5 Top Markets for Expanding into Asia in 2024 | Acclime (2024)

Relentless development in Asia is resulting in the rise of new global business hubs. A combination of attractive government incentives, growing talent pools, and rapid digitalisation are drawing foreign companies toward the Asia-Pacific region and its large consumer bases.

While traditional financial centres New York and London still top most metrics, the rapid rise of emerging economies in the Asia-Pacific region points to new centres of influence. This guide looks at five of them: Hong Kong, Malaysia, Singapore, Taiwan, and Thailand, and why these are high-potential locations for starting or expanding a business in 2024.

Hong Kong 🇭🇰

Hong Kong is well-recognised as one of the premier financial centres in the world. It continues adding to its track record of economic stability and growth, offering an attractive environment for businesses and investors. Partly this has been through leveraging connections to the world’s second largest economy next door, China. But strategic location is just one factor – the others are sound economic fundamentals and a strong regulatory framework. Let’s look more closely at each of these.

Strategic location: Hong Kong is in the geographic centre of Asia, providing a gateway to not only China but the rest of the region as well. Major business cities such as Beijing, Shanghai, and Kuala Lumpur share the same time zone as Hong Kong, while Bangkok, Jakarta, and Tokyo are only one hour ahead or behind. This makes it an ideal base from which multinational corporations and institutions can conduct business.

Hong Kong also has a deep-water port and well-developed air and rail infrastructure, facilitating efficient trade and logistics.

Sound economic fundamentals: Hong Kong still has its free-market economy with low taxes, a stable currency, and a highly skilled and educated workforce. Foreigners can own 100% of a company, and there are no capital gains taxes or goods and services taxes. Gains from investments or capital transactions (trading of company stocks) are also exempt from tax. Corporate tax rates follow a two-tiered regime. Corporations are subject to 8.25% on the first HKD 2 million of assessable profits and 16.5% above that. For unincorporated businesses, the rates are 7.5% and 15%.

The workforce in Hong Kong is capable of meeting the demands of various industries, including finance and professional services. The majority of people are highly educated and fluent in English, an official language in addition to Cantonese and Mandarin. Hong Kong attracts professionals from different corners of the world, creating a multicultural and international work environment.

Strong regulatory framework: Hong Kong has a robust regulatory framework that ensures the integrity and efficiency of its financial markets. This framework is based on international best practices and is overseen by the Hong Kong Monetary Authority (HKMA). Hong Kong has a strong anti-corruption regime, which helps to maintain the city’s reputation as a clean and transparent financial centre.

Of significant note is that the HKMA facilitates over 70% of China’s renminbi (RMB) cross-border payments through Hong Kong. This makes it the largest and most important global offshore hub for RMB financial services, including asset and risk management, financing, clearing and settlement, etc.

A final note about Hong Kong concerns the recent rise of Singapore on the global investment scene: This perceived threat to Hong Kong’s dominance in Asia-Pacific has inspired it to release the InvestHK 2023 Policy Address. The goal is to reverse the trend by making Hong Kong even more attractive to foreign investors. (Singapore is discussed in more detail below.)

Malaysia 🇲🇾

Malaysia is an evolving financial centre in Asia and its economy has grown steadily over the years making it more popular among foreign investors. Kuala Lumpur is often the city of choice when investing in Malaysia. The standard corporate tax rate in Malaysia is 24%. For SMEs, the first MYR 600,000 is taxed at a rate of 17%, while the remaining amount is taxed at 24%. SMEs are classified as companies incorporated in Malaysia with paid-up capital of MYR 2.5 million, not part of a company group with a higher capital threshold, and have a gross income of no more than MYR 50 million for the year of assessment.Companies operating in wholesale, retail, and distributive business landscapes must obtain approval from the Ministry of Consumerism and Trade in order to have 100% foreign ownership. Foreigners who wish to operate in education, banking and finance, agriculture, or tourism face more stringent guidelines and may require a local Malay co-ownership.

Malaysia benefits from a well-educated and skilled workforce, and a considerable portion of its population is multilingual, fluent in English, Malay, and Chinese. Such diversity of languages enhances communication and operation efficiency for foreign businesses in the country.

Investors with an entrepreneurial technology and innovation background can gain significant benefits from expanding their businesses into Malaysia. The Malaysian government provides investment and tax incentives to high technology companies and other innovative sectors. With a broadly liberal and transparent investment policy, developed infrastructure, high cost-competitiveness ASEAN membership, and attractive government incentives, Malaysia proves to be an attractive location for foreign companies and entrepreneurs to do business.

