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Top 5 criteria for picking a country to start a business
In the aftermath of the global financial crisis of 2008, many governments adopted policies that promoted the creation of new business firms. In the United States, for example, the government urged the business sector to take the lead in the country's efforts toward recovery. The European Union, likewise, adopted a strategy that promotes entrepreneurship as a critical element in the EU's goal to be the most competitive region in the world.
The creation of new businesses forms part of business expansion efforts that are necessary to push an economy forward. New businesses mean new jobs, additional tax revenues, more goods and services and, overall, a better quality of life for everyone. Many economists support the idea that promoting entrepreneurship is necessary in attaining growth for a modern economy. There are studies that point out this linkage. There are even researches that say new businesses are the most likely to create new jobs and achieve a level of success better than the existing ones.
Barriers to doing or starting a business can stand as hindrances to the overall economic growth of a country. When investors see that a country's cost of entry is high, they would naturally be reluctant and might even be tempted to look elsewhere. It is therefore important for governments, who look at new businesses as sources of growth, to bring down those barriers.
A World Bank report released on December 2010 noted that among the ways that countries promoted new business registrations was to undertake a reform of their business registration process. This is done by a reduction in costs, number of days, and steps or processes involved. The aim is to entice would be investors with the idea that the government has made starting and operating a business in that country much cheaper, easier and with less hassle.
An investor looking to start a business in a certain country would be interested to know the steps involved during the registration, the related costs, and the amount of time expected. He is also expected to look at the ease of doing business in that country. On a country-to-country basis, the following information can be very useful to him:
- The Number of Start-Up Procedures
In New Zealand, Canada and Australia, there are only two steps that a start-up business has to undergo from registration to starting their operations. In contrast, a new business in Equatorial Guinea has to undergo 20 different procedures.
- Days to start a business
In Australia, a new business can start operations in two days. The next shortest duration is in Canada with three days and Denmark, Iceland, and the United States with five days. At the far end of the spectrum is Haiti where it takes a business 203 days before it can start operating.
- Cost of Starting a Business
Denmark, New Zealand, United States and Sweden are the cheapest among countries in the list with the cost of doing business (as a proportion of GNI per capita) ranging from zero percent to 0.7 percent. The costliest is in Zimbabwe with 1,442.5 % GNI per capita.
- Ease of Doing Business
Singapore ranks number one in terms of ease of doing business, which reflects how conducive the country is to the operation of a business. The ranking is based on a set of indicators developed by the World Bank. Other countries that ranked high included New Zealand, United States, Canada and Hong Kong.
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