When considering global expansion or relocation, the tax rate is usually the first concern. However, setting up a company in a country with low corporate tax does not necessarily mean the owner's personal take-home pay will increase in the same proportion. This is because the location and scope of taxation change depending on where the company conducts business, how profits are received, and where the shareholders live.

Based on public data available as of September 17, 2026, this paper compares the structural frameworks of the tax systems in Japan, Singapore, Hong Kong, South Korea, Taiwan, and Thailand. Hong Kong and Taiwan are treated as comparative tax jurisdictions. This is not a comprehensive overview of the entire Asian region, nor is it a tax amount ranking based on a uniform income level. Without assuming the application of special investment incentives, rather than a flat display of current tax rates, the focus is placed on the differences that influence decisions regarding market entry and migration.

The first thing to look at is whose income and which income.

There are three stages of comparison. First, the business profits of local subsidiaries. Second, the personal income from receiving those profits as salaries, dividends, etc. Third, consumption taxation on the sale of goods and services. If you cram these three into a single tax rate table, you end up comparing different tax bases as if they were the same number.

The table does not show calculation results, but rather points to be checked. Is it necessary to include local taxes in the Japanese corporate burden?Ministry of Finance Effective Corporate Tax Rate ComparisonAs can be seen from the note, if the comparison tax rate is only the national tax, the magnitude cannot be determined as is.

In Japan, residents other than non-permanent residents are, in principle, subject to taxation on all worldwide income. The mere fact that income was received in a foreign bank does not exclude it from the scope of taxation. South Korea also first determines resident status based on having a domestic address and a period of stay of 183 days or more. The distinction between "using a foreign account" and "moving one's tax residence" serves as a basis for comparison.National Tax Agency "Individuals who are taxpayers"、National Tax Service of Korea "Classification of Residents"

Examples of basic tax rates: Singapore and Hong Kong

To help you get a sense of the numbers, the basic tax rates for both regions are shown below. These are based on public systems confirmed as of September 17, 2026, and do not represent the final tax burden reflecting deductions, refunds, preferential tax rates, or additional taxes for large corporate groups.

Hong Kong's two-tiered system applies to the 2018/19 tax year and subsequent years, with restrictions such as generally only one related entity being eligible. Because Singapore has partial tax exemptions and annual corporate tax rebates, multiplying the accounting profit by 17% does not simply give the tax payable amount.IRAS "Corporate Tax Rates and Exemptions"、Hong Kong IRD "Profits Tax"、Hong Kong IRD "Two-Tiered Tax Rates FAQ"、IRAS "GST General Guide"

Singapore and Hong Kong do not have the same system either.

Regarding individuals in Singapore, IRAS explains that foreign-sourced income received by residents is tax-exempt in principle. However, there are exceptions, such as income through a partnership in Singapore. Simply being paid by a foreign company does not automatically make it foreign-sourced income. It is necessary to first verify where the work was actually performed.IRAS "Income Received from Abroad"

For corporations, the receipt of foreign-source income and tax exemption requirements are considered separately. Individual explanations cannot be directly transferred to an asset management company. In addition, the place of effective management is relevant to a company's tax residency. Having a certificate of incorporation is not the same as being a resident corporation eligible for the benefits of a tax treaty.IRAS "Corporate Taxable Income"、IRAS "Corporate Tax Residence"

Hong Kong fundamentally relies on a system that emphasizes the source of business profits. On the other hand, for certain foreign-sourced income received in Hong Kong by constituent entities of multinational enterprise groups, there are Foreign-Sourced Income Exemption (FSIE) regime provisions under which economic substance and other factors become issues. The assumption that "all overseas income of a Hong Kong corporation is tax-free" is overly simplistic.Hong Kong IRD "territorial source principle"、Hong Kong IRD "Foreign-sourced Income Exemption Regime"

Taiwan and Thailand have different rules for taxing foreign income.

In Taiwan, while the taxable income of companies headquartered within the jurisdiction includes offshore income as well, the foreign income of individuals requires consideration under the alternative minimum tax. A distinction must be made between the explanation that it is "excluded from regular individual income tax" and the explanation that "no final additional tax liability will arise."Taiwan Ministry of Finance Income Tax Act、Taiwan Ministry of Finance: Statistical Commentary on the Minimum Tax

In Thailand, how foreign-source income is treated when brought into the country is important. The Revenue Department's guidelines distinguish between foreign-source income generated in 2024 and later, and income from prior years. Not the entire deposited amount is necessarily income, and the residency status in the year the income arose is also subject to verification. When remitting funds from an account where old deposits, investment returns, and principal are mixed, being able to trace the deposit history serves as the starting point for determination. This article does not determine tax exemption status, including individual tax exemption measures or amendment proposals.Thailand Revenue Department: Guide to Foreign-Sourced Income

Consumption taxation is relevant even if there is no profit.

Checking for consumption tax can sometimes be too late once you are in the black. This is because sales destinations, transaction types, registration obligations, and input tax deductions are directly linked to invoices and cash flow. Singapore has GST, while South Korea and VAT in Thailand (South Korea's introduction ofHistory of the National Tax AgencyFor example, Taiwan has a business tax similar to a value-added tax. While Hong Kong does not have a general VAT or sales tax, this does not mean that individual transactions are completely tax-free.IRAS GST、Thai Revenue Department "VAT"、Taiwan Value-Added and Non-Value-Added Business Tax Act、Hong Kong Government Investment FAQ

Include the funding exit in the comparison table for owner-managed businesses.

For example, when a foreign subsidiary retains its earnings versus when it distributes those earnings as dividends to shareholders living in Japan, the endpoints of the comparison are different. The former compares funds available for reinvestment, while the latter compares funds available for personal use. Mixing the two leads to mistaking the difference in the timing of taxation caused by retention for a difference in the permanent tax burden.

The order of consideration is the reality of the business, corporate taxation, profit payout, individual residence, and the adjustment for double taxation. Finally, the maintenance costs for accounting and tax filing are added. The tax rate table is just a reference material along the way. Only by concretely placing the activities of the company and the family does the comparison become not "which country is advantageous," but "how much remains under this plan."

This paper is a general explanation of institutional comparison. Individual tax amounts vary depending on income classification, ownership relationship, residency status, applicable fiscal year, tax treaties, and other factors.