Hong Kong vs Singapore: which is the best regional centre?

Many multinational corporations look to set up their regional treasuries – the nerve centre of where they manage their finances – in one of Asia’s financial centres. But which one best suits the needs of business?

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Hong Kong and Singapore are the two prime candidates. Their rivalry is longstanding and choosing between them can be something of a dilemma for international companies.

" Choosing between [Hong Kong & Singapore] can be something of a dilemma."
Emma Davine & Kunal Dey, Head of Client Solutions, Transaction Banking & Director Regional Sales, Transaction Banking, ANZ

Both cities are vibrant, global and ambitious with incentives like tax breaks to lure companies to set up a treasury centre on their turf. But so far, the tax breaks don’t seem to be the deal maker.

A recent poll of treasurers by Asiamoney found only 35 per cent of corporates and 21 per cent of financial institutions would likely move the location of their treasury centre because of the tax incentives on offer.

When asked what was important in choosing a location, the ease of making international payments topped the list.

Being able to manage cash effectively may be top of mind for a treasurer but international companies which employ thousands of people also have other issues – such as lifestyle – to consider.


The cost of living and relocating staff is one such issue. Hong Kong tops Mercer’s global cost of living survey. Singapore comes fourth.

According to some estimates, a three-bedroom apartment in Hong Kong (US$10,000 per month) could be twice the price of a dwelling the same size in Singapore (US$5,000).

According to ANZ Mobility, which draws on data from ECA International, if an employee relocates from Melbourne, Hong Kong is an estimated 1.62 times more expensive than living in Melbourne. Singapore is only 1.45 times more expensive than living in Melbourne.

And the cost of relocating increases for families with school-age children. Hong Kong is also more expensive than Singapore for school fees, according to ANZ Mobility.

Secondary school fees, for example, are approximately $A33,000 in Hong Kong, compared with $A30,000 in Singapore. Hong Kong schools are also more difficult for expatriate children to get into, compared with Singapore.


For many multi-national companies, lifestyle attractions are important in engagement and hiring. The expatriate experience is an attraction in itself for many professionals and both Singapore and Hong Kong are hardly hardship postings.

Whether it is proximity to travel destinations in Asia (and efficient airports to service them), food, culture, leisure, international profile, both locations can boast advantages.

A growing and more intangible issue is cultural inclusion. For companies with diversity and inclusion policies, Hong Kong is considered to have a relatively more liberal stance on LGBTI (lesbian, gay, bisexual, trans and/or intersex) rights, topping the list in Asia for workplace inclusion and diversity, according to Randstad’s Workmonitor survey.

The recent Pink Dot event in Hong Kong, a carnival supporting inclusiveness and diversity, highlights the difference between the two locations’ approach to LGBTI rights.

When Singapore – where homosexuality is still technically a crime - hosted the Pink Dot event in June, the Ministry of Home Affairs issued a strong statement about foreign companies’ involvement. It said LGBTI issues were a domestic matter foreign entities should not interfere in.

“The Ministry of Home Affairs will take steps to make it clear foreign entities should not fund, support or influence such events held at the Speakers' Corner,” it said. “In the context of LGBT issues, this will apply both to events that advocate the LGBT cause such as the Pink Dot, as well as events whose purpose is to oppose the LGBT cause.” 

For companies actively promoting a diverse and inclusive workplace, such a position may sway their decision, especially if they are expecting any of their employees to move there.

These complex issues relating to staff inclusion and engagement may not be the most obvious factors in a company’s decision when choosing a regional treasury centre but they are increasingly important.

A treasurer will always focus on clearly measurable factors such as proximity to the company’s core growth area, regulatory and tax environment. But sustainability of core talent may be equally important.


Over the past 12 months, the playing field between Hong Kong and Singapore has levelled around competitive tax and corporate incentives as well as ease of doing business. 

There has been very little movement of existing regional treasuries between the two financial centres, except in limited cases where treasury strategy has changed.

However, there has been a slight shift in newly established corporate treasuries being established in Hong Kong as opposed to Singapore.

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There are a few reasons for this:

• Hong Kong’s proximity to China’s trade and capital flows. In particular, the One Belt One Road strategy on which China is embarking to create an economic belt across Asia into the Middle East and Europe is an attractive incentive.

• The recently launched China-led Asian Infrastructure Investment Bank (AIIB). The bank’s focus is to promote development and financing of the projects in RMB positions positions Hong Kong as a primary financial centre due to its large RMB liquidity pool.

• Historical and emerging advantages including:

-Access to experienced people fluent in English, Cantonese and Mandarin;

-The foundation of British law; and

- The ease of access to business and trading partners in China via high speed rail, new infrastructure.

• The growing impact of tightened foreign labour restrictions in Singapore. A concerted push on the hiring of local talent has resulted in increased recruitment complexity and higher costs for those companies that require foreign labour.


Tax incentives are one consideration but there are many other. Your regional treasury needs to be in a location that:

• Is close to your key business operations – ideally considering both your current and future footprint

• Allows you to manage the time zones across your business effectively

• Is in a cost effective location where it is easy to do business

• Is politically and economically stable

•Has a stable banking and regulatory environment

• Has a strong legal framework and structure

• Doesn’t have a high amount of foreign-exchange and cross-border restrictions that will reduce your effectiveness

• Preferably has a favourable tax regime

• Allows efficient access to the currencies and clearing systems you need

• Allows you to attract and retain high quality treasury expertise – here you will need to think about time zones and socio-economic factors, as well as the cost of living and environment

• Allows for ease of communication with your broader teams

• And lastly, will not expose your people to an unacceptable safety threat or exposure to corruption.


In coming to a decision, it is important to weigh up objectives and idea model against each location a businesses is looking at. The below table outlines some key ideas.

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Emma Davine is Head of Client Solutions, Transaction Banking & Kunal Dey is Director Regional Sales, Transaction Banking at ANZ

A version of this article appeared previously in Global Treasury Briefing.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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