Entrepreneurs looking to set up a business in Asia often waver between Hong Kong and Singapore—two of the Four Asian Tigers, which provide launchpads into Asia’s booming markets, like China and India. Offering low tax rates, stable governance, and a vibrant hub for global talent, all underpinned by the commonality of English as an official language, both cities draw in new ventures with their business-friendly environment.

With the similarities between the two countries’ ecosystems, how should you decide on the country to incorporate your business in? Let’s delve into the differences in the business registration process and requirements for Hong Kong versus Singapore.

1. Business Banking

Whether you’re setting up a business in Hong Kong or Singapore, a corporate bank account is fundamental for your company’s finances. With the global tightening of compliance regulations to prevent money laundering and other illicit activities, the account opening process has grown more stringent. Particularly in Hong Kong, the rigorous due diligence process has made it more challenging to open a bank account compared to the relatively more streamlined process in Singapore.

However, for entrepreneurs from certain countries, including China, Cambodia, Cyprus, Turkey, and Vanuatu, Singapore’s recent crackdown on money laundering means a potentially longer wait time and closer scrutiny during the bank account application process. Besides these considerations, the respective requirements that your business will need to fulfil also vary for both countries as follows:

Understanding the challenges of navigating these complexities without the relevant knowledge and expertise, Segovia offers accounting and banking services to streamline your application process. With our deep understanding of diverse jurisdictions, including Singapore and Hong Kong, partnering with us ensures compliance and efficiency, enabling you to start your business abroad confidently.

2. Company Incorporation Requirements

In terms of company incorporation, another distinction between Hong Kong versus Singapore is the team structure:

• Singapore: It is mandated that all foreign-owned businesses have both a local director and a local company secretary.
• Hong Kong: All appointed directors can be foreigners, but you must appoint a local company secretary.

This difference may give Hong Kong an edge over Singapore. However, irrespective of where your business registration eventually takes place, appointing these key personnel will not be a concern when partnering with Segovia.

As a corporate secretary provider in Singapore and Hong Kong, we ensure your company’s administrative and compliance needs are managed seamlessly. Meanwhile, our nominee directorship services connect your company with experienced individuals, enabling you to gain guidance and support to streamline your business setup and operation.

3. Incentives and Fundraising

When it comes to incentives for foreign investors, Hong Kong and Singapore differ in their focus. In the case of Singapore, while its headline corporate tax rate is slightly higher at 17% compared to Hong Kong’s 16.5%, Singapore’s extensive tax exemptions and incentives can significantly reduce the effective tax rate. This could result in more substantial tax savings, which are further bolstered by sector-specific tax incentives aimed at attracting international businesses across diverse industries.

Another example is the PTIS (Philanthropic Tax Incentive Scheme). This initiative allows qualifying donors, endorsed by their family offices registered in Singapore, to claim a full tax deduction capped at 40% of their statutory income—for approved overseas donations made via designated local intermediaries. Meanwhile, in Hong Kong, foreign investors have the advantage of tax exemption on offshore profits, which can be a significant boon for international business operations.

4. Target Market of Hong Kong vs Singapore

If your business is focused on penetrating the China market, Hong Kong serves as your launchpad. As your operations grow, the country also offers the strategic option for you to leverage your Hong Kong business as the holding company in a Wholly Foreign-Owned Entity (WFOE) setup. This consequently facilitates smoother expansion into Chinese territories. Meanwhile, Singapore offers an advantageous staging ground for entrepreneurs looking to tap into the rapidly growing Southeast Asian market.

Navigating Business Registration with Segovia

Ultimately, both countries offer distinctive advantages, and the right option depends on your business objectives. Regardless of the jurisdiction you are looking to commence your operations in, Segovia’s seasoned professionals are on hand to offer comprehensive support via our Hong Kong and Singapore incorporation services, ensuring alignment with your strategic objectives. Curious to learn more? Speak to us today, and let us work with you to determine the best course of action for your business vision and goals.