Singapore and Hong Kong, with their low corporate tax rates, have started to hove into view on the radars of multinational companies that are looking to lower their tax burdens through profit shifting.

Profit shifting is a perfectly legal way of moving the earnings of an MNC to a low-tax destination to avoid the clutches of a high-tax regime.

Ideally, MNCs prefer tax havens with zero corporate tax rates such as Cayman Islands and British Virgin Islands for a profit-shifting operation. But with several countries, including India, looking to tighten tax laws with respect to these havens to prevent revenue leaks, Singapore and Hong Kong have emerged as new-found alternatives.