It’s official – Singapore is the preferred location for the Asian headquarters (HQs) of multinational enterprises (MNEs), putting the city-state ahead of its closest competitor, Hong Kong, according to a Bloomberg Intelligence report released on February 21. This achievement cements Singapore’s standing as Asia’s premier business destination.
In 2023, Singapore played host to the regional HQs of 4,200 MNEs, way ahead of Hong Kong’s 1,336. Notable MNEs that have set up their HQs in Singapore include Microsoft, Google, FedEx, Rolls-Royce, and Mead Johnson. Chinese companies looking to hedge geopolitical risks and broaden their reach have also picked Singapore over Hong Kong, according to the report. Tiktok and Shein, for example, have business hubs in Singapore, while Alibaba Group and Huawei Technologies are expanding their presence in the city-state. Given the corporate critical mass and more diversified economy in Singapore, the city-state is set to attract even more global business than Hong Kong in the next five years, says the report.
“Hong Kong has lost the race to be international businesses’ 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,” says the report. It also notes Singapore’s political stability and freedom amid the heightened geopolitical risks in the region.
In terms of taxes, the report points out that while Hong Kong has a lower standard corporate tax rate of 16.5%, compared to Singapore’s 17%, Singapore offers a multitude of initiatives which can bring down the rate to 13.5% or lower, for certain activities. Singapore also has targeted incentives for foreign companies to establish their HQs in the country.
Singapore’s central location in Asia and excellent connectivity are among its many essential attributes for hosting MNEs’ regional HQs. As Minister for Foreign Affairs Dr Vivian Balakrishnan said at a FedEx event last month, “We hope that companies like FedEx and indeed the wider business community will continue to take advantage of Singapore’s position; Singapore’s ability to serve as a vital global node in global supply chains; take advantage of the US-Singapore FTA, which enables American companies like FedEx to plug-and-play in our high trust, high reliability ecosystem, and use us as the springboard to tap into the wider Southeast Asian, South Asian, Middle East, African markets – where growth is going to be in the next two decades.” Dr Balakrishnan was speaking at the official opening of FedEx’s Asia-Pacific, Middle East and Africa HQ in Singapore on February 27.
SINGAPORE: PREMIER BUSINESS HUB
Singapore is a regional hub for professional services firms, offering a cosmopolitan workforce and trusted regulatory framework. From business consulting to accounting, from innovation and intellectual property rights protection to law, marketing, and research and development, there is a vibrant ecosystem attuned to Asian needs that is ready and able to support MNEs’ regional HQ activities. Singapore continues to transform for the future, strengthening its position as a node for various activities.
Why invest in Singapore? Here are a few reasons:
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