It has become more common nowadays for entrepreneurs to make the decision on doing business in the Asia Pacific. As the most populous continent on Earth, Asia can become a major revenue stream for companies. Not to mention, most Asian countries have favourable government regulations, including enticing tax rates and an expanded talent pool that keeps growing.
Using the historical data of the World Bank’s “Doing Business 2020” data as a primary basis, there are five Asian countries that are the easiest for foreign businesses to operate in. As the economy continues to evolve, we have updated the list with the latest 2023 data. Check out our revised list of the top business-friendly countries in Asia before deciding where to incorporate your company.
Singapore is one of the top choices for companies when considering expanding their footprint in the Asian region. This should be no surprise since Singapore has a relatively low tax rate. The highest corporate tax rate is capped at 17%, and personal income tax is at 22%. All capital gains and dividend payments are tax-exempt, including all foreign-sourced income, as long as they’re taxed in the country of origin. These initial factors make Singapore a favourable destination for doing business in Asia.
English is also one of the official languages here; it’s widely spoken, enabling you to have a seamless transition and integration in Singapore. Foreign investors can own their companies here, as mentioned in our previous article on how foreigners can set up and incorporate their businesses here easily.
Need further proof? Companies such as Google, Facebook and Pfizer have established their regional headquarters here. Furthermore, the EIU’s business environment rankings for the second quarter of 2023 have affirmed that Singapore is the prime location for businesses to thrive for the next five years. To top it all off, Singapore has ranked first worldwide in the 2023 index of economic freedom. All of these details make Singapore a prime location for doing business in Asia Pacific.
Recognised as one of the premier financial centres globally, Hong Kong has 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 gain taxes on investments and stocks; they’re tax-free. They even have no tax on goods and services (GST). Foreigners can also have 100% ownership of their company here, this is another point why this can be a good choice for your gateway to doing business in Asia Pacific.
Setting up an office in Hong Kong is ideal for companies eager to tap into the Chinese market with its proximity and relations to China. Hong Kong is also a part of the top ten countries in EIU’s business environment rankings for 2023. As the second-largest economy and the most populated country, China remains an attractive nation for businesses to conquer.
Malaysia is one of the evolving financial centres in Asia and becoming more popular for foreign investors, most of which opted to open their offices in its capital city of Kuala Lumpur. Several sectors such as wholesale business and distributive business landscapes may be owned by 100% foreigners, whereas sectors like banking and finance, agriculture or tourism may require a local Malay co-ownership.
Malaysia is also a member of ASEAN, so it benefits from low or no tariff trade amongst the member countries, making it ideal for businesses that want to expand to the region. The Malaysian government also launched, the Malaysia My Second Home (MM2H) programme to allow non-Malaysians to enjoy a longer stay in Malaysia, particularly for retirement purposes. This can be an inviting factor for some investors to doing business in Asia.
Taiwan offers a favourable fiscal climate for foreign investors. Its corporate tax rate stands at 20%. But, companies that earn less than NTD 120,000 are exempt from such tax. When having an office in Taiwan, ownership can be wholly owned by foreign investors, except for businesses in telecommunications, broadcasting, and aviation, where foreign ownership is restricted.
Through the Asian Silicon Valley Development Plan, the Taiwanese government hopes to promote innovation and R&D in the technology sector. This has attracted several companies, including Microsoft and Google, to expand their business here, attaining government support and access to an adequate labour workforce. The country is currently ranked 4th worldwide in the 2023 index of economic freedom.
Another Asian country that offers an attractive tax rate is Thailand. They offer three tax brackets for companies; 0% for those who earned up to THB 300,000, 15% for those who earned up to 3 million, and 20% for those who earned above that. Thailand has been one of the top spots for the manufacturing industry, with the likes of Ford and Toyota establishing their footprint here and doing business in Asia.
However, it’s essential to keep in mind that English is not their first language. Hence, it’s not widely spoken, especially for the lower-tier workers who only talk in Thai. Meanwhile, English is only spoken by middle or top-level management. The World Bank has projected the country to have an economic growth of 3.6% within 2023.
The decision on where you should be doing business in Asia is a critical one that ultimately rests on you. However, with Lanturn’s expert assistance, you can quickly and easily incorporate your business in Singapore, regardless of whether you plan to operate locally or remotely.
Wherever you incorporate your business, let Lanturn handle your accounting, compliance, reporting, payroll and tax.