Here are five other factors that entrepreneurs should look at when deciding on where to place their hub in Asia Pacific.
6) Being a start-up
The startup and entrepreneurial scene in all three Asian hubs is vibrant and exciting. There are many areas where each respective government has designated as being enterprise zones.
I always find these rather bizarre. A special place just for entrepreneurs to hang out usually far from anyone else. Main reason for being there is cheap rents. However, this is often counter-productive.
The zone in Singapore, for example, is 20 to 30 minutes outside of the CBD (45 to 60 minutes from Changi Airport) and therefore anyone like us whose clients are in or are quite happy to visit the CBD would have to travel to them, taking hours out of your day. That has its own cost and is more than cheap rent saves.
The opportunity cost of time wasted is just as important as an actual cost for entrepreneurs. I would much rather be in a CBD coworking space which is often just as cheap and more convenient. People love coming to visit me at Collective Works; they don’t so much at Block 71, the enterprise hub out at One North in Singapore, for example.
Singapore wins for effort.
7) Entrepreneur organisations
All three locations have interesting entrepreneur organisations. Many have vested interests and are too local and inwardly looking. I find BNI, for example, in Singapore to be of limited value and purely full of local entrepreneurs, not international ones who are put off by it.
The reverse ironically is true in Hong Kong, which is better.
Same goes for Entrepreneur Organisation. My experience with them in Shanghai has been amazing where they have English-speaking only and Chinese-speaking versions, and that works well for both sides. The people I meet there have been fantastic, many are clients of ours.
It appears in Singapore and Hong Kong that the EO “chapters” there are more for vested interests of local powerful families as opposed to real entrepreneurs. Needless to say we haven’t created any clients from these chapters.
In Singapore it’s notoriously hard to employ the best person. Easy to employ a local or Permanent Resident but expats have a hard time being employed under a Singaporean-first policy.
It is somewhat ironic that Singapore is expanding its CBD. More and more commercial real estate is being built and Singapore is always offering international companies tax breaks and incentives to come here while at the same time restricting who they can employ once they get here.
One counters the other in a city where there is effectively full employment. You win on one side but lose on the other. Yes, not everyone has their dream job (does everyone everywhere?) and locals complain about expats having ones that they aspire to but not everything can be equalised by force, some things are actually based on experience and characteristics.
The best person should always be employed, not be forced to be. That is not always the person with the MBA or degree as Singapore is obsessed by. Experience trumps qualifications every time, for me.
Hong Kong has a more relaxed attitude towards employing foreigners and is therefore potentially more attractive to employers. There are restrictions but not enforced like they are so enthusiastically in Singapore.
Like in Singapore you can also become a PR, although in Hong Kong it’s based on time living there (seven years) as opposed to pressure and quotas as in Singapore where I have known millionaires to be declined and have subsequently moved to Hong Kong.
Shanghai is a mixture of the two others. Some people have told me it’s easy to get a permit; others that the bureaucracy is immense and prevents it.
Hong Kong wins.
9) Corporate hospitality and entertainment
This is very much down to your personal choice but each city has amazing nightlife, incredible views (when you can see them in Hong Kong and Shanghai), and fantastic food and drink choices. To me, the deciding factor in is the weather and getting around.
Both favour Singapore where you can go out to network or entertain on that rooftop bar 24/7, 365 days of the year. The other two can compete on views and food/drink quality but not that. Each is as expensive as the other.
Even Hong Kong with zero alcohol tax is as expensive when it comes to buying it in a bar/restaurant as massively taxed Singapore.
Singapore wins because of the availability and access to it all year round.
Setting up a company - easy in Singapore, you only need a local or PR to be a shareholder. Hong Kong is even easier, you don’t even need to be that or even be a resident to do so. Shanghai is a mixture of the two.
Getting around - Singapore is easy to get around partly because of the size and partly because of the Uber/Grabtaxi system along with the MRT/bus network. It is faster, cleaner, and better.
Hong Kong’s MTR works well and it’s trying to resist Uber to protect its vested taxi interests but traffic is worse than in Singapore, the taxis dirtier, and only Chinese-speaking compared to Singapore.
Shanghai is a real challenge to get around; even if you can find a taxi (Uber is a must here), the traffic ensures that you are stuck more so than in Singapore or Hong Kong. Uber is coming in force because of this but that doesn’t help you get around. Their MRT is also ever-expanding but not yet complete like Singapore’s.
Airports - no contest Singapore’s Changi Airport thrashes both the other two based on every factor going. From the design/ambience to the queues, Singapore trumps the others. Why do I turn up at HK or Shanghai airport and there are queues to check in, queues to go through security, and queues to go through passport control? Yet at the same time in Changi there are none of any.
Arrivals are also stress-free, quick, and you feel you have arrived in a tranquil garden at Changi whereas they are the opposite in HK and Shanghai where the design of the airport alone looks like it’s anti-customer friendly and oppressive, not positive and enlightening as I always feel coming and going in Changi. Simply the world’s best airport, let alone Asia’s.
Getting things done - each has its ups and downs, some more bureaucratic than others. I find Singapore less so – employment issues aside, that is.
Taxation - each has very low and very competitive company taxes and no taxes on company dividends which makes all three attractive especially compared with any Western country.
Singapore wins, for me.
Final score: Singapore 8, Hong Kong 1, Shanghai 1. What do you think? Where are you based and why?
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
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Chris Reed has 25 years of senior marketing experience on both the client and agency side in the UK and now in Asia Pacific. He is the CEO and founder of Black Marketing.