The same old question - where to base your company in Asia?

Revised March 2004

In this the Asian Century, where should you be and where should your company be !

The answer to this question always used to be Hong Kong or Singapore - well there are other contenders; and other solutions and some new contenders. Follow this link for the latest on India's IT hub, Bangalore.

Quality of life:

In 2002 Hong Kong based Political and Economic Risk Consultancy Ltd in a survey of 1,000 expatriates  placed Singapore as number one for quality if life (for expatriate familes) in Asia. Interestingly Thailand was second followed by China. The gradings were based upon an assessment of housing, education, health care, personal security and entertainment. Malaysia and Taiwan ranked fourth and fifth, Hong Kong in sixth place with India and Indonesia at the bottom of the twelve country table.

For families this is not a bad assessment. Singapore is safe, green, user friendly, English speaking and a good base from which to explore the region. Thailand is mostly safe, child friendly, and has good medical care and schooling in Bangkok.

Australia and New Zealand were omitted from the survey on the grounds that they do not really qualify as Asian countries. That said both countries have been very successful in attracting Asian immigrants and investment. And in terms of quality of life (more play than work!!) both would rate highly.

Business Environment

Hong Kong and Singapore continue to encourage foreign businesses with a range of incentives. Malaysia draped its incentives around the Multi Media Super Corridor (the MSC) about which little is now heard.

Thailand has more of an ambivalent love and hate relationship with foreign companies.

China drapes foreign companies in red tape and bureaucracy. And significantly higher corporate and business tax rates.

Business Costs

From late 1997 to 2000 Singapore had a significant cost edge on Hong Kong. A strong US dollar (To which the HKG$ is pegged)  meant that local Singapore cots (on consolidation to US$) were maybe over 30% cheaper than their Hong Kong equivalents. Staff costs, housing costs, office costs, entertainment costs etc were all lower in Singapore. SIngapore property rental prices fell faster and earlier than they have in notoriously expensive Hong Kong.

Now this has changed a little. Price devaluation in Hong Kong; the drift of foreign workers out of Hong Kong, a 5% plus weakening of the US $ have all reduced Singapore's cost advantage.

Then there is Thailand, which I would argue is cheaper than Singapore for foreign travellers and businesses

Taxation Incentives

Regional Travel

There are efficient and new airports in Hong Kong, Singapore, Kuala Lumpur, Shanghai and Seoul. There is a new terminal at Beijing. Bangkok's airport is more of a backpackers haven than a place for suits but it does have some of the best connections in Asia. Bangkok's new airport is due to be operational in 2005.

Hong Kong is no longer the only gateway for China. Shanghai and Beijing offer plenty of connections to internal flights. Seoul (through Korean Air and Asiana) now has many connections into China. There are also more flights from Bangkok to China.

Both Bangkok and Singapore are well connected to South East Asia. Singapore in the better airport and SQ offers very simple connections with its hub and spoke operations including its Silkair subsidiary.

Shanghai's very masculine new granite and glass airport is efficient. But forget about transferring between International flights there. There are no transfer arrangements. You arrive off one flight; clear immigration; collect bags and clear customs; go to the departure area; check in again; pay your airport tax and clear immigration again !!!

The frustration factor

Everyone is frustrated by different thing and every city and country will find new ways to complicate its citizens' and visitors' lives.

Hong Kong has pollution, horrible wet summers, brusque people and horribly expensive restaurants.

Singapore has the Straits Times, Christmas festivities that seem to start earlier each year, an unnecessary public and governmental sensitivity to criticism, and high, high taxes on fun - eg wine.

Bangkok has its famous traffic jams, rain storms that can flood the streets, less widely spoken English as a language of business; a greater separation between the Thai lifestyle and the foreigners, less transparency between business and government (Hong Kong is heading quickly down the same road).

Beijing has new housing, schools, healthcare and facilities for foreigners. But leave the big city and you leave the comforts that it provides. You need much more support to get you through the basics of living - shopping, getting a driving license, understanding the tax system. Understanding the language while not critical is a massive benefit in Beijing - it is less critical in HKG and Thailand and English alone is sufficient in Singapore.

Shanghai may just be simply growing too fast !

Kuala Lumpur has a little brother syndrome; and looks with rather an envious gaze to Singapore. However the city has caught up fast.

Sydney has its annual and increasingly unpleasant forest fires.

Continuity of expatriate staffing

Recruiting and Managing local talent

Climate

Time off

Hong Kong - bars, restaurants, shopping, visits to the outlying islands or to the new territories. Easy access to China.

Singapore - bars (drinking can be expensive here); restaurants, shopping; easy access to the resorts and golf courses of the Malaysian peninsular.

Thailand - wonderful and cheap golf; beaches that you can swim from; spas; some of the world's most pampering and classy resorts !

The unexpected pleasures