Hong Kong vs Singapore: Which Place Is Best for Businesses?

When deciding between Hong Kong and Singapore, entrepreneurs must weigh factors such as regulatory frameworks, tax regimes, infrastructure, and long-term market access. 

Both cities are world-class hubs, but each offers distinct advantages depending on your business goals.

Major Economic Factors of Singapore and Hong Kong

Hong Kong vs Singapore: Company Incorporation (2025)

Taxation Overview: Hong Kong vs Singapore

Foreign-sourced Income Exemption (Hong Kong)

Foreign-sourced Income Exemption is not automatic; exemption depends on substance (and for IP income, nexus) requirements.

Section 10L (Singapore)

S.10 is a new regime that can tax foreign-sourced disposal gains received in Singapore from 1 Jan 2024, where substance is inadequate or where gains are from foreign IPRs.

Labor, Talent, and Costs

Infrastructure and Connectivity

Legal Systems and IP

Both Hong Kong and Singapore operate under common law systems with independent judiciaries. They provide strong protections for intellectual property, covering trademarks, patents, and copyrights, and both are trusted venues for arbitration and court-based dispute resolution.

The key difference lies in positioning: Singapore is often viewed as more insulated from geopolitical risk, while Hong Kong offers unmatched access to the China market.

Quality of Life

Immigration and Hiring

Hong Kong

Useful routes include the Top Talent Pass Scheme (TTPS) and the standard Employment Visa. 

TTPS gives an initial stay of up to 36 months for top earners and graduates that meet set criteria, with extensions possible. Dependants may be eligible. 

Singapore

Key routes are the Employment Pass with the COMPASS points framework, plus the five-year Overseas Networks and Expertise Pass (ONE Pass) for senior achievers. 

COMPASS applies in addition to salary thresholds.

Banking and Foreign Exchange (FX)

Hong Kong

The Hong Kong dollar operates under the Linked Exchange Rate System against the US dollar, kept inside HK$ 7.75 to 7.85 per USD. 

Authorities have reaffirmed commitment to this system. 

Singapore

Monetary policy is set via the Singapore dollar nominal effective exchange rate (S$NEER), a managed float against a basket. 

Monetary Authority of Singapore (MAS) adjusts the slope, width and centre of the band to guide inflation. Recent decisions kept settings broadly steady after earlier easings.

Data Privacy and Cybersecurity

Hong Kong

The Personal Data (Privacy) Ordinance applies with six Data Protection Principles. 

Data breach notification is encouraged by the Privacy Commissioner but not mandated by statute today. 

Section 33 on cross-border transfers exists in the ordinance but has not commenced.

Singapore

The Personal Data Protection Act (PDPA) requires mandatory breach notification to the PDPC if there is likely significant harm or a significant scale incident, generally 500 or more affected individuals. 

Cross-border transfers require comparable protection.

Ongoing Compliance Calendar

Hong Kong

File the Annual Return for a private company within 42 days after each incorporation anniversary. 

Profits Tax e-filing is being phased in, with the first mandatory phase from YA 2025/26 and full implementation targeted later.

Singapore

File Annual Returns with ACRA within 7 months after FYE for most private companies. Corporate income tax returns (Form C-S/C-S Lite/C) are due 30 Nov each year by e-filing. 

XBRL financial statements are required for most companies.

Grants and Incentives

Hong Kong

The enhanced R&D super-deduction allows 300% deduction on the first HK$ 2 million of qualifying R&D and 200% thereafter. 

Also, the BUD Fund supports market expansion in Mainland China and FTA/IPPA partner markets, with a cumulative ceiling of HK$ 7 million per enterprise. 

Note: that the Technology Voucher Programme stopped accepting new applications after 31 Dec 2024.

Singapore

The Enterprise Innovation Scheme (EIS) offers enhanced tax deductions on qualifying R&D, IP and innovation projects, and a cash conversion option for up to SGD 100,000 of claims per year of assessment. 

Further, the Enterprise Development Grant (EDG) can co-fund qualifying project costs, with higher support levels for SMEs.

