For decades, Hong Kong and Singapore has been considered some of the best places to work and live in Asia. The two regions’ tax breaks and foreigner-friendly policies are two reasons they have been able to successfully attract foreign businesses.
Hong Kong and Singapore are seen neck and neck in terms of providing a fertile business landscape for expats and foreign investors. In this article, learn about the finer points of these two regions that may tip the scale towards one or the other.
Working Permit Requirements as a Foreigner
To start with, it’s worth looking into the ins and outs of working in Singapore as a foreigner from the standpoint of visa requirements.
Singapore is keen to attract upper-level managers and executives. They’ve developed the Singapore Employment Pass, geared towards foreign professionals who earn US$3,600 or more per month and have the requisite qualifications. It’s a difficult category to qualify for and there are more Singapore working pass types, but none of them is friendly to foreigners without a long and stable history of employment.
There are numerous Singapore working permit requirements and they are measured on skill sets and level, income level, education, and other factors.
Hong Kong, on the other hand, has a single work visa application process. The government issues work permits to qualified professionals under the Employment for Professionals scheme. The application process requires a job offer in Hong Kong, a clean record, educational history, and a salary that’s on par with locals.
Working Hours
Singapore is one of globalised economies in the world. For that reason, working hours vary widely depending on the type of business and related global interests.
The Singapore standard working hours are from 9:00 am to 1:00 pm and from 2:00 pm to 5:00 pm. Saturdays are typically a half-day for many companies as well from 9:00 am to 1:00 pm. The maximum hours required per week are 44 and residents past the retirement age of 60 aren’t required to work at all.
There are eleven public holidays and eight major festivals in Singapore. The cultural diversity is represented by the holidays the city state observes, including Christmas and Easter and the Hindu Deepavali, among others. Most companies close for Chinese New Year as well.
In Hong Kong, working hours are generally from 9:00 am to 6:00 pm but many companies require different schedules depending on requirements. There are 17 public holidays, whilst annual leaves range typically between 7 and 15 days.
Salary
Expats in Hong Kong have some of the best salaries in Asia, earning an average of US$178,706. In Singapore, the average expat earned US$162,172 in 2018. Despite earning less, many people choose to immigrate to Singapore from Hong Kong. Many cite the long working hours as a reason for moving to Singapore for work.
Despite the small variations in salary, both Hong Kong and Singapore are extremely lucrative work locations. Hong Kong has an average monthly wage of US$2,430, while Singapore residents earn around US$3,861 on average.
Income Tax
One of the main concerns for anyone looking to do business anywhere is taxation policies. Both Singapore and Hong Kong have relatively accommodating tax schemes for foreign investors and skilled immigrants.
Personal taxes in both cities work on a tiered system. Personal income tax in Singapore starts at 3.5% and rises to 20% for the highest-earning brackets. In Hong Kong, a similar system starts at 2% and rises to 17% for top earners. Despite this discrepancy, Singapore’s effective net tax rate is lower for personal income.
Both cities have similar corporate tax rates as well. Hong Kong’s headline corporate tax rate is set at 16.5% for assessable profits from corporations and 15% for unincorporated businesses. Singapore’s corporate tax sits at a flat 17%. Both regions have competitive tax structures. Whether it’s profitable to move operations to either for a business will, therefore, largely depend on the type of industry and potential extraneous benefits.
The Fragrant Harbour vs the Lion City
Both Singapore and Hong Kong are leading destinations for personal immigration and foreign investment or business expansion. There are a few differences, with Hong Kong being a little more profitable in some scenarios, but Singapore offering a more comfortable quality of life. Both locations make great considerations for businesses to flourish.