Introduction
For decades, Hong Kong has been one of Asia’s premier business hubs. However, in recent years, shifting economic conditions, political changes, and rising operational costs have led many Hong Kong entrepreneurs and investors to explore alternatives for international expansion.
Among all options, Singapore stands out as the most logical and attractive destination. Both cities share many similarities—low taxes, a strong rule of law, and open economies—but Singapore offers added stability, neutrality, and global connectivity that make it particularly appealing today.
This article explores why Hong Kong residents should set up a company in Singapore, covering the key advantages, tax benefits, and strategic opportunities that make Singapore the perfect base for regional and global business growth.
1. Stable Political and Economic Environment
One of the top reasons Hong Kong residents are increasingly turning to Singapore is its political stability and consistent policy environment.
Singapore has maintained a reputation for neutral governance, low corruption, and transparent decision-making, supported by clear laws that protect investors and businesses. The government is highly pro-business and maintains long-term policies that encourage entrepreneurship, foreign investment, and innovation.
For Hong Kong business owners who value certainty and security, Singapore provides a stable and predictable base to operate internationally, free from political or policy volatility.
2. Strategic Geographic Location and Global Connectivity
Singapore is located at the heart of Southeast Asia, serving as a gateway to ASEAN’s 650 million consumers and beyond. It sits along major global shipping and air routes, linking the East and West seamlessly.
From Singapore, companies can efficiently access major markets such as China, India, Indonesia, Vietnam, and Malaysia, as well as trade routes across Europe and the Middle East.
The country’s world-class logistics infrastructure—including Changi Airport and the Port of Singapore, one of the busiest in the world—ensures that goods, services, and people move efficiently across borders.
This strategic positioning makes Singapore the ideal base for Hong Kong entrepreneurs seeking to diversify into new markets and manage regional operations.
3. Business-Friendly Environment and Ease of Incorporation
Singapore is consistently ranked among the top countries globally for ease of doing business. The Accounting and Corporate Regulatory Authority (ACRA) has streamlined company registration procedures, allowing most businesses to be incorporated within one to two working days.
Foreigners, including Hong Kong residents, can own 100% of their Singapore company, with no requirement for a local partner.
Incorporation only requires:
- One shareholder (individual or corporate)
- One resident director (can be fulfilled via nominee director services)
- A local registered address
- A company secretary (appointed within six months)
These minimal barriers to entry, combined with digital filing systems and transparent regulations, make Singapore’s incorporation process one of the smoothest in the world.
4. Low and Competitive Corporate Tax System
Taxation is a key consideration for entrepreneurs choosing where to incorporate—and Singapore’s tax regime is among the best globally.
Here’s why:
- Corporate tax rate capped at 17%, with effective rates often lower due to exemptions.
- Full tax exemption for new startups on the first S$100,000 of chargeable income for the first three years.
- No capital gains tax.
- No dividend withholding tax.
- Territorial tax system – foreign-sourced income is not taxed if not remitted into Singapore.
For Hong Kong residents already accustomed to a low-tax environment, Singapore offers comparable rates but with the added benefit of stronger international credibility, especially for global banking, investments, and compliance.
5. Double Taxation Agreement (DTA) Between Singapore and Hong Kong
Singapore and Hong Kong signed a Comprehensive Avoidance of Double Taxation Agreement (DTA) in 2003.
This treaty ensures that income earned in one jurisdiction is not taxed twice when repatriated to the other. It also provides reduced tax rates for cross-border dividends, interest, and royalties, while clarifying tax residency rules.
This DTA makes it convenient for Hong Kong-based businesses with Singapore operations to manage their finances efficiently without facing tax overlap—an important benefit for those expanding regionally.
6. Strong Legal Framework and Rule of Law
Singapore’s legal system, based on English common law, is well-respected for its independence and fairness. Contracts and commercial disputes are handled efficiently, and the country ranks among the top jurisdictions globally for enforcement of contracts.
For Hong Kong business owners, this offers familiarity and security. Both jurisdictions share similar legal traditions, meaning entrepreneurs can confidently navigate Singapore’s legal and commercial environment with ease.
The strong rule of law also extends to intellectual property protection, ensuring that innovations, brands, and technologies are well safeguarded under the Intellectual Property Office of Singapore (IPOS).
7. Global Financial and Banking Hub
Singapore is a top-tier financial center with more than 200 international banks operating locally. The Monetary Authority of Singapore (MAS) ensures strict regulatory oversight while fostering financial innovation through fintech initiatives and digital banking.
For Hong Kong entrepreneurs, this means:
- Access to multi-currency corporate accounts
- Efficient cross-border banking and trade financing
- Stability of the Singapore Dollar (SGD)
- Compliance with global standards such as FATF and OECD regulations
Many Hong Kong-based banks also operate in Singapore, making it easy to open accounts and transfer funds between entities. This seamless integration supports regional expansion and diversification.
8. Skilled, Bilingual, and Multicultural Workforce
Singapore’s workforce is highly skilled, English-speaking, and multicultural—an ideal combination for international businesses.
English is the main language of business, while Mandarin is widely spoken, allowing easy communication with Chinese partners and regional clients. This linguistic advantage makes Singapore particularly appealing for Hong Kong business owners accustomed to bilingual operations.
The government also issues Employment Passes (EP) and EntrePasses for foreign entrepreneurs, enabling Hong Kong residents to live and manage their businesses locally without difficulty.
