Singapore gaining preference over Hong Kong among multinational corporations for business operations
Singapore has established itself as the leading business destination in Asia, a Bloomberg report found.
According to a detailed report by Bloomberg Intelligence, which delves into the ongoing competition between Singapore and Hong Kong for the title of Asia’s premier business destination, Singapore continues to outshine its rival. The report, published on Feb. 21, emphasizes Singapore’s dominance in hosting regional headquarters, with a remarkable 4,200 multinational firms choosing the city-state in 2023. This number significantly surpasses Hong Kong’s count of 1,336 multinational companies.
The list of companies that have their headquarters in Singapore includes Microsoft, Google, FedEx, Rolls-Royce and Mead Johnson. Additionally, online fashion retailer Shein and social media firm TikTok have also established their business in the country.
The report also highlights that many Chinese companies looking to hedge geopolitical risks and broaden their reach choose Singapore.
Nio Inc., a Chinese electric vehicle manufacturer, along with technology giants Alibaba and Huawei Technologies are expanding their operations in Singapore. Even state-owned enterprises are recognizing the appeal of Singapore, with examples like China Railway Materials establishing overseas headquarters in the city-state.
According to Bloomberg report, this unique combination positions Singapore to potentially attract even more global business than Hong Kong over the next five years.
A recent analysis by Global Finance Magazine showed that Singapore has surpassed Hong Kong in the wealth rankings, taking 3rd place against its opponent’s 12th place.
“Hong Kong has lost the race to be international business’ preferred choice for Asia headquarters, as more global and even Chinese companies choose Singapore because of its better relations with the West, broader talent pool, diversified economy, and tax incentives,” the report said.
Due to its attractive political stability and freedom amid heightened geopolitical risks in the region, Singapore is ranked higher by companies.
While Hong Kong solidified its role as China’s financial hub by effectively managing political demonstrations and adhering to the nation’s zero-COVID policy amid the pandemic, Singapore highlighted its independence and positioned itself as the favored location for global business offices, as outlined in the report.
The report highlighted a distinction in corporate tax rates, indicating that Hong Kong maintains a standard rate of 16.5%, whereas Singapore can lower its tax rate from 17% to 13.5% or even less for specific activities through certain programs.
Moreover, foreign companies interested in establishing a regional headquarters in Singapore can take advantage of the incentives that Singapore has introduced.
