Singapore or Hong Kong for your Asian holding or trading company?

Tax rates, the territorial question, directors and secretaries, audits, and the India treaty rates side by side, so the choice rests on facts.

A hand signing a printed document

The short answer

  • Hong Kong taxes profits at 8.25% on the first HK$2 million and 16.5% after; Singapore at 17% with partial or start-up exemptions.
  • Hong Kong taxes only profits sourced in Hong Kong. Singapore taxes foreign income when it is received, with wide exemptions.
  • Singapore needs a resident director; Hong Kong needs a Hong Kong-based secretary but no resident director. Every Hong Kong limited company is audited.
  • From India, treaty withholding on dividends is 5% to Hong Kong against 10% or 15% to Singapore. Interest, royalties and technical fees are similar.

Side by side

Exhibit 1
Side by side
SingaporeHong Kong
Headline rate17%, with the partial exemption or start-up exemption on the first S$200,0008.25% on the first HK$2 million, 16.5% above; only one company in a connected group gets the lower tier
Foreign incomeTaxed when received in Singapore, with exemptions for qualifying foreign dividends, branch profits and service incomeTerritorial: offshore profits are not taxed if the claim is supported; foreign-sourced passive income of group companies falls under the FSIE rules
Dividends paid outNo withholding taxNo withholding tax
Capital gainsNot taxed as suchNot taxed as such
GST or VATGST at 9%None
DirectorsAt least one ordinarily resident in SingaporeAt least one individual; no residence rule
Company secretaryRequired within six months, resident in SingaporeRequired: an individual living in Hong Kong or a Hong Kong company; a sole director cannot act
AuditExempt if it is a small companyEvery limited company, unless dormant

The India angle

For an Indian group, the treaty rates on money flowing out of India often decide the question. Rates below are India's treaty maximums on payments to each place.

Exhibit 2
The India angle
Payment from IndiaTo SingaporeTo Hong Kong
Dividends10% if the company holds at least 25%; otherwise 15%5%
Interest10% on loans from banks and financial institutions; otherwise 15%10%
Royalties10%10%
Fees for technical services10%10%

The India and Hong Kong treaty entered into force on 30 November 2018 and applies from 1 April 2019. Either way, treaty rates only help a company that is genuinely resident and managed where it claims to be. See POEM and substance.

How to choose

  • South-East Asia customers, Indian or global investors, regional headquarters: Singapore usually fits better.
  • Trade with mainland China and North Asia, sourcing hubs: Hong Kong often fits better.
  • Holding company for dividends from India: compare the 5% Hong Kong rate against the cost of real substance there, and check where the board will meet.
  • Thin teams: Singapore's audit exemption for small companies can tip the running cost, because every Hong Kong limited company is audited.

Questions people ask

Which has the lower tax rate?

Hong Kong: 8.25% on the first HK$2 million and 16.5% after. Singapore's headline rate is 17%, but its exemptions cut the effective rate on smaller profits.

Does Hong Kong tax foreign income?

Profits sourced outside Hong Kong are not taxed if the claim is supported, but foreign passive income of group companies is caught by the FSIE rules unless conditions are met.

Which treaty is better for dividends from India?

Hong Kong caps Indian withholding on dividends at 5%, against 10% or 15% for Singapore. Interest, royalties and technical fees are similar.

Do both need a local director?

Singapore needs one director ordinarily resident in Singapore. Hong Kong has no director residence rule but needs a Hong Kong-based company secretary.

Choosing between the two?

Tell us where your customers, investors and board will be. We set out the facts for both, with costs, in one working day.

Sources

  1. IRAS: Corporate income tax rates, exemptions and rebates
  2. Hawksford: Taxation and accounting in Hong Kong (secondary source)
  3. Air Corporate: Hong Kong corporate tax guide (audit and filing) (secondary source)
  4. Hong Kong Companies Registry: Directors and company secretary FAQ
  5. EY: Hong Kong and India income tax treaty enters into force (secondary source)
  6. PwC Worldwide Tax Summaries: India withholding taxes and treaty rates (secondary source)

General information only, last reviewed 1 November 2026. It is not advice for your situation. Laws and practice change, and the official sources linked above prevail. Speak to a qualified adviser before you act. Northwise does not file with Indian authorities; India-side work is done by independent licensed firms.