Singapore is now the top financial hub in Asia and trails London and New York globally, while Hong Kong slipped to fourth place overall. Both Singapore and Hong Kong feature a low tax environment with strong IP protection, contract enforcement, and dispute resolution, and promote fast and accessible business establishment procedures. As both were once British colonies, their legal systems are familiar and effective for Western investors. While “ease of doing business” is often seen as a euphemism for limited government activity and intervention, in reality effective regulations and government promotions contribute to the countries’ high standings. Although Singapore and Hong Kong are comparable in many areas, each has their own strengths and weaknesses. As a multilingual state using English as its lingua franca to go along with strong Mandarin, Singapore holds a clear communication advantages over Hong Kong, where the primary language is Cantonese.
Singapore is the world’s third most innovative and future-ready economy due to its ability to facilitate people and organizations to drive change, provide quality infrastructure, and promote innovation, growth, and profitability. In contrast, Hong Kong ranked 25th in this survey. Similarly, Singapore’s reign on top of the World Bank’s ease of doing business index spanning over a decade is demonstrative of the city state’s inviting environment for forming and operating businesses.
Although Singapore leads in innovation, Hong Kong has a greater capacity to leverage new listings and is particularly strong in equities and IPOs. While Singapore is known for its business-friendly environment, Hong Kong is similarly competitive in this regard, and surpasses its South East Asian rival in some aspects. For example, Singaporean companies must have at least one director who is a resident of Singapore, whereas in Hong Kong there is no such restriction.
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