With Hong Kong losing the title as the free market of the world, investors and companies can certainly consider the possibility of protecting their investments by moving away from Hong Kong.
The obvious choice for an alternative Asian hub is of course Singapore, which has just overtaken Hong Kong as the world’s freest economy. Both Singapore and Hong Kong have many inherent advantages as investment centers: minimal bureaucracy, low oversight and, clear tax systems, to name a few.
When relative equality is shifting now as Hong Kong’s profitability as a safe haven for foreign investment deteriorates, making Singapore a safer alternative.
Transferring assets and investment from Hong Kong to Singapore may seem overwhelming, but the process is actually very simple. Let’s take a look at your choices for moving your company from Hong Kong to Singapore.
Hong Kong companies moving to Singapore Please note that in order to meet the requirements of the Singapore Accounting and Companies Regulatory Authority (ACRA), you must work with a credible Singapore Company Incorporation service provider. This is of course a good thing, as they can help make the process as quick and easy as possible by assisting you in this process.
The first thing you can do is revisit your decision to choose the best organizational framework to move your business from Hong Kong to Singapore. Although Singapore greatly encourages incorporation into the best possible environment, there are undoubtedly positive and negative factors for everyone.
When choosing a business structure in Singapore, there are three main options:
Option 1: Establish a parent company in Singapore
This choice allows you to establish a company in Singapore that will act as the parent company for your Hong Kong business. In due course, until the transition is complete, you will establish a second, separate company in Singapore that will serve as the primary operating company for your business for the long term.
Firstly, your second long-term business in Singapore will be wholly owned by your original parent company in Singapore, but you may transfer your interest to your Hong Kong company over time. You can then, in your spare time, encourage a transfer of assets from your Hong Kong company to your Singapore company.
The advantage of this option is that you can keep your business in Hong Kong alongside your business in Singapore. However, if developments are catastrophic for your Hong Kong business, the operational reins can be taken over by your companies in Singapore, all of which provide strong legal protection during the transition period.
When all business operations have been transferred from your Hong Kong company to your Singapore company, your Hong Kong company will be closed and removed from the registry. You can then continue your business in Singapore under your original parent company in Singapore or close the parent company to have an independent business.
Option 2: Establish a parent/subsidiary company in Hong Kong
This alternative is almost the opposite of the previous option, as the parent company is based in Hong Kong and not in Singapore. However, it is still possible to establish the operating company in Singapore and gradually transfer the business from the original Hong Kong company to the new Singapore company.
When the transition is complete, both the original Hong Kong company and the Hong Kong parent company could be closed.
The main advantage of this choice is that work permits and visas for Singapore will be easier to obtain if the new company in Singapore is a subsidiary of a foreign parent company.
Option 3: Convert the existing Hong Kong company into a parent company
This choice allows your existing Hong Kong company to be the parent company of your new Singapore company. Otherwise, the mechanism is similar to the first option. Your new company in Singapore will be designed to mimic your original Hong Kong organization for the business transfer.
This is preferable because it is much easier, but if your project in Hong Kong goes wrong, you will not have so many legal remedies available.
Where to Next to Transfer Your Company from Hong Kong to Singapore
The urgency of your move from Hong Kong to Singapore is best judged by you, and it is our responsibility to meet your needs and guide you through what will undoubtedly be a fundamental change in your operation.
Over the past decade, Singapore has always been considered the easiest place to start and run a business. According to the World Bank’s Doing Business 2020 report, Singapore ranks second out of 190 economies when it comes to business facilitation. Therefore, incorporating a company in Singapore with help from companies like HeySara is a brilliant idea, as it is expected to become the world’s private banking hub in the coming years.
Even if you have no concrete plans to reduce Hong Kong’s current operational risks, we invite you to explore with us your options for moving to a stable and prosperous Singapore.
In this article we have tried to provide as much free information as possible, but if you have any questions about the specifics of moving your business from Hong Kong to Singapore, please do not hesitate to get in touch with us.
With our large team of lawyers, bankers and human resources specialists, we have been doing this for a long time, so we are sure to save you time, money and hassle.
If you would like a personal consultation, please do not hesitate to contact us and it is our duty and pleasure to help you.
Article contributed by Heysara.sg
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