Singapore 🇸🇬

Singapore is one of the leading business hubs in Asia, due to its business-friendly environment and strong economic infrastructure. It is often favoured by international banks, multinational organisations, and businesses seeking to set up an operation in Asia.

Singapore has an attractive tax regime with a corporate tax rate on taxable income at 17% and concessional rates on a company’s first SGD 200,000 of income. Additionally, there are no taxes on capital gains and dividend income. Foreign-sourced income is also tax-exempt, provided that it has already been taxed in a country with a headline tax rate of at least 15%. Singapore also allows foreigners to own 100% of the company they set up.

Foreign investors will have access to a multilingual talent pool, with English, Mandarin, Malay, and Tamil being the official languages. As English is widely spoken, foreign companies can seamlessly integrate into the local business environment. Singapore also has highly skilled personnel due to the country’s robust education system, and the attractive immigration policies make it easier for skilled professionals from other countries to relocate and work in Singapore. Singapore is a member of ASEAN, so it benefits from low or no tariff trade amongst the member countries. As a pivotal business epicentre in Asia, businesses will gain a variety of benefits when expanding their companies into Singapore. Its low tax policies, excellent talent development programmes, and its recognition as a leading business hub have attracted multinational companies such as Google, Facebook, and Pfizer to designate Singapore as their regional headquarters.

Taiwan 🇹🇼

Located in the heart of the Asia-Pacific region, Taiwan serves as a gateway to the vast market of China, Japan, and other major economies in the area. Taiwan is attractive to foreign investors as it has a favourable fiscal climate and a world-class financial services industry. Its competitive corporate tax rate of 20% also draws companies to expand to Taiwan. Additionally, small companies with taxable income of less than NTD 120,000 are exempt from corporate tax.Taiwan’s official language is Mandarin but English is widely spoken and understood within the business communityIn most sectors, foreigners can own 100% of the company. However, there are limits on foreign ownership in certain industries, including telecommunications, broadcasting, and aviation.

Taiwan is an attractive destination for foreign companies focusing on technology as the government has been proactive in developing the technology sector through the Asian Silicon Valley Development Plan, with the aim of promoting innovation and R&D. Companies such as Google, Microsoft, and Corning have expanded their business into Taiwan. One of the key factors drawing these global companies to Taiwan is the strong governmental support provided in the technology industry and the abundance of relatively affordable, highly educated IT talent.

Thailand 🇹🇭

Thailand is one of the highest potential countries in Asia. With a population of 71 million, its growing economy and business-friendly governmental policies make Thailand an attractive destination for foreign investors and multinational corporations. The standard corporate tax rate in Thailand is 20%. However, for companies and juristic partnerships with paid-up capital of less than THB 5 million and income of less than THB 30 million, the first THB 300,000 of net profit is tax-free. A corporate tax rate of 15% is imposed on net profits ranging from THB 300,000 to 3 million and a rate of 20% is imposed on net profits exceeding THB 3 million.The language barrier may be a challenge for foreign companies looking to expand their business into Thailand. While English is widely spoken and used in the middle to top management levels, the fluency of English among the lower tier workers may vary as they mainly communicate in Thai. As a general rule, foreigners can own no more than 49% of the shares in a Thai company. However, the Thai government offers certain licences and sectors that foreign companies can explore to hold a more substantial portion of the business, such as by getting a foreign business licence (FBL) or through BOI promotion.

Thailand particularly appeals to foreign investors in the manufacturing sectors. Renowned brands such as Ford and Toyota have already established a strong presence in the country and have been granted tax incentives to set up manufacturing plants. Other companies such as Tesco, The Body Shop, and Marks and Spencer have also expanded into the country. Investors who do business in Thailand benefit from good infrastructure, cheap start-up costs for new businesses, ASEAN membership, and geographical proximity to Asian markets.

Overview of top five countries for doing business in Asia

How Acclime can help

Asia is emerging as the leading global financial hub, attracting foreign companies with favourable government regulations, appealing tax rates, and a growing talent pool. These benefits provide lucrative opportunities for businesses looking to grow and expand their operations.

Acclime provides professional corporate services and has the expertise in supporting businesses to expand to new markets. Please contact Acclime for more information on expansion and formation.