Why are investors particularly interested in Hong Kong (China) company formation and Singapore company formation?
Singapore 
Updated on January 31 
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content
- 1. Geographical location and territory of Hong Kong and Singapore
- 2. Overview of the economies of Hong Kong and Singapore
- 3. Set up a company in Hong Kong or set up a company in Singapore
- 4. Why should you open a company in Singapore/Hong Kong with the support of GLA?
- 5. Frequently asked questions about company registration in Singapore and Hong Kong
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Hong Kong and Singapore are two of the world's leading financial centers, attracting many investors to establish companies and develop markets. With efforts to improve economic and financial quality (especially government incentives for newly established companies), Hong Kong and Singapore always make investors wonder which place to choose to establish a company?
Therefore, the following article of GLA will provide useful information to help your business easily decide between establishing a company in Hong Kong or establishing a company in Singapore. Through that, your business can consider and weigh the decision to choose to invest between the Hong Kong and Singapore markets to suit your business problem.
1. Geographical location and territory of Hong Kong and Singapore
| Factor | Hong Kong | Singapore |
| Geographical location | Located in the heart of Asia, in Southeast China (an important gateway between China and the world), it is convenient for trading with high-growth markets in the region. | Belonging to Southeast Asia (an island nation with advantages in international trade and commerce by sea and air). |
| Acreage | Hong Kong has an area of 1,106 km2 (1,5 times the area of Singapore). | Singapore has an area of 718 km2 (the smallest country in Southeast Asia). |
| Flight time from Vietnam | It takes about 03 - 10 hours to fly from Vietnam to Hong Kong (depending on departure location). Note: Vietnamese citizens need a visa to enter Hong Kong. | It takes about 02 - 04 hours to fly from Vietnam to Singapore (depending on departure location). Note: Vietnamese citizens do not need a visa to enter Singapore. |
2. Overview of the economies of Hong Kong and Singapore
| Factor | Hong Kong | Singapore |
| General characteristics of economy |
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| Legal system | The legal system is transparent and clear, based on English Common Law. With the establishment of the International Arbitration Centre in 1985, Hong Kong has become a major arbitration centre in Asia. Accordingly, dispute resolution by arbitration is now a popular method in Hong Kong. | Singapore's legal system is based on English Common Law. Singapore's legal system is clear and well-defined. As a result, Singapore is the only Asian country in the top 10 of the World Justice Project's Rule of Law Index 2016. |
| Hong Kong and Singapore are both considered to be two of the leading Asian regions and countries in terms of judicial systems. The transparency in the judicial systems of these two countries shows the openness of the government and is also one of the attractive factors to attract foreign investors. | ||
| Quality of labor resources | Abundant labor force. In 2018, the young labor force from 15 years old and above accounted for more than 61.2%. | Abundant workforce, of which Singaporeans with university degrees account for 54,6%. |
| Main language | Chinese | English |
3. Set up a company in Hong Kong or set up a company in Singapore
To better understand the differences, advantages and disadvantages when Established company in Hong Kong or Singapore company registration, Please see the table below:
| Factor | Hong Kong | Singapore |
| Singapore company type | When choosing to establish a company in Hong Kong, businesses can consider making appropriate decisions based on the following 04 types:
In particular, the private limited company is the type chosen by most investors, because the owner's liability will be limited to the company's assets, and their personal assets will be protected from the company's obligations and responsibilities. | When businesses want to expand their business operations in Singapore, they can choose from the following 03 types of businesses:
Among them, establishing a subsidiary in the form of a private limited liability company (PTE. LTD.) is the type chosen by many businesses when investing in the Singapore market. This type is considered flexible, has the ability to expand in scale and make the most of the government's incentives for businesses. |
| In addition, Enterprises can also consider establishing representative offices and branches in Hong Kong/Singapore. For more details on the process and procedures for establishing companies, branches, and representative offices in Hong Kong and Singapore, please contact GLA for direct consultation. | ||
| Procedures for establishing and maintaining a company | Fast, simple. | Fast, simple. Special: Your business does not need to be present in Singapore during the company establishment process. |
In addition, if a foreigner can own his/her own Hong Kong company, the Singapore company needs to have 1 nominee director who is a Singapore citizen to manage the company in Singapore. To maintain an effective foreign company, both Hong Kong and Singapore companies need to prepare financial statements - audited on a fiscal yearly basis. Refer to the following articles to know what types of reports Singapore/Hong Kong companies need to submit and how to prepare financial statements for each type of company:
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| Time of company establishment | 01 - 03 working weeks. | 02 - 03 working days. |
| Corporate income tax | In Hong Kong, corporate income tax will be classified by the Hong Kong government as follows: 1. For companies doing business in Hong Kong 1.1. For public companies (corporations)
1.2 For private companies (Unincorporated businesses)
