SINGAPORE: A Bloomberg Intelligence report published on Wednesday (Feb 21) has shown that Singapore has taken its place as the premier business destination in Asia, with many firms, including those from China, expressing a preference for Singapore over Hong Kong.
As of 2023, the headquarters of 4,200 multinational firms can be found in Singapore, versus the 1,336 in Hong Kong. The two cities have a long-standing rivalry as the regional finance centre.
Included among the companies headquartered regionally in Singapore are global heavy-hitters such as Google, General Motors, Mead Johnson, Rolls Royce, FedEx, and Microsoft.
Even the most popular social media app in the world, TikTok, as well as fashion retail giant Shein, also have offices in the Little Red Dot.
China’s Nio, a manufacturer of electric vehicles, also has a presence in Singapore, as do tech bigwigs Alibaba and Huawei, which are even expanding operations, the Bloomberg report noted.
An analysis from December 2023 by Global Finance Magazine showed that Singapore has surpassed Hong Kong in wealth rankings, demonstrating that country size doesn’t dictate wealth.
“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,” the Bloomberg Intelligence report says.
Moreover, “companies may rank Singapore higher in terms of political stability and freedom amid elevated geopolitical risks in the region,” it added.
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While Hong Kong’s standard corporate tax rate of 16.5 per cent is lower than that of Singapore, the latter city has schemes allowing for its 17 per cent tax rate to be lowered to 13.5 per cent or even less in certain cases.
Moreover, foreign companies showing an interest in setting up a regional hub in Singapore may also avail of other incentives.
Last October, ANZ Group Holdings Ltd Chief Executive Officer Shayne Elliott noted how Singapore is besting Hong Kong in a significant shift in business activity.
Yahoo Finance reported Mr Elliot saying that more and more of his clients have chosen to invest their regional treasury capabilities in Singapore.
“There has been a migration toward Singapore, there’s no doubt about that. That’s also true of financial institutions. The data is clear, more financial markets capability, money center capability, Singapore has been a relative winner over that period of time,” he said. /TISG
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