Establishing Your Business Presence In Prominent Jurisdictions Is A Major Strategic Move

Imagine a small Asian startup that, within a few years, grows into a global powerhouse. How did they achieve such rapid success? One of the four most effective and innovative strategies to secure global investment was establishing a presence in a prominent jurisdiction.?

In today’s interconnected global economy, setting up in locations such as Singapore, Hong Kong, or Delaware is not just a smart move—it's a strategic imperative for businesses aiming to scale and compete on the world stage.

Let's examine a few examples of several well-known businesses to help you get a clearer picture:

Singapore: Financial ecosystem, tax benefits, skilled talent pool

First, prominent jurisdictions like Singapore and Hong Kong are renowned for their sophisticated financial systems. These locations provide enterprises with unparalleled access to global capital markets, facilitating easier business funding. Companies can tap into a vast network of investors, venture capitalists, and financial institutions.

As an example, Grab, the famous Malaysian ride-hailing service startup, moved its headquarters to Singapore in 2014.?

It was reported in the Edge Malaysia Weekly that Despite applying to Khazanah in Malaysia for a grant of US$10 million, Grab was unable to secure the funding after lengthy internal checks and processes. However, Singapore’s Temasek decided to fund Grab, prompting Grab's Malaysian founders, CEO Anthony Tan, and COO Tan Hooi Ling, to move its HQ to Singapore.?

The investment was one reason for the relocation, but let’s also remember that Singapore offers much lower tax rates, a more simplified tax system, access to its diverse talent pool (it’s also easier to get an employment visa in Singapore than in Malaysia), fewer risks of racial ownership quota laws, etc.?

Furthermore, Singapore has better means to attract global investment, hence more capital and resources for expanding business operations. These factors combined made Singapore a logical choice for Grab at that time. This decision has allowed Grab to become one of the most successful startups in Asia.

Let’s also mention that while Grab's ride-hailing and delivery services may not be very profitable, its financial services and electronic payments have been and are going strong. You'll be amazed at how Grab's infrastructure stays stable and evolves through time.

Hong Kong: Strategic location, robust financial system, regulatory advantages

As a global financial hub, Hong Kong offers various advantages: global connectivity, high-quality human resources, advanced telecommunications networks, and transportation systems. It also offers a business-friendly legal framework, including efficient dispute-resolution mechanisms and flexible corporate structures.?

Furthermore, Hong Kong's strategic location in Asia provides excellent connectivity to major global markets. With its unique position as a Special Administrative Region of China, Hong Kong gives businesses access to the mainland Chinese market while benefiting from its own economic and regulatory systems.

Moreover, its favorable tax regime, with low corporate tax rates and various incentives, makes it an attractive destination for businesses looking to maximize profitability.?

As an example, HSBC Holdings, one of the world's largest banking and financial services organizations, established its pivotal regional base in Hong Kong.?

Despite its origins in Shanghai and Hong Kong and its current headquarters in the UK, HSBC maintains a substantial presence in Hong Kong. The bank has an extensive branch and ATM network and occupies numerous buildings across the city for its various operations. Notably, HSBC is one of the only three banks authorized to issue Hong Kong currency.

With its historical roots in Hong Kong, HSBC enjoys strong brand recognition and customer loyalty in the region, making the Hong Kong branch indispensable to the bank's global operations and strategic growth.

Delaware: Regulatory leniency, tax savings, sound legal framework

Delaware stands out as a preferred jurisdiction for businesses due to its regulatory favorability and robust legal framework. Known for its business-friendly laws, Delaware offers significant benefits such as limited liability protection, flexible corporate structures, and even flexibility in stock issuance.

One notable example is Amazon, which chose to incorporate in Delaware. The state's accommodating corporate laws and tax advantages played a pivotal role in Amazon's decision to establish its corporate headquarters there.

Delaware's General Corporation Law is highly progressive and adaptable, providing businesses with a stable and supportive legal environment. The state also offers tax incentives, including no sales tax, no personal property tax, and a low corporate income tax rate, which effectively reduces the overall tax burden for businesses.

Moreover, the Court of Chancery specializes in corporate law and is renowned for its expertise in resolving business disputes swiftly. The system ensures that companies operating in Delaware benefit from clarity and experience in legal matters.

And by establishing a presence in Delaware, Amazon has been able to capitalize on these regulatory and legal advantages, contributing significantly to its growth and success.

Discover more insights and in-depth information at bbcincorp.com