Saturday 13 Apr 2024
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(Feb 22): The international business community is clear on where it wants to call home in Asia: Singapore. 

The city state hosted regional headquarters for 4,200 multinational firms in 2023, extending its lead and dwarfing the 1,336 found in Hong Kong, its main rival, according to a Bloomberg Intelligence report that details Singapore’s rise in the perennial battle to be known as Asia’s premier business destination. Even many Chinese companies seeking to hedge geopolitical risks and broaden their reach pick Singapore over Hong Kong, the report found. 

“Hong Kong has lost the race to be international business’ preferred choice for Asian 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,” according to the 50-page report. “Companies may rank Singapore higher in terms of political stability and freedom amid elevated geopolitical risks in the region.”

Hong Kong codified its position as China’s finance centre by containing political protests and adhering to the country’s Covid-Zero policy during the pandemic, while Singapore highlighted its independence and emerged as the preferred site for international business offices, the report said. Even Hong Kong’s lower standard corporate tax rate of 16.5% may be bested by Singapore programmes that can cut its 17% tax rate to 13.5% or less for some activities, it found.

Singapore also has targeted incentives for foreign companies looking to set up regional hubs, an approach that is paying off.

A list of companies with regional headquarters in Singapore reads like a Who’s Who of multinationals: FedEx Corp, Microsoft Corp, Alphabet Inc’s Google, Mead Johnson, Rolls-Royce and General Motors Co. Companies that operate in more sensitive environments — such as TikTok Inc and online fashion giant Shein — have business hubs in the Southeast Asian city. Chinese companies like electric-vehicle maker Nio Inc are established in the city state, while tech companies Alibaba Group Holding Ltd and Huawei Technologies Co are expanding operations there.  

Even state firms like China Railway Materials set up overseas headquarters in Singapore.

The corporate critical mass and more diversified economy could help Singapore attract even more global business than Hong Kong for the next five years, the Bloomberg Intelligence report said.

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