Now that we know what to look for in a country to determine whether or not it is great for doing business, let’s look at some of the most lucrative countries on which you should focus (in no particular order):
UNITED KINGDOM
GDP: $2.6 Trillion as of December 2017
A Quick Glance
- GDP Growth: 1.8%
- Per-Capita GDP: $39,000
- Public Debt/GDP: 89%
- Population: 66M
- Unemployment: 4.9%
- Trade Balance/GDP: -4.4%
- Inflation: 0.7%
This country topped Forbes’ 2018 list of top countries to do business in. And with good reason!
They say numbers do not lie and as things stand, the United Kingdom, despite all that Brexit uncertainty, remains one of the best countries in which to start a business.
But apart from the beautiful economic indicator figures, other factors come into play; factors that propel the United Kingdom to the top. These include:
- Ease of incorporating a company: In the UK, this can be done within an hour and will cost you £14 or about $20.
- Tax benefits: The British government offers various tax-related benefits for founders, investors, and even employees that make the country quite attractive from a financial point of view.
Additionally, the UK has one of the lowest corporate tax rates among the G20 countries and as such is quite attractive to business investors.
SINGAPORE
GDP: $313 Billion as of December 2017
A Quick Glance
- GDP Growth: 2%
- Per-Capita GDP: $56,000
- Public Debt/GDP: 113%
- Population: 5.6M
- Unemployment: 2.1%
- Trade Balance/GDP: 19%
- Inflation: -0.5%
According to the World Bank, Singapore presents one of the healthiest environments to start a business. Apart from the excellent economic indicator figures shared above, the country also has the following going for it:
- It is politically stable
- It is one of the wealthiest in the world meaning the populace has a lot of disposable income
- It has a strong labor force
- It does not impose any dividend or capital gains taxes
- It has many free trade agreements that open up huge markets
- You can easily register and start your business online
Singapore also offers affordable airfare to her neighboring countries. This means that, as a business owner, you will have affordable access to other exploratory markets such as Thailand, Indonesia, Philippines, and Malaysia.
NORWAY
GDP: $399 Billion as of December 2017
A Quick Glance
- GDP Growth: 1.1%
- Per-Capita GDP: $75,000
- Public Debt/GDP: 36%
- Population: 5.3M
- Unemployment: 4.7%
- Trade Balance/GDP: 5%
- Inflation: 3.6%
One of the best things about Norway is that communication with the government can reliably be done online. You can easily register a company, and you will also find that complying with tax laws in this country is a rather straightforward process.
Another added advantage of starting a business in Norway is the fact that they are a highly technologically advanced nation with a majority of Norwegians very willing to adapt, as well as pay, for new technology.
This means that you will easily find highly skilled labor especially in the fields of IT, design, finance and music technology.
Other things that make this nation one of the best for doing business include:
- The populace is generally wealthy meaning they have a lot of disposable income
- It is politically very stable
- It has a well-developed communication and transport infrastructure
- It is a big player in the EU and has long-standing trade ties with other EU nations
Norway is a very transparent country and has minimal levels of corruption. For these reasons, Norway makes a very attractive option for any straightforward business investor looking to build an honest business.
NEW ZEALAND
GDP: $211 Billion as of December 2017
A Quick Glance
- GDP Growth: 3.6%
- Per-Capita GDP: $44,000
- Public Debt/GDP: 33%
- Population: 4.8M
- Unemployment: 5.1%
- Trade Balance/GDP: -2.8%
- Inflation: 0.6%
Apart from the economic indicator figures given above, several other advantages make this nation an attractive destination for businesses:
- It has a skilled labor force that is not too expensive
- There are no payroll, capital gains or social security taxes involved
- Incorporating a business takes a day while registering a property could take as little as two days
It also has a wealth of information readily available online through Statistics New Zealand that can help you run thorough research into whatever industry you would like to invest in. This immediately gives you an added advantage as you will get to learn about the culture, spending habits of the population and how well businesses in your niche are doing.
HONG KONG
GDP: $339 Billion as of December 2017
A Quick Glance
- GDP Growth: 2%
- Per-Capita GDP: $46,000
- Population: 7.4M
- Trade Balance/GDP: 4.6%
- Unemployment: 2.7%
- Inflation: 2.6%
Hong Kong’s economy has been growing steadily for the past few decades which is indicative of the practical and economically sound business policies being enacted by the region. As a free market economy, Hong Kong is highly dependent on international finance and trade.
