“Hong Kong’s Mainland Connection Still Gives It An Important Edge Over Singapore”
In the past few months, the exodus of foreigners and companies from Hong Kong has been constant.
Although those leaving have chosen to emigrate to an array of destinations, one of the favourite places seems to be Singapore.
The city state was named the world’s freest economy by the Heritage Foundation in 2022: its beneficial taxation system paired with its world-class infrastructure and connectivity to Asia has catapulted it to new heights, making it a magnet for businesses.
More recently, it did a 180-degree turn in its Covid-19 policy, reopening its borders and removing its mask mandate for indoor places. Plus, you can’t underestimate the value of being able to jump on a plane and spend the weekend in Bali!
So what does this mean for Hong Kong in the future?
While several companies have decided to move their Asia-Pacific headquarters out of Hong Kong, many others have decided to stay, holding tight to the hope that the international gates will fully reopen soon. Like Singapore, Hong Kong is trying to secure its status as a regional hub, so the fight in the ring will be one worth watching.
The most interesting role Hong Kong will continue to play is as the main gateway to the mainland Chinese economy. The key business alliance between China and Hong Kong was solidified in 2003 with the signing of CEPA (Closer Economic Partnership Arrangement), which provides businesses registered in Hong Kong easier access to the Chinese market.
My own case provides an example. As a Hong Kong permanent resident, I was able to register a company in Hong Kong and through that legal structure, I then opened my business in mainland China. The process was fast and easy and enabled me to enter China in a fraction of the time it would take a foreign individual or entity.
The advantages of entering China through Hong Kong cannot be disregarded, and companies looking at entering China should definitely consider Hong Kong as a golden bridge.
So, Singapore or Hong Kong, which one will it be?
Veronica Llorca-Smith, Kennedy Town