Business Registrations

Top 10 Countries to Start a Business

Start a Business

To start a business in a country is not as easy as it sounds. Starting a business depends on many factors. These factors include ease of doing business, access to capital infrastructure, market size, and regulatory environment. Most businessmen and entrepreneurs want to initiate business in tax-haven countries like Monte Carlo and Panama, where they can get significant tax relief. The easiest countries to start a business aren’t necessarily the largest economy. This article discusses the top 10 countries which are the most favourable to start a business and factors upon which the ease of doing business depends upon.

Factors Which Affect the Ease of Doing Business in a Country – Start a Business

Following are some factors which affect the ease of doing Business in a Country:

Ease of Doing Business Index

Every year, the World Bank releases its “Ease of doing business” report, which ranks the countries on the basis of 10 key indicators. It is a ranking system that measures the ease of starting and running a business in a country. Each indicator mentioned is given a score based on the ease of doing business in that area, and these scores are combined together to give an overall ranking. The higher the ranking, the easier it is to do business in that country. These 10 indicators are given below:-

  • Starting a business initially
  • Dealing with compliances and construction permits
  • Registering property and getting electricity
  • Getting credit
  • Protecting minority investors
  • Paying taxes and trading across borders
  • Enforcing and executing contracts
  • Resolving Insolvency

This “Ease of Doing Business” index is generally used by businessmen, investors and governments to access the business environment of different country and also able to identify the grey areas in which improvement is necessary.

Apart from this index, several other varieties of factors, when combined enough, are responsible for doing business in a country easily. These factors include regulatory environment, infrastructure, access to credit and capital, the quality of the workforce in an organisation or business, and the size and stability of the economy.

READ  Brief on business valuation methods in India

The regulatory environment factor generally involves compliance-related factors such as the ease of starting a business, obtaining permits, registration of property, paying taxes and easier resolution of disputes. Other factors which determine whether a country is favourable for doing business are infrastructure factors. These factors include the quality of roads, ports, airports and telecommunication networks etc. These factors are really important for the growth and expansion of a business.

Access to credit and capital is also one of the most important factors when it comes to starting a business. To start a business, investing in credit and capital are necessary. These factors include the availability of bank loans, venture capital, ease of obtaining credit, etc. Apart from these factors, other factors like quality of the workforce, which includes factors like level of education, qualifications of employees working in a company or in an organisation, training, language skills and productivity and efficiency of workers, also significantly determine the ease of doing business.

Size and stability of the economy of a particular country, market conditions, market size, economic growth rate and political stability. These factors also determine the success and expansion of a business. A country having a stable economy and favourable market conditions is easier to do business with than a country having an unstable economy and unfavourable market conditions.

Top 10 Countries Which Top the Ease of Doing Business Index – Start a Business

Given below are the top 10 countries which provide favourable conditions which make these countries suitable to start a business. These countries are mentioned below:-

  1. Switzerland

Switzerland is known to be a very stable country both financially and economically. The swiss confederation has the second-highest GDP per capita. Swiss currency has a high value as compared to the currencies of other countries. The stability of this country is determined by the stable political structure and outcome. Because of its stability and high living standard, Switzerland tops the list of ease of doing business.

  1. Panama

Panama uses the US dollar as its currency which gives it an edge over other countries. The stable and business-friendly environment of Panama makes it suitable and favourable for doing business. The country also has a favourable tax regime system, an open market economy and a trusted banking system. All of these factors are favourable for a business to thrive.

  1. Finland
READ  Insurance Company Registration Procedure

Finland has been ranked number 1 in 2021 by the Global Innovation Index[1] for ease of doing business. According to a 2019 report, Finland is considered the best in the financing, security and macroeconomic stability and predictability. Finland is also considered to be one of the highest politically stable countries and is known for its solid infrastructure, skilled workforce and labour and innovation.

  1. Luxembourg

Luxembourg is a country situated in Europe and is known for its highly developed and wealthy markets. The country has a highly skilled workforce and labour and favourable policies, which makes operating any business very easily. It also has a vigorous and diversified economy. Luxembourg also provides a high standard of quality life which makes the running of a business easier. It also provides an open economy, and its taxation policies are very business-friendly, which makes Luxembourg one of the most business-friendly countries.

  1. Norway

Every factor in Norway, from its leadership to innovation, is positive in the context of doing business. Norway, one of the Scandinavian countries, has a stable and strong economy which provides businesses with a suitable environment to foster and thrive. It is also a highly innovative country and has one of the top GDPs per capita in the world. Norway is also rich in natural resources and is highly industrialised in nature.

  1. Denmark

Denmark has high GDP per capita and also provides a safe and favourable environment for conducting business. The world bank, in its ranking, has placed Denmark as the 3rd most business-friendly in the world. Business in Demark can be operated and conducted at a very low cost as compared to other countries. It also provides a strong and stable economy with high and decent living standards.

  1. Singapore
READ  Applicability of Shop and Establishment Registration

Singapore scored 2nd rank in the world’s most business-friendly countries. One of the most famous tourist destinations, the country is quite popular in attracting global and foreign investments from all over the world. Singapore is also referred to as a business hub. It has favourable tax policies, a global and affluent economy, a low corruption rate, and a developed infrastructure which gives businesses an appropriate and favourable atmosphere to thrive.

  1. Indonesia

Indonesia’s geographical location and high exportation rate provide it with a great advantage for doing business. Indonesia also shares its boundaries with many countries with great natural resources and cheap labour and workforce, which makes it another favourable country known for its ease of doing business. The country’s population is also an added advantage for the purpose of doing business.

  1. New Zealand

New Zealand has everything to offer when it comes to the ease of doing business. It attracts investments from all over the world. It proves a perfect work-life balance, stable economy, high and decent living standards, favourable tax regime and a robust economy. New Zealand has been consistently ranked as one of the top countries for doing business. It is considered to be one of the most business-friendly countries.

  1. Sweden

Sweden is one of the most highly developed Scandinavian countries. It provides many favourable conditions for a business to thrive. These conditions include a stable economy, stable political environment, favourable tax regime, skilled and highly qualified workforce, trusted banking sector and efficient manufacturing industries etc. Sweden also provides a high living and a decent living standard.

Conclusion

In brief, it can be said that operating and conducting a business successfully depends on a variety of factors. These factors include market stability, tax policies, infrastructure facilities etc. It depends on an individual’s personalised needs and desires as to which country is suitable for him to do business.

Also Read: How to Start a Profitable Small Business in India

Trending Posted

Get Started Live Chat