services and supportive legal systems. These qualities make both places ideal as gateways for global entrepreneurs. Because of the similarities between the two cities, there has always been a friendly competition or sorts to become the ultimate destination for companies looking to set up in Asia.
This article illustrate the key differences in Singapore’s and Hong Kong’s corporate structures. Let’s take a look.
- Banks in both regions are well experienced in conducting international business transactions.
- Both Singapore and Hong Kong have relatively high banking fees and minimums, with Hong Kong banks on steady increase over the last few years.
- In-person meetings are required by banks in both regions in order to open a business account.
Hong Kong used to be known for having a difficult bank account opening procedures (particularly in comparison to Singapore) for non-locals. Fortunately, there are now plenty of alternative providers that can meet the needs of traditional banks.
Company Secretary Requirements
On the company compliance side, there is one significant difference between Hong Kong and Singapore:
- Hong Kong: A board of directors can be completely made up of foreigners, but the company needs to have a local secretary.
- Singapore: A fully-foreign company requires a local director and a local company secretary to meet the legal requirement.
In this case, Hong Kong has a slight edge over Singapore for the potential savings of having a non-local board of directors.
Both regions have energetic and flourishing startup scenes
The Singapore government actively promotes and reward entrepreneurship. It also supports several VCs and matching the funds. It is comparatively easier to raise seed and angel rounds in Singapore than Hong Kong.
Hong Kong, in the meanwhile, are focused on growing its angel investors, as younger members of wealthy local families gain interest in diversifying their family’s investments portfolios. There are also increasing numbers of well-developed investment programs and funding for promising entrepreneurs is.
Aside from all the conditions listed above, it’s worth considering your target market within the Asian region, and where your customers will be based.
Singapore – “The gateway to Southeast Asia”
For decades, South East Asia has been trailing behind the global economy. But in recent years the region has gained tremendous momentum. More foreign investors paying close attention to the rise of wealthy middle class in countries like Thailand, Vietnam, and Cambodia. However, there is a lack of infrastructures in the systems, and these countries are inadequate in handling large amounts of foreign capital.
Hong Kong – “The gateway to China”
The best thing about Hong Kong is that it is situated right next to Mainland China. Being a SAR (Special Administrative Region), it enjoys a reasonable degree of autonomy especially when it comes to economic policies. This makes Hong Kong an ideal place to base your company at as you prepare to enter the elusive Greater Bay area and Mainland Chinese market. As your Hong Kong business matures, you can also use your HK company as the parent company in a WFOE (wholly foreign-owned entity) structure.
Work visas and relocation
It is reasonably easy to get a visa to work in Hong Kong. Visas can be granted for for startups that are accepted into a select list of incubator programmes. There is also an “Investment as Entrepreneurs” visa intended for foreign entrepreneurs who want to start a business and relocate to Hong Kong.
Relocation to Singapore is possible under many different work visas such as the Employment Pass or the Entrepreneur Pass. Salary requirements, your academic qualifications and employment history will all be taken into consideration as a part of the application process.
Whether you choose Hong Kong or Singapore, both are great options to set up your business. Interested in setting up your investment vehicle or regional base in Hong Kong? Talk to us today.