It has a highly educated workforce and a brilliantly designed and constructed transport and communication infrastructure. Hong Kong’s economy has been doing so well that it has even established itself as the go-to stock market for Chinese companies that want to trade abroad.
On the other hand, because Hong Kong has limited natural resources, it imports almost everything from food to raw materials. This might sound a bit discouraging to budding industry titans, but remember that Hong Kong imposes no tariffs on imported goods save for four: hydrocarbon oil, hard alcohol, methyl alcohol, and tobacco.
MEXICO
GDP: $1.1 Trillion as of December 2017
A Quick Glance
- GDP Growth: 2.3%
- Per-Capita GDP: $8,500
- Public Debt/GDP: 50%
- Population: 129M
- Unemployment: 3.9%
- Trade Balance/GDP: -2.2%
- Inflation: 2.8%
Considering the high crime rate in many parts of Mexico, not very many investors would immediately jump onto the idea of starting a business there. However, despite these challenges, Mexico still presents one of the best possible destinations in which to start a business.
This is mostly thanks to the extensive business registration reforms that have taken place in the country. These reforms have largely led to the increased registration of businesses overall.
It is now much easier to register and start a business in Mexico. It only takes about eight days to have your business up and legally running in the country.
Couple that with the fact that it has a ready and willing labor force that is considered affordable when compared to other countries in this list and you have Mexico as a wonderful destination overall.
It also has free trade agreements with 46 different nations thus opening enormous potential markets for any investors willing to take part in the large manufacturing-oriented economy.
SWITZERLAND
GDP: $679 Billion as of December 2017
A Quick Glance
- GDP Growth: 1.4%
- Per-Capita GDP: $80,000
- Public Debt/GDP: 33%
- Population: 8.5M
- Unemployment: 3.3%
- Trade Balance/GDP: 10.5%
- Inflation: -0.4%
With an unemployment rate of only 3.3%, a burgeoning economy and a notoriously stable political climate, Switzerland is without a doubt one of the best countries in the world for really anything except the tropical weather.
It has a highly skilled workforce that is ready and willing to work (although it may not be as affordable as it is in other countries on this list).
The country benefits from a highly developed service sector plus a manufacturing industry that has specialized in high-technology and knowledge-based production. It also has one of the world’s most sophisticated financial sectors which makes it perfect for safe, calculated and steady investment.
Apart from the excellent numbers indicating economic growth and prowess, Switzerland also has other factors that make it an attractive destination for starting a business. These include:
- A very transparent legal system that is easy to navigate
- Consistent economic and political stability
- Low corporate taxes
- Efficient capital markets
- Exceptional communication and transport infrastructure
Plus, it is a trusted and valued member of the EU which opens up some of Europe’s most advanced and gigantic markets for investors.
CANADA
GDP: $1.6 Trillion as of December 2017
A Quick Glance
- GDP Growth: 1.5%
- Per-Capita GDP: $43,000
- Public Debt/GDP: 99%
- Population: 37M
- Unemployment: 7%
- Trade Balance/GDP: -3.3%
- Inflation: 1.4%
Even though the Great White North has high living standards, the country has made impressive gains when it comes to its manufacturing, service and mining sectors. These gains have greatly helped to transform the nation from a largely rural economy into one that is primarily urban and industrialized.
It also has a huge oil and natural gas sector ranking it third in the world in oil reserves behind Venezuela and Saudi Arabia.
Canada enjoys extremely balanced bilateral trade with the US which opens up a huge market for business investors looking to tap into the US through Canada.
The country has a very stable political climate, excellent health care, and a substantially skilled labor force. All of these make it a lucrative destination for business investors looking to take advantage of the service or industrial sector.
IRELAND
GDP: $330 Billion as of December 2017
A Quick Glance
- GDP Growth: 5.1%
- Per-Capita GDP: $69,000
- Public Debt/GDP: 73%
- Population: 4.8M
- Unemployment: 7.9%
- Trade Balance/GDP: 3.3%
- Inflation: -0.2%
This small, trade-dependent nation has a strong economy that has gone through the ringer in recent times but has come out stronger for it.
After officially exiting the EU-IMF bailout program that saw Ireland stabilize its economy through the economic crisis of 2007, the country has seen rapid economic growth. As such, the government has increased public spending and drastically lowered some taxes which is good news for business owners.
Since the collapse of the construction sector (thanks to the same economic crisis) Ireland has become increasingly dependent on exports for economic growth. This makes it one of the best destinations for any business owner looking to set up a manufacturing company geared towards export-goods production.
