Why Stamp Duty Knowledge Impacts Business Strategy

For businesses operating or planning cross-border expansion, particularly within major financial hubs like Hong Kong and Singapore, a thorough understanding of local tax regulations is essential. Among these, stamp duty represents a potentially significant, yet sometimes underestimated, cost that can materially impact investment returns, trading strategies, and corporate structuring decisions.

Both Hong Kong and Singapore leverage stamp duty as a revenue tool and policy instrument, but their approaches differ substantially. In 2024-2025, Hong Kong has moved to reduce barriers for foreign property investors while maintaining stock transfer duties, whereas Singapore has dramatically increased property stamp duties for foreigners while exempting exchange-traded securities. These divergent policies create distinct opportunities and challenges for business owners and investors operating across both jurisdictions.

Hong Kong Stamp Duty: Current Framework

Stock Transfer Stamp Duty

Hong Kong reduced its stock transfer stamp duty rate from 0.13% to 0.1% per party (0.2% total) effective 17 November 2023. This reduction, implemented through the Stamp Duty (Amendment) (Stock Transfers) Bill 2023, returned the rate to pre-August 2021 levels in response to market feedback about transaction costs impacting Hong Kong’s competitiveness as a financial hub.

Key characteristics:

• Both buyer and seller each pay 0.1% of the transaction value
• Applies to all Hong Kong stock transfers executed on or after 17 November 2023
• Stamp duty constitutes approximately 90% of all official transaction fees on the Hong Kong Stock Exchange (HKEX)
• Additional fees include: SFC levy (0.0027% per side), exchange fee (0.005% per side), settlement fee (0.002% per side)

Property Ad Valorem Stamp Duty (AVD)

Hong Kong implemented major reforms to property stamp duty in 2024, eliminating the Special Stamp Duty (SSD) and Buyer’s Stamp Duty (BSD) that previously applied higher rates to foreign buyers and short-term property speculators.

Current AVD rates (effective 28 February 2024):

Important changes:

• No differential treatment between Hong Kong Permanent Residents and non-residents
• No differential treatment between residential and non-residential property
• Corporate buyers and individual buyers pay the same AVD rates
• Amendment effective 26 February 2025 raised the HK$100 flat fee threshold from HK$3 million to HK$4 million

Stamp Duty Group Relief

Transfers of Hong Kong immovable property or stock between associated companies can be exempted from stamp duty if the companies remain associated for at least two years after the transfer. This relief applies only to associated bodies corporate with share capital.

Singapore Stamp Duty: Current Framework

Stock Transfer Stamp Duty

Singapore maintains a 0.2% stamp duty on the transfer of unlisted stocks and shares, calculated on the higher of the purchase price or net asset value. However, this duty provides Singapore with a significant competitive advantage for securities trading:

• No stamp duty applies to shares listed on the Singapore Exchange (SGX)
• No stamp duty on scriptless shares (no transfer document)
• Exemptions available for certain intra-group transfers and corporate restructurings
• Buyer typically bears the 0.2% duty for unlisted share transfers
• Stamp duty must be paid within 14 days (Singapore-executed documents) or 30 days (overseas-executed documents)

Property Buyer’s Stamp Duty (BSD)

BSD applies to all property purchases in Singapore, whether private property or HDB flats, calculated on the higher of purchase price or market value:

Additional Buyer’s Stamp Duty (ABSD)

Singapore’s ABSD represents one of the world’s most aggressive property cooling measures, with rates revised on 27 April 2023:

Critical ABSD rules:

• For joint purchases, the highest applicable ABSD rate applies to all buyers
• ABSD must be paid within 14 days (Singapore) or 30 days (overseas) of the sale and purchase agreement
• Single Singapore Citizens aged 55+ may be eligible for ABSD refunds when downsizing (from 16 February 2024)
• For a $2 million property, a foreigner pays $1.2 million in ABSD alone, plus BSD

Head-to-Head Comparison: Hong Kong vs Singapore

Stock and Securities Transactions

Property Transactions

Key Differences at a Glance

• Equal Treatment (HK) vs Tiered Treatment (SG): Hong Kong treats all property buyers equally since February 2024, while Singapore maintains substantial penalties for foreign buyers and multiple property owners
• Stock Market Competitiveness: Singapore’s zero stamp duty on SGX-traded securities provides a significant cost advantage over Hong Kong’s 0.2% duty on all stock transactions
• Property Investment Barriers: Foreign property investors face minimal additional costs in Hong Kong (max 4.25%) compared to Singapore’s punitive 60% ABSD
• Progressive vs Flat Rates: Hong Kong uses progressive AVD rates, while Singapore combines progressive BSD with flat ABSD rates
• Corporate Structuring: Both jurisdictions offer stamp duty relief for intra-group transfers, but Hong Kong’s equal treatment of corporate buyers provides more flexibility for property holding structures

Business Implications and Strategic Considerations

For Securities Trading Operations

Singapore Advantages:

• Zero stamp duty on SGX-listed securities significantly reduces transaction costs for high-frequency traders and institutional investors
• Cost savings compound for active trading strategies, potentially saving millions annually for large trading operations
• Cash-settled derivatives and ETFs avoid stamp duty entirely, enabling sophisticated hedging strategies

