Deciding between Singapore vs Hong Kong for business is one of the most important choices you will make. Against the backdrop of growing global competition, there are many places in the world that offer attractive deals, and both Hong Kong and Singapore have maintained their prominence for businesses seeking an entry point into Asia. Both have earned a reputation as major financial centres because of their favourable business policies, active legal systems, advanced infrastructure, and overall development.
While Hong Kong and Singapore are known globally and rank prominently in the business index, they also offer distinct value propositions. In this guide and analysis, both Hong Kong and Singapore are measured in terms of their economic landscape, taxation, ease of doing business, infrastructure, human capital, and more. This comparison is useful for newer startups and established SMEs looking to strategically plan business priorities and make critical location decisions.
Introducing Hong Kong and Singapore: Two Business Hubs of Asia
Aside from the many business opportunities in Asia, Singapore and Hong Kong stand out as major areas of operations. These city-states have received international acclaim for fostering a regional economy due to having open economies and stable governance, along with highly accessible global trade. These two regions are often ranked among the best in the world for business and investment, not only for the ease of operating but also due to advancement in innovations.
Despite their similarities, the question of Singapore vs Hong Kong is more nuanced than meets the eye. There are pros and cons to each, and these depend on individual needs and objectives. Hong Kong is favoured by those seeking industrial access, while Singapore suffices for trade preferences. Singapore’s political and administrative stability and Hong Kong’s strategic location, which has direct access to the mainland China market, mean different things to different people.
Choosing the right city for your operational needs, industry, and target growth is paramount to your success.
Doing Business in Hong Kong vs Singapore: A Comparison
Economic Landscape
Hong Kong:
The Hong Kong economy is fundamentally service-driven, with the services sector contributing over 93% of its GDP. In 2024, the region’s GDP reached approximately USD 386 billion, a 2.5% increase from the previous year—a testament to its post-pandemic recovery and resilient financial ecosystem.
As a Special Administrative Region of mainland China, Hong Kong operates as a unique bridge to the mainland market, offering businesses privileged access to one of the world’s largest consumer bases. Its position at the crossroads of global trade also enhances its role as a strategic gateway for companies looking to establish a footprint in the broader Asia-Pacific region.
Singapore:
Unlike Hong Kong’s heavy reliance on services, Singapore boasts a more diversified economy. It’s a leader in advanced manufacturing, fintech, biotechnology, and digital innovation. Thanks to Singapore's strategic location in the heart of Southeast Asia and easy access to North and East Asia markets, Singapore functions as a logistical and financial hub for regional and international businesses, supported by free trade agreements and global connectivity.
Business Friendliness
Hong Kong:
Hong Kong is widely celebrated for its free-market principles and minimal government interference in commerce for Hong Kong companies. Setting up a business and corporate bank account is generally fast and transparent, with a digital-first approach that enables online registration and access to key government services.
Its efficient judiciary and clear legal frameworks provide a level of certainty that appeals to entrepreneurs and international investors. These features have helped Hong Kong rank among the top economies globally in terms of business freedom and competitive market practices.
Singapore:
Singapore frequently tops global indices for ease of doing business, and it’s easy to see why. The city-state provides comprehensive government support in the form of startup grants, innovation funding, and digitalisation incentives. In addition, its regulatory processes are renowned for their efficiency and clarity. The government actively collaborates with the private sector to create a pro-enterprise environment, which reduces bureaucratic delays and encourages rapid scaling.
Taxation
Hong Kong:
Hong Kong's tax incentives include simple, highly competitive tax rates. The two-tiered profits tax system means companies pay just 8.25% on their first HKD 2 million in profits, with a standard rate of 16.5% beyond that. Notably, there’s no VAT, capital gains tax, or withholding tax on dividends, making it particularly attractive for investors and holding companies. This favourable structure allows businesses to retain more of their profits for reinvestment or growth.
Singapore:
Singapore imposes a flat corporate tax rate of 17%, but the real draw lies in its generous tax incentive schemes. Singapore has a great startup tax exemption scheme, offering partial tax exemptions on chargeable income for the first three years, significantly easing the financial burden during the early growth phase. The city’s network of over 90 double taxation agreements also facilitates smoother international trade and investment.
Banking and Infrastructure
Hong Kong:
Hong Kong’s financial prowess makes it one of the world’s premier financial centres, with a deep pool of international banks and institutions providing global financial services to open a corporate bank account. Hong Kong's integration into world-class transport, logistics, and communication systems supports fast-moving trade operations and cross-border financial flows.
However, new Hong Kong companies should be prepared for potentially strict regulatory scrutiny during account opening and ongoing operations due to enhanced compliance measures.
