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Singapore vs Hong Kong For Business In 2025: Choosing the Ideal Hub for Your Expansion

Singapore vs Hong Kong

Choosing the right business hub is a critical decision for entrepreneurs and established companies alike. In Asia, Singapore and Hong Kong have long stood out as premier locations for businesses looking to expand their operations.

Both cities offer unique advantages, but understanding their differences—Singapore vs Hong Kong—is key to making an informed decision. This article explores the strengths and weaknesses of Singapore and Hong Kong across various factors, helping you decide which is the ideal base for your business.

Got a question about setting up in Singapore or Hong Kong? Contact us at InCorp today

Overview: Singapore and Hong Kong as Global Business Hubs

Singapore and Hong Kong have earned their reputations as leading business destinations thanks to their strategic locations, robust infrastructure, and pro-business environments. Ranked highly in global ease-of-doing-business indices, these cities act as gateways to major Asian markets, making them ideal for businesses seeking regional or global expansion.

Singapore’s strategic location in Southeast Asia positions it as a hub for ASEAN markets. At the same time, Hong Kong’s proximity to mainland China makes it a vital entry point for businesses targeting the world’s second-largest economy. Both cities boast world-class infrastructure, excellent connectivity, and strong legal frameworks, attracting investors worldwide.

Also Read: Foreigner’s Guide To Setting Up A Company In Hong Kong

Singapore vs Hong Kong: At a Glance

Factor Singapore Hong Kong
Corporate Tax Rate 17% 8.25% (first HKD 2 million), 16.5% above
Regulatory Environment Stringent compliance requirements Streamlined, efficient procedures
Funding & Investment Robust governmental support, thriving startup ecosystem Vibrant financial markets, major IPO centre, close China ties
Infrastructure & Connectivity Advanced infrastructure, excellent internet connectivity High-efficiency airport, major seaport, strategic access to China
Key Industries Diversified: manufacturing, financial services, biotech, fintech Finance-focused: banking, insurance, retail, and trade

Taxation: A Comparative Perspective

One of the key considerations for businesses choosing between Singapore and Hong Kong is taxation. Both cities offer attractive tax regimes, but there are notable differences.

Hong Kong operates on a two-tiered profit tax system, with an 8.25% tax rate on the first HKD 2 million of assessable profits and 16.5% on anything above. This structure is particularly appealing for smaller businesses looking to minimise their tax burdens. 

Additionally, Hong Kong’s territorial tax system ensures that only income sourced within the city is taxed, benefiting businesses with significant overseas operations. Furthermore, Hong Kong does not impose a Goods and Services Tax (GST), offering businesses relief from this type of indirect tax burden.

Singapore, on the other hand, applies a flat corporate tax rate of 17%. It offers significant incentives, including a 75% tax exemption on the first SGD 100,000 of income for startups during their first three years. 

However, Singapore imposes a GST at a rate of 8%, which businesses need to factor into their cost structures, especially if they operate in industries where GST cannot be passed on to customers. Despite this, the absence of capital gains and dividend taxes in Singapore enhances its attractiveness for investors.

The choice between the two tax systems ultimately depends on the nature and scope of your business operations and how each regime aligns with your financial and operational goals.

Also Read: Guide to Taxation and Accounting in Hong Kong

Industry-Specific Opportunities

Singapore and Hong Kong cater to diverse industries, but specific sectors thrive better in each city.

Singapore has emerged as a global leader in technology, biotechnology, and fintech, supported by initiatives like Smart Nation and generous R&D grants. This focus on innovation makes it a hotspot for startups and multinational corporations.

Conversely, Hong Kong excels in finance, trade, and logistics. Its proximity to mainland China makes it a strategic choice for businesses involved in cross-border trade. Regulatory bodies like the Companies Registry and Inland Revenue Department ensure streamlined processes, while the city’s status as a global IPO centre reinforces its financial strengths.

Additionally, Hong Kong boasts a vibrant arts and culture scene and a thriving creative industries sector, which are significant contributors to its economy and global appeal. From world-class art fairs like Art Basel Hong Kong to its rich cultural heritage and support for creative talent, Hong Kong offers a dynamic environment for businesses in these sectors. This focus on arts and creativity positions Hong Kong as a leading hub for culture and creative enterprises.

Also Read: Hong Kong Export Outlook 2025: Key Trends and Opportunities for Businesses

Cost and Quality of Living

Cost considerations play a vital role in business decisions. Singapore and Hong Kong are among the most expensive cities globally, but their cost structures vary.

Singapore’s well-developed infrastructure, superior internet connectivity, and smart technology adoption offset its high living costs for many businesses. Meanwhile, Hong Kong’s vibrant financial markets and strategic access to China often justify its higher commercial and residential rental expenses.

Entrepreneurial and Government Support

Both cities provide strong government support for businesses, but the nature of assistance differs, reflecting their unique economic priorities.

Singapore actively fosters startups through initiatives like Startup SG and Enterprise Singapore, offering grants, tax incentives, and incubator programs to support innovation and entrepreneurship. These efforts have positioned Singapore as a thriving hub for technology-driven startups and multinational companies.

Hong Kong, on the other hand, continues to enhance its entrepreneurial ecosystem with a wide range of initiatives outlined in its 2024 Policy Address. The government has introduced new measures to boost high-potential sectors, including artificial intelligence, green technology, and healthcare innovation, supported by funding programs like the HKD 10 billion Innovation and Technology Fund. Additionally, the SME Financing Guarantee Scheme remains a critical resource, providing financial support to small and medium enterprises.

Furthermore, Hong Kong places a strong emphasis on fostering collaboration between business and academia through programs such as the Research Talent Hub and the Co-Investment Fund, which encourage startups and tech ventures to leverage local expertise. These efforts complement its existing strengths in finance and trade, ensuring businesses in Hong Kong can access a combination of world-class infrastructure and policy-driven incentives.

Both cities offer entrepreneurs and businesses tailored government support, but the choice often hinges on the specific needs and industry focus of the company.

Also Read: The Hong Kong Startup Funding & Government Scheme Guide 

Future Trends and Economic Outlook

Both cities face opportunities and challenges in a shifting global landscape. Singapore’s emphasis on digital transformation and sustainability positions it for long-term growth in technology and green industries. In contrast, Hong Kong’s integration with the Greater Bay Area opens doors to one of the world’s most dynamic economic regions.

When deciding between Singapore and Hong Kong, businesses must consider these emerging trends alongside their own industry focus and operational needs.

Where To Next?

Deciding between Singapore and Hong Kong for business depends on your industry, operational needs, and long-term goals. Both cities offer compelling advantages, from Singapore’s innovative ecosystem to Hong Kong’s financial prowess.

For personalised advice on business setup in Singapore or Hong Kong, contact InCorp today. Our experts are ready to guide you through every step of the process, ensuring your business thrives in the best location for you.

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About the Author

Jan Chow

Jan Chow, an adept Business Development Manager, leverages a wealth of experience and strategic acumen to drive growth and foster client relationships. With a proven track record spanning over a decade, including four years with InCorp and ten years running her successful marketing agency, Jan excels in identifying opportunities and implementing effective strategies to propel business expansion. Jan's entrepreneurial background provides her with an intimate understanding of businesses' challenges and opportunities, motivating her to help clients overcome their pain points and achieve success. Her expertise and passion for assisting businesses are highly respected in the industry.

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