Hong Kong Considerations:

• 0.2% stamp duty remains competitive globally but creates a cost disadvantage versus Singapore for exchange-traded securities
• The November 2023 reduction from 0.26% to 0.2% improved competitiveness but didn’t eliminate the gap
• Firms can minimize stamp duty by trading exempted products: cash-settled derivatives, ETFs, and index-based basket instruments

For Property Investment and Corporate Real Estate

Hong Kong Advantages:

• Foreign investors face no additional stamp duty beyond the 4.25% maximum AVD, making Hong Kong highly competitive for international property investment
• Equal treatment of corporate and individual buyers enables flexible holding structures without tax penalties
• No restrictions on the number of properties owned, facilitating portfolio accumulation strategies
• Intra-group transfers can be executed tax-free with proper structuring and two-year holding requirements

Singapore Challenges:

• 60% ABSD for foreigners makes Singapore property investment prohibitively expensive for most international buyers
• For a SGD 5 million property, a foreigner pays SGD 3 million in ABSD alone, fundamentally altering investment economics
• Corporate entities face 65% ABSD, severely limiting tax-efficient property holding structures
• Multiple property ownership by Singapore Citizens incurs 20-30% ABSD, discouraging portfolio investment even by locals

For Regional Business Structuring

Tax Treaty Networks:

• Singapore maintains over 100 Double Taxation Agreements (DTAs), providing extensive coverage for cross-border structuring
• Hong Kong has 51 tax treaties but is actively expanding its network (17 additional jurisdictions planned)
• Singapore’s DTAs reduce withholding taxes on interest, royalties, and dividends across numerous jurisdictions
• Hong Kong’s territorial tax system largely exempts foreign-sourced income, offering advantages for businesses moving capital across borders without substantial physical presence

Holding Company Considerations:

• For securities holding companies: Singapore offers lower stamp duty costs (0% on listed shares)
• For property holding companies: Hong Kong provides substantially lower acquisition costs (4.25% vs up to 71%)
• For diversified holding companies: Consider bifurcated structures with securities in Singapore, property in Hong Kong

For Family Offices and High-Net-Worth Individuals

Singapore Attractiveness:

• Low-cost securities trading for actively managed portfolios
• Extensive DTA network facilitates global wealth management
• Family office incentive schemes complement stamp duty advantages for financial assets
• Recent ABSD refund provisions for seniors aged 55+ downsizing from high to low-value properties

Hong Kong Attractiveness:

• Competitive property acquisition costs for personal residences and investment properties
• No differentiation between citizens and foreigners enables uncomplicated cross-border wealth planning
• Territorial tax system simplifies reporting and compliance for global income
• Strategic location and connectivity to mainland China markets

For Corporate Treasury Operations

Capital Allocation Decisions:

• Treasury operations focused on securities portfolios: favor Singapore for stamp duty efficiency
• Corporate real estate acquisitions: favor Hong Kong for substantially lower transaction costs
• Working capital management: consider stamp duty impact on share pledge transactions (Singapore charges 0.4% on loan amount, max SGD 500)

Corporate Restructuring:

• Both jurisdictions offer stamp duty relief for qualifying intra-group transfers
• Hong Kong requires two-year association period before and after transfer
• Singapore’s “permitted entities” framework includes limited liability partnerships with specific capital structures
• Pre-restructuring tax analysis essential to ensure eligibility for relief provisions

Recent Developments and Future Outlook

Hong Kong Policy Trajectory

Hong Kong’s stamp duty reforms reflect a strategic pivot toward competitiveness and openness:

• February 2024 property reforms eliminated differential treatment, signaling a pro-investment stance following pandemic-era market pressures
• November 2023 stock duty reduction acknowledged feedback from market participants about transaction cost competitiveness
• Expanding tax treaty network demonstrates commitment to international business facilitation
• Future policy likely to focus on balancing revenue needs with maintaining status as a global financial center

Singapore Policy Trajectory

Singapore’s approach emphasizes domestic priorities while maintaining financial market competitiveness:

• Aggressive ABSD rates reflect determination to cool property market and ensure affordability for locals
• Zero stamp duty on SGX securities continues to attract trading activity and institutional participation
• Targeted relief measures (such as senior downsizing provisions) indicate willingness to refine policies while maintaining overall framework
• Future adjustments likely to fine-tune ABSD rather than fundamentally change the tiered approach

Comparative Positioning in 2025 and Beyond

In 2025, the Hong Kong-Singapore competitive dynamic reflects different strategic choices:

• Securities trading: Singapore’s zero stamp duty on listed securities provides a durable competitive advantage that Hong Kong is unlikely to match given fiscal constraints
• Property investment: Hong Kong’s abandonment of foreign buyer penalties creates a stark difference with Singapore’s 60% ABSD, potentially attracting international real estate capital
• Business formation: Tax-sensitive decisions about holding company domicile, family office location, and venture establishment increasingly hinge on stamp duty alongside traditional corporate tax considerations
• Regional role differentiation: Singapore increasingly positions as a securities trading and wealth management hub, while Hong Kong emphasizes property investment accessibility and gateway to mainland China