People Costs and Contributions

Hong Kong

Mandatory Provident Fund (MPF) mandatory contributions are 5% employer and 5% employee on relevant income, capped at HK$ 1,500 each per month. 

The MPF offsetting of severance and long-service payments was abolished effective 1 May 2025 for service after that date.

Singapore

CPF total contributions for citizens and PRs (from year 3) are up to 37% of wages for employees 55 and below, with tiered rates by age and scheduled adjustments.

Withholding Taxes and Treaty Use

Hong Kong

There is no withholding tax on dividends or interest. 

Royalties paid to non-residents are subject to deemed profits rules that result in effective rates unless reduced by treaty.

Singapore

Withholding tax generally applies to interest at 15% and royalties at 10% paid to non-residents unless a treaty provides a lower rate. 

Other categories can apply depending on the service and presence in Singapore.

ESG and Reporting

Hong Kong

Hong Kong Exchanges and Clearing Limited (HKEX) is introducing IFRS S2-aligned climate disclosures from financial years starting 1 Jan 2025, with Scope 1 and 2 mandatory for all issuers and phased relief for other items.

Singapore

Singapore Exchange (SGX) requires ISSB-aligned climate reporting beginning Fiscal Year (FY) 2025 for listed issuers, with timelines extended in Aug 2025 for some elements while keeping Scope 1 and 2 mandatory from FY2025.

Who Should Choose Which

Hong Kong

Hong Kong is best if you need proximity to Mainland China and the Greater Bay Area. 

It provides direct access to supply chains and cross-border routes.

The city also has no GST, which keeps operating costs simpler. 

For foreign-sourced dividends, interest, disposal gains, or IP income, you must satisfy the FSIE substance and nexus requirements to qualify for exemption.

Singapore

Singapore is ideal if you are building in tech, fintech, biotech, or green tech, where government grants and R&D incentives are strong. 

It offers a broad treaty network, a predictable legal environment, and stability through the resident-director requirement. 

Under Section 10L, foreign disposal gains brought into Singapore remain exempt if substance or carve-outs apply, but may be taxed otherwise.

Costs to Expect (Government Fees Only)

Hong Kong

• Incorporation (Companies Registry) fee is HK$1,545 if using electronic submission, and HK$1,720 for paper/hard-copy filing.
• Business Registration Certificate fee is HK$2,200 for a one-year certificate. There is also a three-year certificate option costing HK$6,020.

Note: Fees can vary depending on whether there is a levy (e.g. Protection of Wages on Insolvency Fund) or other statutory charges.

Singapore

• Government fees for incorporation via ACRA BizFile+ (name reservation and company registration) total S$315 (name application S$15 + incorporation S$300).
• Additional mandatory government-imposed compliance costs include the appointment of a resident company secretary (must be done within 6 months of incorporation) and having a local registered address. These are not part of the pure government fees but are required by law.

2025 Outlook

Hong Kong

The Government keeps 2025 real GDP growth at 2% to 3%. Q2 2025 expanded 3.1% year on year, supported by strong goods exports (including rush shipments tied to US tariff timing), robust services exports on inbound tourism, and vibrant financial services. 

Inflation is seen as modest with underlying 1.5% and headline 1.8% for 2025. Key risks include US tariff policy and the pace of US rate cuts, though Mainland demand remains a core driver. 

Singapore

The Ministry of Trade and Industry (MTI) upgraded 2025 GDP growth to 1.5% to 2.5% on 12 Aug 2025, after Q2 grew 4.4%. 

Growth is led by wholesale trade, manufacturing, finance and insurance, and transportation and storage, with some front-loading ahead of US tariffs. 

Also, the Monetary Authority of Singapore (MAS) guides core inflation at 1.0% to 2.0% for 2025. 

Singapore continues its innovation and sustainability push through RIE2025 and Green Economy Agreements, supporting medium-term competitiveness as external demand stabilizes.

Looking to register a business in Asia? Whether you choose Hong Kong or Singapore, Air Corporate can streamline the process from anywhere in the world.