Where to Incorporate in Asia? Here are the Best Suggestions

Many businesses aim to expand in Asia due to the thriving markets of China and Singapore. Furthermore, numerous Asian countries offer substantial market potential, advanced infrastructure, and economic benefits. Establishing a regional headquarters in Asia can enhance your global presence, standardize systems, and create more business opportunities.

Choosing the right location for your regional hub can be challenging. Considerations include your industry, financial capabilities, local regulations, and target markets. Additionally, you must factor in the incorporation process in a new area.

To assist in your business planning, we’ve highlighted the top four destinations for setting up your regional headquarters in Asia and the key advantages of each country.

Singapore

Singapore stands out as a top choice for companies expanding their presence in Asia, largely due to its favorable tax regime. With a corporate tax rate capped at 17% and personal income tax at 22%, coupled with exemptions for capital gains and dividends, including foreign-sourced income, Singapore offers an attractive environment for business operations in Asia.

Moreover, English serves as one of the official languages in Singapore, facilitating seamless transition and integration for businesses. Foreign investors can fully own their companies here, as highlighted in our previous article on setting up businesses for foreigners.

Further evidence of Singapore’s appeal lies in the presence of major companies like Google, Facebook, and Pfizer, which have established their regional headquarters in the country. Additionally, the Economic Intelligence Unit’s business environment rankings for the second quarter of 2023 affirm Singapore as the prime location for business growth over the next five years. Notably, Singapore has clinched the top spot worldwide in the 2023 index of economic freedom. These factors collectively position Singapore as a premier destination for conducting business in the Asia Pacific region.

Hong Kong

Hong Kong, renowned as a premier global financial center, maintains a standard corporate tax rate of 16.5%. However, the first HK$2 million is subject to only half of the corporate tax rate (8.25%). Similar to Singapore, there are no capital gains taxes on investments and stocks; they remain tax-free. Additionally, there is no tax on goods and services (GST). Foreigners can also enjoy full ownership of their company here, further enhancing its appeal as a gateway for business in the Asia Pacific region.

Setting up a presence in Hong Kong presents significant benefits for companies looking to tap into the Chinese market, thanks to its close proximity and robust ties with China. Hong Kong also holds a coveted position among the top ten countries in the Economic Intelligence Unit’s business environment rankings for 2023. With China boasting the second-largest economy globally and the highest population, it remains a magnet for businesses seeking expansion opportunities.

Moreover, company incorporation in Hong Kong offers streamlined processes and favorable regulatory frameworks, further enhancing its appeal as a strategic business hub in the region.

Malaysia

Malaysia is emerging as a notable financial center in Asia, garnering increasing interest from foreign investors, many of whom choose to establish their offices in the capital city of Kuala Lumpur. Certain sectors, such as wholesale and distributive businesses, permit 100% foreign ownership, while others like banking, finance, agriculture, or tourism may require local Malay co-ownership.

As a member of ASEAN, Malaysia benefits from low or no tariff trade among member countries, making it an attractive option for businesses seeking expansion in the region. Additionally, the Malaysian government introduced the Malaysia My Second Home (MM2H) program, allowing non-Malaysians to enjoy an extended stay in Malaysia, particularly for retirement purposes. This program serves as an enticing factor for some investors considering business opportunities in Asia.

Taiwan

Taiwan provides a favorable fiscal environment for foreign investors, with a corporate tax rate of 20%. However, companies earning less than NTD 120,000 are exempt from this tax. Foreign investors can fully own offices in Taiwan, except in sectors like telecommunications, broadcasting, and aviation, where foreign ownership is restricted.

The Taiwanese government’s Asian Silicon Valley Development Plan aims to foster innovation and R&D in the technology sector. This initiative has attracted companies like Microsoft and Google to expand their operations in Taiwan, benefiting from government support and access to a skilled labor force. Currently, the country ranks 4th worldwide in the 2023 index of economic freedom.

Thailand

Thailand offers an appealing tax structure with three brackets for companies: 0% for earnings up to THB 300,000, 15% for earnings up to 3 million, and 20% for earnings exceeding that threshold. It has emerged as a prime location for the manufacturing industry, with major players like Ford and Toyota establishing their presence here and conducting business in Asia.

However, it’s important to note that English is not widely spoken in Thailand, particularly among lower-tier workers who primarily communicate in Thai. English tends to be used by middle or top-level management. The World Bank has forecasted economic growth of 3.6% for the country by 2023.