HONGKONG will retain its edge as the cheapest place for an Asia-Pacific headquarters, even after Singapore brings in proposed sweeping tax changes next year, according to tax specialists in the territory.
Ernst and Young chairman of tax services Marshall Byers said: ''Probably in 90 per cent of the cases I come across Hongkong has the edge both as a business environment and on a cost basis.'' Tax specialists said the territory's 17.5 per cent corporate tax - which was not expected to rise over the next few years - combined with a 15 per cent individual rate meant that for most employers, Hongkong would still be the better bet.
Singapore is to introduce a three per cent goods and services tax (GST) next year, accompanying the move with cuts in corporate and personal income taxes.
Singapore now has a corporate tax rate of 30 per cent and a top income tax rate of 33 per cent.
Companies with an annual turnover of less than S$1 million (about HK$4.7 million) would not levy the GST, an exemption which includes 79 per cent of businesses.
Mr Jefferson Vanderwolk, a lecturer at the University of Hongkong's department of professional legal education, said: ''I think the general income rate will still be more than Hongkong's, because I cannot believe they would lower the corporate rate to below 17.5 per cent.