Multinational companies choosing Singapore over Hong Kong to set up Asia headquarters: Report

Source: Channel News Asia

SINGAPORE: More multinational companies are choosing Singapore over Hong Kong to set up their headquarters, a Bloomberg report found.

The report – published by Bloomberg Intelligence on Wednesday (Feb 21) – details Singapore’s rise in the competition for the title of Asia’s premier business destination.

It highlighted that Singapore hosted regional headquarters for 4,200 multinational firms in 2023, extending its lead over Hong Kong, which has 1,336.

Companies that set up headquarters in Singapore include Microsoft, Google, FedEx, Rolls-Royce and Mead Johnson. Other companies – such as online fashion retailer Shein and social media firm TikTok – also have business hubs here.

The report also noted that many Chinese companies looking to hedge geopolitical risks and broaden their reach choose Singapore.

“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 report said.

“Companies may rank Singapore higher in terms of political stability and freedom amid elevated geopolitical risks in the region.”

While Hong Kong positioned itself as China’s finance centre by containing political protests and adhering to the country’s COVID-zero policy during the pandemic, Singapore highlighted its independence and emerged as the preferred site for international business offices, it added.

The report also said that while Hong Kong has lower standard corporate tax rate of 16.5 per cent, there are Singapore programmes that can cut the state’s 17 per cent tax rate to 13.5 per cent or less for some activities.

In addition, Singapore has targeted incentives for foreign companies looking to set up regional hubs, an approach Bloomberg said is paying off.

Aside from companies that have set up headquarters in Singapore, several companies are also establishing or expanding operations here. This includes tech companies Alibaba and Huawei Technologies, as well as electric vehicle maker Nio.

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