Hong Kong or Singapore: where to register a startup?

General advantages of creating a legal entity abroad:

• Foreign legislation is more favorable for having a business (i.e. wider freedom of agreement sides in relations regulation, more possibilities of dealing with currency and applying laws about prohibition of enticing clients to competitors;
• Tax preferences;
• Efficient court system;
• Possibility of entrance into new markets and search of new clients;
• More favorable climate for search and attracting of new investments;
• The absence of the direct access to the company activity for a government of the native country.

Disadvantages of creating a legal entity on a base of the foreign jurisdiction:

• Efficient anti-corruption legislation;
• Different language of communication and documentation;
• Creating an account in a foreign bank may require additional expenses or personal presence;
• Possible difficulties in a process of receiving credit in foreign banks in cases where a founder is not a resident of a country.
• Necessity of hiring a local lawyer.

Registration in Hong Kong

Hong Kong is one of the biggest centers of international trade in Asia and the entire world, member of the APEC (Asia-Pacific Economic Cooperation). Geographical location of Hong Kong is quite favorable for development of connection and access to wide markets in the countries of South East Asia (Malaysia, Indonesia, Thailand) including the closeness to China. Agreements with Chinese businesses will lead to more efficient business connections and access to its huge market.

The most common form of a property is Limited Company.

Why Hong Kong?

Basic advantages of creation a company under jurisdiction of Hong Kong:

• The second official language is English (besides Chinese);
•  The absence of limit for amount and currency of authorized capital stock;
• Favorable legislation for international investments: non-residents may be owners without restrictions (except some strategic industries);
• Personal presence is not required for a company registration Hong Kong, all actions can be authorized distantly;
• Investors and directors meetings of the company registered in Hong Kong can be held anywhere in the world. Annual meetings are not required;
• Favorable conditions for a business: low taxes for a company profit (16.5%);
• VAT is absent in Hong Kong;
• If a company did not do business on the territory of Hong Kong and did not receive any income in Hong Kong, than its income cannot be taxed in Hong Kong.
• A company has to pay annual state license tax , which depends on the amount of the authorized capital stock. Minimal annual state license tax with the authorized capital stock less than 10,000 dollars of Hong Kong (about 1,300 USD) is about 300 USD.
• Easy way out: antimonopoly and other restrictions are absent.

Disadvantages of creating a company in Hong Kong

• Information about founders and investors are publicly available in registry list;
• The requirement of having a corporate secretary being a resident of Hong Kong.
• Strict requirements for documentation and annual audit.
• Distant creating a bank account is impossible.

Registration in Singapore