Factsheets

Hong Kong and Singapore have increasingly become focal points for international businesses aiming to establish a foothold in Asia. These cities not only serve as strategic gateways to the region's vast markets but also as hubs of innovation and entrepreneurship. The trend of setting up off ices in Hong Kong and Singapore is driven by their well-established legal frameworks, eff icient business services, and competitive financial sectors. Both locations off er robust support for foreign investments, including favourable immigration policies for business owners and skilled professionals. Their reputations as global financial centres, coupled with their strategic geographical positions, make them attractive destinations for German SMEs looking to tap into the Asian market's potential. This surge in interest underscores the importance of understanding the nuances of doing business in both cities to leverage their strengths eff ectively.

As German SMEs look towards Asia for expansion, the choice on where to set up off ice as a business location is pivotal. Both cities off er unique advantages and challenges in terms of setup and maintenance, tax regimes, and compliance requirements. This overview aims to provide German SMEs with a concise comparison of these two dynamic economies, focusing on critical aspects such as minimum capital requirements, the process of opening a bank account, director and shareholder requirements, tax rates including corporate tax, VAT/GST, and withholding tax, as well as compliance obligations like annual renewals and audit requirements. This comparison is designed to aid in making an informed decision, considering both the operational flexibility and regulatory environment of Hong Kong and Singapore.

* The assessment is based on the entire company group.

Both Hong Kong and Singapore present compelling opportunities for German SMEs considering expansion into the Asian market. The choice between the two will depend on the specific needs and strategies of your business, including financial considerations, the importance of a strategic location in Asia, and the regulatory environment you prefer to operate within. It is crucial to weigh the benefits of Hong Kong's closer proximity to the Chinese market against Singapore's robust legal framework and ease of doing business. Ultimately, this guide should serve as a starting point for further investigation and consultation, ensuring your business makes the best possible decision based on current and future needs.

For quite some time, German businesses have been approaching the AHK offices in China with enquiries about potentially false account information from suppliers. Evidently, fraud attempts and hacker attacks are not a rare phenomenon. In some cases, hackers may intercept e-mails from suppliers about payment requirements and forward altered/fake account information to the buyer.

For instance, one German company made an order with a southern Chinese jewellery supplier based in Hong Kong, but received account information of a completely different owner in a different location. This was only noticed long after the transaction had already been made, when the supplier in Hong Kong eventually enquired about the missing payment.

The following steps should therefore always be considered prior to making a transfer:

1. Is the payment claim sent from the same contact e-mail address that has been used previously?
2. If so, is the contact e-mail SSL encrypted? This may not be the case with free e-mail providers (e.g., "Yahoo", "Hotmail", "163.com").
3. Is the name of the account holder and location of the bank account identical to the originally transmitted contact and account information of the supplier? Under no circumstances should money be transferred to a private account.
4. Is the writing style of the e-mail consistent with previous e-mails?
5. Does the (pro forma) invoice contain the correct contact details and corporate font/style?
6. If in doubt, the receipt of invoice and details of the bill should be re-confirmed with the supplier by phone.

Once a payment has been made to the wrong account, companies should immediately contact their bank. Provided that the transfer was not yet posted on the opposite side, it may be possible to cancel the transaction. Unfortunately, the receiving bank in China or Hong Kong is usually unable to help in such cases. If the transaction cannot be cancelled anymore, the only remaining option may be the filing of a criminal complaint with the local authorities.