Singapore and Hong Kong are old competitors in the battle for investments, top places in world’s economical rankings and the honour of “the best place on earth to do business.” Breathing down each other’s neck, they try to offer as much comfortable conditions for running business as it is really possible. Both countries boast unbelievably low taxes, extremely quick incorporation procedure and great infrastructure.
Entrepreneurs lured by tremendous opportunities are puzzling over a dilemma: Singapore or Hong Kong – which is better
and more business-friendly? There is no easy answer. To compare Hong Kong with Singapore
is the same as to compare a spoon with a fork. Both can be used for eating, but you choose the tool according to your menu. The location and “orientation” make these two economic maniacs different business destinations with different items in “all-inclusive” program. When Hong Kong’s business history is longer, Singapore shows smart and nimble business-learning talents. When Hong Kong orients on huge Chinese market, Singapore wins by sticking to more comfortable tax mode and lower cost of living. But let’s quit spending breath and look into every important part of Singapore vs Hong Kong competition and find where the youngest brother outstrips the elder one.
Singapore vs Hong Kong: taxes.
This is probably the first item entrepreneurs want to know before setting up a firm in any country. Singapore can boast its low corporate and personal taxes. Personal income tax is 3.5-20% for salaries higher than 320,000 SGD. In Hong Kong the rate is lower, but taxation starts from 120,000 HKD (20,000 SGD). Singaporean corporate tax is slightly higher (17%) than that of Hong Kong (16.5%), but Singapore practises tax exemptions which lower the corporate tax significantly. Singaporean government supports newly-setup private limited companies and let them enjoy their first 100,000 SGD tax-free (for profits gained during 3 consecutive years) and next 200,000 SGD with discount of 50%. Singaporean government pampers SME and introduces different taxes for every specific industry in order to lure more entrepreneurs to the country.
Singapore vs Hong Kong: ease of running a business.
In both countries time is valued, that’s why you can open a firm either in Singapore or Hong Kong within 3 working days. Both countries offer friendly taxes and provide comfortable visa regimes fighting for the leadership in this category. But according to World Bank’s report for 2014, Singapore proudly takes the first place. The champion also surpasses Hong Kong in international trading (#1), property registering (#14 vs #57 in HK) and insolvency solutions (#2 vs #16 in HK).
Singapore vs Hong Kong: location and transport.
Both Singapore and Hong Kong have very winning location in the very centre of Asia. Here your choice depends on your target market. Hong Kong perfectly reaches the Chinese one, but Singapore having its outstanding Changi Airport (renowned as “the best in the world”) and Singapore pass provide you visa-free entrance to about 70 countries. Plus Singapore is a home for the world’s most extensive and the busiest international port. As the most asked-for container port Singapore has also outstripped Hong Kong. You might consider this fact if your business depends on shipping operations.
Singapore vs Hong Kong: quality of life.
Singapore is the indisputable leader here. The country is famous for its cosmopolitan (cross-cultural) lifestyle; that’s why people who arrive here find the adaptation very easy. Western spirit is felt here and English is spoken everywhere, while Hong Kong is faithful to its old traditions, Chinese mentality and Mandarin language. Singapore wins more and more trust with its low rate of crime, low traffic, healthy food, and green environment. Hong Kong sticks to its native Chinese cuisine and eating out here is considered more expensive than in Singapore that loves combining both east and west tastes.
Singapore vs Hong Kong: air quality.
In this battle wins Singapore: in 2010, its air was 93% good. In the same time the problem of Chinese (and Hong Kong’s) pollution that causes serious health issues is kept discussed in the whole world.
Singapore vs Hong Kong: cost of living.
Singaporean accommodation options are more versatile (meeting different needs and styles) and pocket-friendly that those of Hong Kong.
The last cost almost as much as apartments in New York and other huge metropolises. The question who is more expensive – Singapore or Hong Kong
– isn’t easy because the cost of living is quite relative stuff, and greatly depends on person’s needs.
Singapore vs Hong Kong: salaries.
This item dramatically impacts your choice of destination. The report of ECA International that had studied living conditions in world’s biggest cities revealed that Singaporean expats earned more than their fellows from Hong Kong.
Singapore vs Hong Kong: local workforce.
Both countries have cherished a generation of top-notch intelligent and highly skilled labour force geared towards effective business. Considering Singapore vs Hong Kong for business
, you might not want to have communication issues. Hong Kong-based labour force is basically Mandarin-(or Cantonese-)speaking and more expensive; while Singapore-based is increasingly English-speaking, well grounded in technologies and more affordable. That’s why Singapore attracts more and more “brains” and investors from all over the world.
Singapore vs Hong Kong: political climate.
Singapore is renowned as second Asia’s most stable country. Hong Kong is the 3rd
. As money loves silence, Singapore wins more and more credits from international investors by its low corruption, transparency, market-friendly laws. Despite Hong Kong is a separate administrative part of PRC with its own economic, political and law course, the recent strike in September 2014 revealed that not all is perfect: China tried to control the elections in Hong Kong.
Singapore vs Hong Kong: economy.
Singapore can boast not only its higher GDP of US$55,182 (US$38,124 in Hong Kong), but also its exports (electronics and machinery), tourism, low inflation, and high government profits. Despite Hong Kong owns much more modest GDP vs Singapore, it still is known for its low corruption, soft policy in outward and inward investments, free trade traditions, strong banking and legal system and absence of restrictions on foreign assets and exchange.
Singapore vs Hong Kong: legal landscape.
Both countries have strict regulations of doing a business, and supremacy of law guarantees efficient and sound entrepreneurship. Singaporean government protects intellectual property and labour force and controls e-commerce, immigration to Singapore and salaries providing impartial legal proceedings. Legal system of Hong Kong adopted English common law and is separated from China’s legal system. In both countries you can expect incredibly low crime rates which mean more silence for your money.
Singapore vs Hong Kong: infrastructure.
Both countries are highly innovative and maintain the breakneck speed of technology development. Infrastructure is being updated all the time to meet expanding business ambitions. Hong Kong vs. Singapore transport service battle sees no victors and the vanquished. However, in the internet battle, Singapore takes the lead: broadband connection is serviced at 99.9% of apartments compared with 98% in Hong Kong.
Despite both Singapore and Hong Kong are highly competitive in technology, tax, legal and economy spheres, Hong Kong drops behind in many other important categories: it hardly speaks English, has higher cost of living and unaffordable prices for qualified labour force. Add to these awful ecological issues and China’s claims on free elections, and you mightn’t see you business in Hong Kong as shiny as before. In the same time, Singapore invents new tax incentives to consolidate its status of business magnet.