MULTINATIONAL companies are moving their Southeast Asian headquarters out of Singapore to save money and pursue new opportunities, Nikkei Asia reports.
Though Singapore remains a leading hub for Japanese corporations, others are looking at Malaysia and Thailand to set up their bases.
An example of this is Sakata Inx, a printing ink maker, which established a regional head office in Malaysia on February. It said its regional headquarters, opening by early 2025, will oversee business in South and Southeast Asia, including India, Thailand, Vietnam and Indonesia.
The report said the tax incentives offered in the two countries appear to have motivated the companies to move out of Singapore.
It said the the new headquarters is expected to add ¥1 billion (RM31 million) to ¥2 billion to the company’s operating profits under a medium-term business plan.
"Tax advantages" were the deciding factor in choosing Malaysia, a spokesman was quoted as saying in the report.
The report noted said Malaysia’s proposed fiscal 2024 budget introduced "global service hub" tax incentives for locating regional headquarters there, including preferential income tax rates of 5-10% for up to a decade.
It said Thailand is another leading venue choice for regional headquarters. The country is often picked in conjunction with plans to expand production and sales.
The report said Nissin Foods Holdings in 2020 moved its Southeast Asian headquarters from Singapore to Thailand, which is also working to lure multinationals through tax incentives.
It said among Japanese companies with regional headquarters in Singapore, 31% had partly relocated their business to another country or were considering doing so in a poll released in March by the Japan External Trade Organization. The share was up significantly from 7.4% in the fiscal 2019 survey.
The report said despite the tax incentives of regional countries, Singapore still has the advantage in location, language proficiency and financial services.
It said Singapore does not look like it will be dethroned as the prime spot for regional headquarters. – April 11, 2024.
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