9. Access to Government Support and Incentives
Singapore’s government actively supports business development through generous grants and assistance schemes.
Some popular programs include:
- Enterprise Development Grant (EDG): Supports business innovation, transformation, and internationalization.
- Market Readiness Assistance (MRA) Grant: Helps Singapore-based companies expand overseas.
- Startup SG: Provides funding, mentorship, and accelerator programs for new ventures.
Foreign-owned companies incorporated in Singapore are eligible for many of these schemes, provided they contribute to Singapore’s economy. This government support helps new businesses scale faster and operate cost-effectively.
10. Free Trade Agreements (FTAs) and Global Connectivity
Singapore has one of the world’s largest networks of Free Trade Agreements (FTAs), with over 60 global partners.
This includes agreements with ASEAN, China, the European Union, Japan, Australia, and the United States.
In contrast, Hong Kong’s trade access is primarily tied to Mainland China. By incorporating in Singapore, Hong Kong entrepreneurs gain broader access to international markets, reduced tariffs, and simplified customs processes—critical advantages for global trade.
11. Comparison Between Singapore and Hong Kong
| Factor | Singapore | Hong Kong |
|---|---|---|
| Corporate Tax Rate | 17% | 16.5% |
| Capital Gains Tax | None | None |
| Dividend Tax | None | None |
| Territorial Tax System | Yes | Yes |
| Political Stability | Very High | Moderate |
| Legal System | English Common Law | English Common Law |
| Double Tax Agreement | Yes | Yes |
| Free-Trade Agreements | 60+ | 8 |
| Incorporation Time | 1–2 days | 5–7 days |
| Global Perception | Neutral, Trusted | Increasingly Tied to Mainland China |
While both are low-tax, business-friendly economies, Singapore’s neutrality, broader trade network, and global reputation make it a superior long-term base for international operations.
12. Strong Intellectual Property and Data Protection Standards
Singapore’s IP and data protection laws are globally recognized for their robustness.
The Personal Data Protection Act (PDPA) and Intellectual Property Office of Singapore (IPOS) provide strong safeguards for sensitive business information and innovations.
For Hong Kong startups in fintech, e-commerce, or digital services, this legal protection is crucial for building trust with global clients and partners.
13. Innovation, Technology, and Startup Ecosystem
Singapore is one of Asia’s leading innovation hubs. The government invests heavily in technology, research, and development across industries such as AI, biotechnology, renewable energy, and smart cities.
For Hong Kong entrepreneurs, particularly in tech and finance, Singapore’s ecosystem offers opportunities to connect with venture capitalists, accelerators, and multinational partners.
The city’s numerous innovation districts, such as one-north and JTC LaunchPad, foster collaboration and provide infrastructure for startups to scale regionally.
14. High Quality of Life and International Community
Beyond business advantages, Singapore provides an exceptional quality of life that attracts expatriates and entrepreneurs from all over the world.
The city is clean, efficient, and safe, with world-class healthcare, education, and housing. English is widely spoken, and there’s a significant Chinese-speaking community, making the cultural transition smooth for Hong Kong residents.
Singapore also offers excellent connectivity to global destinations, with direct flights to Hong Kong, Taipei, and other Asian cities.
15. Neutral and Globally Trusted Reputation
Singapore’s neutral diplomatic stance and reputation as a trusted international jurisdiction give it an edge as a global business base.
Unlike many countries, Singapore maintains strong relationships with both the East and West. This allows companies incorporated here to trade freely without political complications or reputational risk.
For Hong Kong entrepreneurs navigating complex geopolitical realities, Singapore’s neutrality offers a safe and respected platform to expand globally.
16. Simple Incorporation Steps for Hong Kong Entrepreneurs
The process of incorporating in Singapore is simple and efficient:
- Choose a company name (approved by ACRA).
- Prepare incorporation documents (ID, address proof, shareholding structure).
- Appoint a resident director (via nominee service if needed).
- Register the company online through ACRA (approval within 24–48 hours).
- Open a corporate bank account with a Singapore or international bank.
- Appoint a company secretary within six months.
- File annual returns and maintain proper accounting records.
Professional corporate service firms in Singapore can handle the entire process remotely for Hong Kong clients.
17. Emerging Opportunities for Hong Kong Entrepreneurs in Singapore
Many Hong Kong-based industries are finding new opportunities by expanding into Singapore, including:
- Finance and Fintech: Access to global investors and digital banking infrastructure.
- Trading and Logistics: Using Singapore as an ASEAN distribution base.
- Technology and Startups: Leveraging grants and innovation ecosystems.
- Professional Services: Establishing international consulting and legal networks.
Singapore’s open economy and regional influence make it the perfect launchpad for Hong Kong businesses seeking growth beyond their local market.
Conclusion
For Hong Kong residents and entrepreneurs, setting up a company in Singapore offers long-term strategic, financial, and operational advantages.
From its stable political environment and low taxes to its international trade network and trusted global reputation, Singapore provides a business ecosystem that encourages innovation and growth.
Incorporating in Singapore allows Hong Kong companies to diversify risk, strengthen global credibility, and tap into the massive opportunities within Asia-Pacific and beyond.
For a seamless experience, consider engaging a Singapore corporate services provider to manage incorporation, compliance, and accounting—so you can focus on growing your business confidently in one of the world’s most trusted financial hubs.