Hong Kong is rated the most business-friendly Asian city in the region, while Shanghai takes top honors for starting a new business in the next five years, based on the report Asia Pacific Cities Monitor 2008 by real estate consultancy Cushman and Wakefield.

Singapore was named the preferred city for Asia-Pacific corporate headquarters due to its central location and connectivity to other parts of the region, quality of talent and infrastructure, transparency and ease of doing business and quality of life for employees.

In the latest World Bank’s “Doing Business 2009” ranking, Singapore retained top placing for the third consecutive year as the easiest place to do business in the world, followed by New Zealand, the United States and Hong Kong.

Access to markets and availability of qualified talent pool were decidedly the two overwhelming factors influencing business decisions of MNCs in the Asia Pacific, cited the Cushman and Wakefield report.

In Cushman’s survey of 50 multinational companies operating in the region, 37% of respondents selected Hong Kong as the best city to locate a business in Asia, followed by Shanghai and Singapore with 26% each. These three favorite cities are significantly ahead of other Asian destinations.

Kuala Lumpur is the preferred destination in Southeast Asia after Singapore and Mumbai the leading Indian city.

Meanwhile 17% chose Shanghai as the best city to launch a business in the next 5 years, followed by Beijing (14%), Mumbai (10%), Ho Chi Minh, Vietnam (9%), Singapore (7%) and Hong Kong and Tokyo (6%).

Shanghai is currently home to more than 300 domestic listed companies, 180 foreign firms’ regional headquarters, 160 overseas-funded investment companies and 244 multinationals’ R&D centers. The city aims to grow the total number to 3,000 in five years’ time as it aspires to develop the ‘headquarters economy‘.