Why Western Companies Move to Asia? Part-1

Nowadays, a lot of firms and entrepreneurs from Europe and USA move to the Asia. According to Telegraph UK's news about start-ups record number of British entrepreneurs moved to the Hong Kong to start or continue their firm. In this article, I'm going to give the reasons about `Why Western Companies are moving to the East?`

Firstly, according to World Bank Group report, Singapore is the easiest country for starting and doing business. The second is New Zealand and third is Hong Kong. At Part 1, I will investigate the business conditions in Singapore and Hong Kong.

According to data, in Hong Kong and Singapore, entrepreneurs can establish their firm in just 1 day with small amount of money. ($300 in Singapore)  Basically, you don't have to fight against bureaucracy like Europe. It is simple and easy. Let's see in more detail.

Hong Kong

Hong Kong is now in the world news because of the protests yet Hong Kong's economical view is `Small Government, Big Market` which indicates free trade and individual rights. Mostly entrepreneurs think that Hong Kong's government is the same as China which is not true. What is more, Hong Kong basically holds %20 of China's trade which is huge. 

                                                                           Why Doing Business in Hong Kong? 

Hong Kong is the backyard of China. Usually, firms who want to enter the enormous Asian market, start their business in Hong Kong. Why? Simply,because Hong Kong is very near to mainland China which is the second biggest market in the world. Moreover, population's wealth is growing rapidly which increase the purchasing power at the same time. The best but not the least is minimum tax. There are no capital gain tax and %16,5 profit tax. (%21 in UK, %33 in France)

Singapore

According to IMF's GDP Per Capita ranking, Singapore has the third biggest GDP per capita in the world. Singapore known as `East meet with West in Business` because Eastern society's Western Business style. Having the best infrastructure, education and health-care system in the region is another positive side of Singapore.

Why Doing Business in Singapore?

Location is the first advantage to make Business in Singapore. Singapore is in the middle of the Asia which is very big plus for transportation and trade. Singapore is very unique country in the Asia Region where economical and political stability combined. Growing economy (in 3 years GDP per Capita growth more than %20) is also another catalyst for new start-ups.

Moreover,  country's No Tariff Policy gives big advantage for companies. (Foreign, Local doesn't matter) Like Hong Kong, Singapore has minimum tax rates which help companies to grow up rapidly.  Capital gains are not taxable and corporation tax is for new established companies 0% and for others it is just 17%. Income tax is based on what you earn and maximum %20 if you earn more than $200.000 per year.(whereas maximum tax in UK %40 and in France %70)

Conclusion

To sum up, Western companies are moving to Hong Kong and Singapore to reach eastern markets and use advantages of low tax rates, cheaper labor. Hong Kong gives opportunity to companies to enlarge their business in China. Despite the fact that, enlarge in Chinese Market, the companies will pay less tax and will be in less strict ruled country. Likewise, Singapore gives opportunity to grow and make more profit. In article, I mentioned European Corporation Tax and Income Tax because I want you to see the difference and why these companies are moving. It is win-win situation for both countries and companies. Countries need foreign investment to develop, companies need more suitable places to do business.Therefore, everyone is happy.

-Part 2 will come soon with different Eastern countries.-