The country has a sizeable labor force despite its relatively small size; is experiencing an unprecedented period of economic growth (with GDP exceeding 26% growth in 2015) and is politically very stable.
GERMANY
GDP: $3.6 Trillion as of December 2017
A Quick Glance
- GDP Growth: 1.9%
- Per-Capita GDP: $43,000
- Public Debt/GDP: 68%
- Population: 83M
- Unemployment: 4.2%
- Trade Balance/GDP: 8.3%
- Inflation: 0.4%
As one of the largest economies in the world and Europe’s largest, Germany is a wonderful investment destination and a leading exporter of vehicles, machinery, household equipment, and chemicals.
But the biggest selling point for this country is that it has a huge, highly-skilled and highly-educated labor force. Although this labor force is not as affordable as is the case in many countries on this list, there are many positives Germany offers.
But despite all that, the economy suffers from low levels of investment which makes it a ready and ripe market for foreign investors willing to take on the wages commanded by the available labor force.
As a member of the EU, Germany enjoys strict standards of manufacturing and production. Starting a business there will not only give you a chance to exploit the largely well-funded markets in the EU, but it will also give you an opportunity to raise your standards of production. Standardized across the board, this will give your brand a highly competitive edge in the global market.
OTHER GOOD COUNTRIES
Depending upon how you define them, there are approximately 200 countries in the world. While these ten countries we’ve highlighted represent great opportunities, there are other wonderful countries. Where else should you look to start a new business?
- Australia
- Austria
- Belgium
- Denmark
- Estonia
- Malaysia
- Netherlands
- Sweden
- Taiwan
- USA
Political and economic stability are some of the things that make these countries the best to start a business in. They also largely have excellent governance with favorable policies that are not only welcoming to business investment but actually encourage innovation and entrepreneurship.
This, coupled with the availability of disposable income for the locals as well as favorable trade agreements with other, equally large markets in their regions, make them perfect for business investment.
THE WORST COUNTRIES TO START A BUSINESS IN
Just as there are countries in this world that are highly favorable for business investments, there are countries that simply do not encourage this sort of thing. Many of these countries are mired in:
- Rampant corruption
- Political instability
- Restrictive, if not exploitative, foreign investment policies
- Woeful security and safety issues
And to top it all off, many of them have a largely unskilled labor force despite the fact that it is affordable. With that in mind, here are some of the worst countries to start a business in.
CHAD
GDP: $9.9 Billion as of December 2017
A Quick Glance
- GDP Growth: -6.4%
- Per-Capita GDP: $660
- Public Debt/GDP: 59%
- Population: 15M
- Unemployment: 5.9%
- Trade Balance/GDP: -9.2%
- Inflation: -1.1%
The problem with Chad is that it is landlocked and almost everything has to be imported thus resulting in excessive costs of transportation and an unhealthy dependency on neighbors. Another major issue is that, although oil is one of their biggest commercial commodities, almost the entire country is serviced by one refinery which often breaks down and results in shortages and frequent business stoppages.
The available labor force, although affordable to the point of being cheap, is unskilled and largely uneducated. Apart from the above highlighted abysmal economic indicator numbers, other issues are plaguing Chad, making it one of the worst countries in the world to start a business. These issues include:
- Limited communication and transport infrastructure
- Elevated levels of corruption even in government positions
- Extensive government bureaucracy
It remains a high debt risk country with extremely elevated levels of corruption, very little skilled labor and inadequate infrastructure. Starting a business here, although possible, will be frustrating at best.
HAITI
GDP: $8.5 Billion as of December 2017
A Quick Glance
- GDP Growth: 1.4%
- Per-Capita GDP: $770
- Public Debt/GDP: 34%
- Population: 11M
- Unemployment: 40.6%
- Trade Balance/GDP: -0.9%
- Inflation: 13.4%
There was a time when Haiti stood for warm ocean water and beaches. But ever since the 7.0 magnitude earthquake of 2010, Haiti has become something of an emergency state. This is not to say that its economy was that good before, but the earthquake made things much worse.
Although this is a free market region, there are certain aspects of its governance and its population that make it difficult for investors to do business here. These include:
- High levels of government corruption
- Political uncertainty and instability
- High levels of poverty
- Low levels of education
- Vulnerability to natural disasters such as earthquakes and tsunamis
Haiti is currently the poorest country in the western hemisphere. About 60% of its population lives below the poverty line which means they do not have the disposable income to buy your products.
Even though the country enjoys tariff-free exports to the United States for almost all of its exports, it is the lack of skilled labor and vulnerability to natural disasters that make this a terrible place to build a business. Plus, it has almost no transport and communication infrastructure set-up thanks to the 2010 earthquake.