Singapore:
Singapore’s financial services sector is renowned for its resilience, transparency, and adoption of cutting-edge fintech solutions. The city is at the forefront of digital banking in Asia, with many institutions offering seamless digital onboarding. Singapore is known for world-class infrastructure like its Changi Airport and Port of Singapore, which rank among the best globally, ensuring efficient movement of goods and people. This makes it ideal for businesses involved in trade, cross-border e-commerce, and regional headquarters operations.
Talent Availability and Quality of Life
Hong Kong:
Hong Kong boasts a skilled and globally-minded talent pool, particularly in finance, law, and professional services. Hong Kong's proximity to mainland China ensures it attracts expats and professionals from around the world due to its international outlook and business culture. While salaries are competitive, the high cost of housing and living can be a barrier for startups with tight budgets. Still, its urban energy and fast-paced environment ensure that Hong Kong remains appealing to many entrepreneurs.
Singapore:
Singapore places a strong emphasis on education, upskilling, and workforce readiness. It’s home to a multilingual and tech-savvy population and supported by forward-looking government initiatives that encourage innovation and digital transformation. The country’s high quality of life, reliable public services, and safety make it particularly appealing.
Business Account Setup
Hong Kong:
Opening a business account in Hong Kong offers a fairly structured process, though recent regulatory changes mean stricter Know Your Customer (KYC) checks and documentation requirements. Traditional financial institutions may take several weeks to approve and activate accounts, especially for foreign-owned entities. This can slow down business onboarding if not planned in advance.
Singapore:
Singapore’s business account setup process is significantly more streamlined. Many financial institutions and fintech companies offer remote account opening and digital onboarding, helping new businesses start operations faster.
How Aspire Supports Businesses in Singapore and Hong Kong
Whether you choose Hong Kong or Singapore as your main business location, you can trust Aspire to help scale your business from day one.
With Aspire, you can open a Business Account with no account opening fees, minimum balance, or initial deposit requirements. Enjoy multi-currency collection accounts in major currencies such as HKD, USD, and EUR, allowing you to send and receive payments without incurring conversion fees.
Aspire also enables you to make global payments in over 30 currencies across more than 130 countries, all with low, transparent fees. Plus, with Aspire’s Expense Management solution, you can streamline your budgeting process, gain full visibility into your real-time spending, and avoid overspending.
Aspire’s solutions are tailored to the needs of startups and SMEs, helping you spend less time on administrative tasks and more time growing your business. Ready to streamline your operations in Singapore or Hong Kong? Open an Aspire Business Account today and take the first step.
Frequently Asked Questions
What are the main differences between doing business in Singapore and Hong Kong?
Both Singapore and Hong Kong are highly regarded for their pro-business environments, but they cater to slightly different business needs.
Singapore stands out for its strong government backing, with grants, startup schemes, and tax incentives that foster innovation and support early-stage companies. In contrast, Hong Kong’s strength lies in its low and simple tax regime and strategic access to the Chinese market, making it a preferred choice for businesses focused on trade, logistics, or regional expansion in mainland China.
Which city has a more favourable tax regime for businesses?
Hong Kong boasts a two-tiered tax system that allows smaller businesses to benefit from a lower initial rate, making it particularly attractive for SMEs. There’s also no capital gains tax or tax on dividends, which can enhance profit retention.
Singapore, on the other hand, has a more territorial tax system and offers a flat corporate tax rate of 17%, but this is offset by generous tax exemptions for startups and incentives for innovation.
How easy is it to set up a business in Singapore and Hong Kong?
Both Hong Kong and Singapore are known for their streamlined company registration processes. Singapore offers one of the world’s most digitised systems via ACRA’s BizFile+ platform in Southeast Asia, allowing for fast and paperless incorporation. Hong Kong also provides efficient online registration through its Companies Registry, although some additional steps, like opening a Business Account, may take longer due to regulatory checks.
Can foreign entrepreneurs fully own a business in these cities?
Yes, both Singapore and Hong Kong offer 100% foreign ownership of companies, even for small businesses or startups. This level of openness eliminates the need for a local partner or sponsor, giving entrepreneurs full control over their business operations and decision-making. It’s one of the key reasons Hong Kong and Singapore rank highly on the business index for international business setup and investor confidence.
What industries thrive in Singapore and Hong Kong?
Singapore is particularly strong in technology, fintech, biotechnology, and advanced manufacturing, and it is supported by government-led innovation initiatives and research grants. Hong Kong offers strong government support and thrives in finance, international trade, logistics, and professional services thanks to its free-market economy, world-class infrastructure, and proximity to mainland China’s vast economy.
Frequently Asked Questions
