Many aspects go into making a business successful, and the company’s location is often the first big decision for investors and entrepreneurs. And today, Asia Pacific is perhaps the most important business region in the world. According to HSBC research, developing economies will account for roughly 70% of future global growth.
Asia is the world’s largest and most diversified continent. It is home to advanced infrastructure, world-class innovation hubs, and densely populated emerging markets. It has undergone a remarkable technological boom over the previous three decades, with GDP growth in many of the continent’s nations outpacing Western markets. As a result, expanding into Asia has become a top priority for companies looking to grow their global reach.
In this article, we look at the five best cities to start a business in Asia, all of which have appealing business environment and a variety of exciting opportunities.
Singapore (Singapore) 🇸🇬
Singapore is regarded as one of the most attractive markets in Asia and ranks second in the 2020 Ease of Doing Business report. Located in the heart of Southeast Asia, Singapore provides foreign corporations with investment possibilities and strong trade.
To promote the steady flow of foreign investment, the Singapore government has signed 21 free trade agreements (FTAs) and 76 comprehensive avoidance of double taxation agreements with 27 countries (DTAs). These agreements make it easier to do business and trade across borders by lowering tax and tariff barriers to trade, technological know-how, and experience.
All this, together with a flat corporate tax rate of 17%, tax exemptions for new enterprises of up to SGD 125,000, low personal income tax and a legal system based on English common law (due to Singapore’s past as a British colony), make Singapore one of the most attractive business expansion destinations in Asia.
As a testament to Singapore’s legal system, the World Economic Forum has placed Singapore second in the world and first in Asia for having the most refined intellectual property (IP) protection (WEF). It is also ranked with the Singapore International Arbitration Centre ranking second in the world following only Lausanne.
Singapore is a genuine hub of rising talent in terms of global talent acquisition, with its effectively multilingual workforce and a hiring culture that ranks third in the 2020 Global Talent Competitiveness Index.
Additionally, the world average time to start a business in a country is 20 days. The average in Singapore is two days. This fact alone might easily be considered another practical reason Singapore is an attractive place to start a business.
Hong Kong (China) 🇭🇰
When it comes to business advantages and ease of doing business, Hong Kong is frequently compared to Singapore. It is home to a thriving economy based on free trade principles. The city is conveniently located in Asia’s heartland and serves as a gateway to mainland China. And despite the impacts of Hong Kong’s social and political instability of 2019 that continue to linger, it’s still widely considered a highly competitive market for business expansions.
Foreign investors can expect a low-tax environment, a straightforward company formation process, and the choice of various legal entities suitable for small, medium, and big businesses when expanding into Hong Kong.
In Hong Kong, the usual corporate income tax rate is 16.5%, with a 15% rate for unincorporated organisations. Another significant benefit is the relative simplicity with which a company can expand into new areas. While legislation in mainland China can change swiftly, Hong Kong’s institutions are constant and transparent.
Not only can foreigners own 100% of the business they established in Hong Kong, but they can also be the sole owners or shareholders. There are no specific requirements to be a permanent resident or of a particular nationality.
Along with Cantonese, English is one of Hong Kong’s two official languages. Hong Kong also has a competent and well-educated local workforce and a steady influx of talent from around the world.
Seoul (South Korea) 🇰🇷
South Korea is Asia’s fourth-largest economy and the world’s eleventh-largest economy. The country is famous for its swift and remarkable shift from one of the poorest to one of the richest. This is known as the ‘Economic Miracle,’ and it has been key to attracting many international organisations and investments from all over the world.
South Korea is also classified as a “free economy” by the Index of Economic Freedom, with very low government intervention in business. Foreign businesses that contribute to the local economy are offered industrial sites, tax benefits, and subsidies by the South Korean government. Furthermore, government-supported free trade zones, tax breaks, and inexpensive land rentals provide additional incentives for expansion.
Seoul is the capital and largest business centre of South Korea. It was named the world’s fourth-largest metropolitan economy in 2014 and is considered to remain one of the most competitive world cities for future development. Seoul’s economy thrives on exports, and thus the city is constantly striving to expand in the global marketplace.
Manufacturing is one of the city’s major employers, with electronics and information technology being in the highest demand.
The service sector also employs a large portion of the workforce in the city. International and trade corporations headquartered in Seoul, banking and insurance companies, and professional and business service organisations are the major employers. Seoul is the country’s financial capital that hosts numerous yearly trade events; thus, the major banks and stock exchanges have their headquarters there and on Yi Island.
Seoul is a metropolis that can adapt to whatever the future may hold, so ensuring the survival of businesses in Seoul will never be in doubt. And as Seoul’s economy grows, so does the prospect for international companies to invest in the city’s various industries.
Osaka (Japan) 🇯🇵
Japan is the world’s third-largest economy, after the United States and China, an incredible achievement given its modest size compared to other larger industrialised nations across the globe.
Japan offers excellent opportunities for all kinds of foreign investors due to recent changes that boosted the economy and eased government regulation. With a very low unemployment rate, the Japanese workforce is available and willing to assist you in taking your company to the next level.
Osaka, Japan’s main island’s largest port city and trade centre, is perfect for companies seeking to expand into the country. This city is an industrial powerhouse that rivals Hong Kong and Singapore in economic output.
The Osaka Prefecture has a diverse economy that covers a wide range of industries. Service, manufacturing, and wholesale/retail are three core industries that have witnessed stable growth. There are roughly 440,000 enterprises in Osaka Prefecture, with approximately 210,000 in Osaka City. There are also 425 stock exchange businesses headquartered there. Panasonic, Sumitomo Electric Industries, Nippon Life Insurance, and Sharp all have headquarters in Osaka Prefecture.
The Osaka Prefectural Government has introduced numerous programs to aid foreign enterprises looking to establish or extend their presence in Osaka to increase international competitiveness. Many subsidy schemes, sector-specific innovation centres, and business support programs are among these initiatives.
Taipei (Taiwan) 🇹🇼
Taiwan is regarded as one of the best places in the world, and not just Asia, to do business. It offers a low corporation tax rate, world-class infrastructure, and a business-friendly legal and regulatory environment, all in addition to its convenient geographic proximity to North and Southeast Asia.
Taiwan is very open to foreign investment. Unlike other countries (such as Thailand or the Philippines), where foreigners are not allowed to own 100% of a company’s shares, foreigners in Taiwan are permitted to do so. Foreigners have nearly the same rights as locals, allowing for smooth business operations in the new country. In addition, there is no requirement for a minimum amount of paid-up capital to start a firm in Taiwan.
Taipei, Taiwan’s award-winning and trailblazing smart city, was recently recognised as the best place in the world for expats to live and work by InterNations. The city has a central hub accountable for many smart technology innovations that are currently sweeping the globe.
Taipei even has a web portal where residents (including visitors and expats) can submit their smart-tech ideas for serious consideration by the administration.
This has had a significant positive impact on the city’s economic performance and exports, with 70% of the world’s total integrated circuits created here. It was also encouraged by low-interest loans created particularly for innovation and R&D initiatives. Companies can submit a request for loans of up to 80% of an approved plan’s total expenses, with the maximum loan amount being NTD 65 million. So, if you plan to start or expand a circuitry or electronics engineering business, Taipei should be your first option.
Despite being one of the most popular areas for global corporate expansion, Asia has its challenges. But with the proper planning and the right partners, such as Acclime, the business expansion out of your home market into Asia can be a great success.
At Acclime, we help our clients manage the risks by providing them with a holistic market-entry strategy and counselling through local legislation, employment regulations and tax compliance, all to ensure their business establishment in Asia is smooth and efficient.