LIBYA
GDP: $50 Billion as of December 2017 (although GDP has been fluctuating wildly for the last decade)
A Quick Glance
- GDP Growth: -3%
- Per-Capita GDP: $7,800
- Public Debt/GDP: 7%
- Population: 6.4M
- Unemployment: 30%
- Trade Balance/GDP: -22.4%
- Inflation: 27.1%
Libya used to be an African powerhouse. But ever since the Arab Spring that burned through most Islamic nations in Africa and the Middle East back in 2014, Libya has been reduced to little more than just rubble.
The country is almost entirely depended on oil and gas exports, but since 2015, rival forces looking to control the largest oil terminals in the country has led to armed conflict which has, in turn, greatly impeded the country’s crude oil production.
It is due to that very armed conflict between rivaling factions that makes this country uninhabitable for business. The lack of infrastructure, the lack of food and security for the people and the lack of a stable labor force all make Libya not conducive to business investments at the moment.
OTHER DIFFICULT COUNTRIES TO DO BUSINESS IN
Perhaps the one that stands out the most is The Central African Republic. The main problem with this country is that there is little to almost non-existent political participation by the public. This means that the country is run by a political class that enacts retrogressive and unfavorable policies. There is also widespread violence, great unrest, political instability and poor access to education and healthcare. The labor force here is highly unskilled, and the infrastructure is almost non-existent.
Other countries that are not very conducive to business investments for one reason or another include:
- Afghanistan
- Gambia
- Mauritania
- Togo
- Venezuela
- Yemen
- Zimbabwe
Most of these countries have a high inflation rate, extreme poverty rate, and a lack of trained or skilled labor force. For some, this current situation has been brought about by recent conflicts and civil war while others have made it onto this list due to poor governance and corruption. But whichever way you choose to look at it, starting and operating a profitable business in any of these countries will not only be a tall order; it will be nearly impossible.
TIPS FOR STARTING A BUSINESS IN ANOTHER COUNTRY
Although technological advances have made it considerably easier to find out what it would take to start a business in a foreign country, the actual undertaking is still a daunting task. Imagine how difficult it is to start, run, and build a profitable business in your own country. Now multiply that a few times to get a clearer idea of how difficult it would be to start one in a foreign nation.
For starters, you will have to comply with an extensive list of local and foreign regulations as well as dealing with things like foreign exchange rates and language barriers. All of these are instrumental and could very well ruin your prospects. Here are some tips that you should consider before starting a business in another country:
- Research the business practices that apply to your niche
- You need to familiarize yourself with the laws, regulations, banking tendencies, and tax laws that govern whichever country you want to invest in as a business owner. You need to have local lawyers on the ground; people who will give you a clear picture of what it takes to incorporate your business, acquire the right properties, pay the labor force, and make an actual profit.
- Have a clear grasp of the country’s political climate
- One of the most consistent issues with the countries that have been named as the worst for business is the fact that they all have a volatile political climate. The exact opposite is true for the countries that have been named as the best to start a business in; they all have very stable political climates. A country’s political climate largely determines the kind of economic growth it could enjoy as well as the financial policies that will govern it for a fiscal year. It also indirectly determines its levels of corruption as well as the bureaucracy involved in starting a business.
- Study cultural differences
- A bikini manufacturer may have a huge market share in the most liberal and westernized countries, but you cannot objectively expect the same business to have as much success in a conservative Muslim country. You need to know the cultural differences that govern whichever country you want to invest in. What might be big business in the US just might not sell as well in China — and vise versa. You also need to study the different social customs involved as well as language barriers. In some countries, a deal is not done unless the parties involved have shaken hands, had tea, or taken a steam bath together. These are just some of the peculiar cultural differences that you need to keep an eye out for when going international.
- Get local guidance
- You will need to hire lawyers from your home country as well as your destination country. But you will also need to get local guidance from businesspeople and local members of the workforce. These are people who know the ins and outs of running and working in business in your destination country of choice. They will teach you things that you cannot read in a report or online. They will show you how to work with the local population to get your business up and running smoothly. And the closer they are aligned to your niche, the better.
CONCLUSION: GOING ABROAD IS DIFFICULT BUT WORTHWHILE
Starting a business in a foreign country is an excellent idea for all the right reasons (new markets, more advanced technology, better labor force, and cheaper tariffs). But, before you can enjoy all this, you need to find the right country in which to start that business. This guide gives you a good idea of where to start and which countries to avoid.
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