A recent report reveals that Singapore has become a more attractive destination for multinational corporations to establish their regional headquarters, outnumbering those in Hong Kong. According to the report released by Bloomberg Intelligence on Thursday, February 22nd, there were 4,200 multinational corporations with regional headquarters in Singapore as of 2021. In contrast, Hong Kong had 1,336 such corporations as of 2023, a drop from 1,541 in 2019.
The report highlights that not only multinational corporations but also many Chinese companies are choosing to establish their regional headquarters in Singapore to hedge geopolitical risks and expand their global business. For instance, TikTok and Shein have both set up their company headquarters in Singapore, while iQiyi has established an overseas base here.
The report states, "Singapore's strong relationships with Western countries, robust talent pool, diversified economy, and tax incentives make it an increasingly popular choice for global and Chinese companies. In contrast, Hong Kong has fallen behind in being the preferred Asian headquarters for international companies." Multinational corporations that have established regional headquarters in Singapore include Microsoft, Google, Rolls-Royce, and General Motors.
Rohan Solapurkar, Deloitte Singapore's Business Tax Lead, said in an interview with Lianhe Zaobao, "In recent years, indeed, more multinational corporations have chosen to set up regional headquarters in Singapore rather than Hong Kong, especially many companies are doing so in the post-pandemic era." He pointed out that factors attracting multinational corporations to Singapore include well-established local infrastructure, good regional connectivity, huge government investments in research and development, competitive tax rates, and well-developed education and medical facilities.
In addition, Singapore has attracted more family offices in recent years. The number of single-family offices that have received tax incentives from the Monetary Authority of Singapore has increased from 700 in 2021 to 1,100 by the end of 2022. According to the Bloomberg Intelligence report, Hong Kong currently has about 400 family offices and hopes to attract more than 200 by 2025. The report notes that Singapore has raised the threshold for applying for tax incentives for family offices, which is expected to attract more affluent families to Singapore. Moreover, Singapore's tightening of anti-money laundering regulations demonstrates to high-net-worth individuals the country's commitment to ensuring market integrity.
On the other hand, Hong Kong leads in the Initial Public Offering (IPO) market. Although Hong Kong's IPO financing fell from USD 13.4 billion in 2022 to USD 5.9 billion last year, it was still higher than Singapore's USD 32.5 million. The report suggests that with more Chinese listed companies heading to Hong Kong for secondary listings to raise overseas funds, Hong Kong's IPO market is expected to rebound this year, with the fundraising amount possibly reaching USD 20 billion.
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