Special: Hong Kong does not levy capital gains tax, shareholder dividends tax and goods and services tax (VAT). 2. For companies doing business outside Hong Kong, they will enjoy a preferential tax rate of 0%. Detailed information about the tax system in Hong Kong has been highlighted by GLA through the following articles, businesses can refer to more: | Corporate income tax common is 17%For newly established businesses In the first 03 years, businesses will receive tax incentives. The following:
The tax system in Singapore will change periodically and this requires businesses to update promptly to optimize profits. Therefore, update your tax knowledge now with outstanding contents such as: Note: Singapore company tax incentives for the first three years after incorporation may vary from financial year to financial year. |
| Personal income tax | In Hong Kong, personal income tax is progressive from 2% to 17%. | In Singapore, personal income tax is progressive, up to 22% of taxable income. In particular: dividends distributed to shareholders (after completing corporate income tax) will not be subject to personal income tax. |
| Time to open a bank account | Usually, common, normal, only 14 - 22 working days to own a corporate account in Hong Kong. However, currently, opening a bank account in Hong Kong - especially for a business with foreign directors/shareholders - is not easy. Because: Account holders need to be present in person at a Hong Kong bank to complete the account opening procedure. However, traveling from Vietnam to Hong Kong is quite difficult because Vietnamese citizens need a visa to go to Hong Kong. Special: In case your business cannot fly to Hong Kong to open an account or the account opening is unsuccessful, GLA will advise and support your business with the following two options:
Opening a bank account in Singapore for a Hong Kong company is a difficult step, requiring the consultant to be experienced, have a good understanding of procedures in Singapore and have a deep understanding of business operations to ensure that the documents and certificates are provided appropriately and in compliance with regulations. Note: The time to open a bank account in Singapore for a Hong Kong company will be longer than for a Singapore company. Currently, GLA is committed to the success rate in open bank account in singapore for Hong Kong companies up to 98%. To do this, GLA will accompany your business, carefully review information before receiving documents and inform customers in advance about the success rate. If a Hong Kong company cannot open a bank account in Singapore, GLA will advise on opening a reputable online payment account in Hong Kong or the US, suitable for the business and investment problems of the enterprise. | Asian financial center. Only 14 - 22 working days to own a business account in Singapore. Account holders must be physically present at a Singapore bank to complete the process. |
Considered the freest economy in the world, Vietnam - Hong Kong relations are developing well both bilaterally and multilaterally (both are members of APEC and WTO), following the general development of Vietnam - China relations.
On the other hand, with its central location in Asia, Singapore is extremely favorable for domestic and foreign investors to invest, do business and penetrate the Asian market in general as well as the potential ASEAN market.
Therefore, based on each business problem of each enterprise, business owners can choose Hong Kong or Singapore (or both) to invest and establish a company in the most appropriate and accurate way.
4. Why should you open a company in Singapore/Hong Kong with the support of GLA?
With many years of experience supporting many companies, from startups to Top 500 corporations in Vietnam, GLA is confident that it can:
- Consulting your business to choose a country to establish a company that suits your business problems
- Support your business with comprehensive services to operate a foreign company long-term - sustainably - legally (make financial reports - open international online payment accounts, register business phone numbers, etc.).
- Support your business in all issues arising when establishing a Singapore/Hong Kong company (update businesses with the latest government regulations, etc.).
5. Frequently asked questions about company registration in Singapore and Hong Kong
1.Can foreigners register a company in Singapore or Hong Kong?
Yes. Both Singapore and Hong Kong allow foreigners to set up companies in these two regions.
2. Can foreigners open a digital bank account in Singapore or Hong Kong?
Yes. Opening an account with digital banks is the most popular option, as the process of opening an account with traditional banks is often more complicated and difficult for foreigners.
3. How long does it take to register a company in Singapore and Hong Kong?
If you have all the documents ready, you can complete your company registration in about 15 minutes. However, in reality, it can take anywhere from 1–3 days to more than 2 weeks due to a number of factors such as:
- Pending approval or rejection of company name from competent authority.
- Require additional documents to verify information of shareholders, directors, secretaries, etc.
- Know Your Customer (KYC) process from service providers.
Highlights- Both Singapore and Hong Kong allow foreigners to open companies with very competitive support policies.
- Typically, many businesses choose to open a company in Singapore as a parent company, with the aim of expanding their business operations throughout Southeast Asia or internationally.
- Many businesses choose Hong Kong to open a company to optimize operating costs, but still ensure the company has high brand reputation.
- GLA will support businesses to establish companies in Singapore and Hong Kong legally, operate effectively and long-term, and meet the specific business needs of the company.
This article was published by GLA on 03/12/2020. Copyright and accompanying content are intellectual property of GLA. All rights reserved.
The guidance and content are for general information only and are not intended to provide specific guidance and advice on accounting, tax, legal or other professional advice. Readers should consult professional advisors on specific issues.
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