22-2-2024 (SINGAPORE) Singapore has firmly established itself as the preferred hub for the international business community in Asia, hosting regional headquarters for 4,200 multinational firms in 2023, according to a Bloomberg Intelligence report. This figure significantly surpasses Hong Kong, its main rival, which accommodated 1,336 multinational firms during the same period. The report highlights Singapore’s growing prominence in the perennial competition to be recognised as Asia’s premier business destination.
The study reveals that even Chinese companies, seeking to mitigate geopolitical risks and expand their global reach, are choosing Singapore over Hong Kong. The city-state’s advantages include better relations with the West, a more extensive talent pool, a diversified economy, and attractive tax incentives. The report, spanning 50 pages, notes that companies value Singapore for its political stability, freedom, and strategic location amid heightened geopolitical uncertainties in the region.
While Hong Kong has positioned itself as China’s financial hub by managing political protests and adhering to the country’s Covid-Zero policy, Singapore has emerged as the preferred location for international business offices. The report suggests that Singapore’s targeted incentives for foreign companies establishing regional hubs have played a crucial role in its success.
A notable list of companies with regional headquarters in Singapore includes major multinational players such as FedEx Corp, Microsoft Corp, Alphabet Inc’s Google, Mead Johnson, Rolls-Royce, and General Motors Co. Even companies operating in more sensitive environments, such as TikTok Inc and online fashion giant Shein, have chosen Singapore as their business hub. Chinese companies like electric-vehicle maker Nio Inc, as well as tech giants Alibaba Group Holding Ltd and Huawei Technologies Co, are expanding their operations in the city-state. State-owned enterprises like China Railway Materials have also established overseas headquarters in Singapore.
Despite Hong Kong’s lower standard corporate tax rate of 16.5%, the report highlights that Singapore’s programmes, which can reduce its 17% tax rate to 13.5% or less for certain activities, make it an attractive choice for multinational firms.
The report concludes that Singapore’s corporate critical mass and diversified economy position it to attract even more global business than Hong Kong in the next five years.
