HONG KONG - The international business community is clear on where it wants to call home in Asia: Singapore.
The city-state hosted regional headquarters for 4,200 multinational firms in 2023, extending its lead and dwarfing the 1,336 found in Hong Kong, its main rival, according to a Bloomberg Intelligence report that details Singapore’s rise in the perennial battle to be known as Asia’s premier business destination.
Even many Chinese companies seeking to hedge geopolitical risks and broaden their reach pick Singapore over Hong Kong, the report found.
“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,” according to the 50-page report. “Companies may rank Singapore higher in terms of political stability and freedom amid elevated geopolitical risks in the region.”
Hong Kong codified its position as China’s finance centre by containing political protests and adhering to the country’s zero-Covid-19 policy during the pandemic, while Singapore highlighted its independence and emerged as the preferred site for international business offices, the report said.
Even Hong Kong’s lower standard corporate tax rate of 16.5 per cent may be bested by Singapore programmes that can cut its 17 per cent tax rate to 13.5 per cent or less for some activities, it found.
Singapore also has targeted incentives for foreign companies looking to set up regional hubs, an approach that is paying off.
A list of companies with regional headquarters in Singapore reads like a who’s who of multinationals: FedEx, Microsoft, Alphabet’s Google, Mead Johnson, Rolls-Royce and General Motors.
Companies that operate in more sensitive environments – such as TikTok and the online fashion giant Shein – have business hubs in Singapore. Chinese companies such as electric-vehicle maker Nio are established in the city-state, while tech companies including Huawei Technologies are expanding operations there.
The corporate critical mass and more diversified economy could help Singapore attract even more global business than Hong Kong for the next five years, the Bloomberg Intelligence report said. BLOOMBERG
