Countries ranked by ease of starting a business
doingbusiness.org
doingbusiness.org
In fact the only trouble I had at all was that PayPal wouldn't let me sign up with a business that had been started that day - I had to wait until the day after to start taking payments.
One of the few government interactions I've ever had that left me in a better mood afterwards.
Also, I was surprised by some of the rankings. I'd have expected UAE and Israel to be higher than Germany and the Scandinavian countries for instance, but maybe I'm biased by experiences with small sample size. I've had German friends complain to no end about the Kafka-esque bureaucracy of the country, and generally I've had Israelis and expats in the Emirates tell me doing business is easy in those places.
Unfortunately, this makes the list less pragmatically useful for choosing places to live abroad... I wonder if there's any reliable info like this for how well treated you are as a foreigner doing business in a country.
But I am also wondering how accurate this list is. And what qualifies as a "business"? Here in Thailand, many small businesses don't requite any form of legal entity and opening a small shop for example would be as easy as renting some space, putting in inventory and open your doors.... doens't get much easier then that. Imagine trying that in the US or UK... The ease of opening a small business here in Thailand beats any country that comes before Thailand on that list...
Could you elaborate on how it went with your business? I'd like to learn more because I like some parts of Thailand, but I always heard differently. Here's the top google result, for instance:
"A foreigner can form or buy a Thai company, and even be the sole director of it, but Thai citizens must jointly own at least 51% of its shares – meaning a majority is technically under Thai control. Currently it is possible to allocate shares to several unrelated people, who could have no combined effect on the company's business, and this can be arranged by the lawyer, but along with most things connected with business in Thailand, there are considerable risks involved."
http://www.retire-asia.com/thaibiz.shtml
Actually, the whole article is generally very cautionary and negative against a foreigner owning a business in Thailand, which jives with what I've heard people who spend time there say.
Maybe it's only businesses with real estate ownership or leases that come under these terms? EX, no real estate, then don't worry about it? I think regardless, you'd be fine working from your laptop.
Anyways, I'm curious if you want to elaborate more. International business law is one of those things that every little bit you know becomes more helpful in understanding the broad picture of how markets work, imports/exports work, etc. It's something I try to pay attention to, research, and ask questions about when I'm visiting a place.
As far as our own company goes: we registered our first company a few years (2?) back and when we went into the process, we were also still under the impression that the foreign shareholders can only hold up to 49% of the shares. However, we quickly found out it was indeed possible for foreigners to fully own the company (according to the government official the regulations changed about a year before that). But we also quickly learned that this route would mean tons more paperwork and it would become more costly. We also needed to present our paperwork to the BOI, pay extra fees and hope they would accept the paperwork. And according to the government official, we would expose our company to tighter control from the government (which would probably mean more "tea money" as well). So, in the end we decided against full foreign ownership, although it was an option we considered.
I realize many people are negative against owning a business here Thailand, perhaps due to bad experiences. I can only speak for myself (and a few relations who enjoy doing business here as well). Maybe I should mention I don't actually do business here, we pretty much only work with customers abroad. I love living and working here and wouldn't want it any other way for the time being!
One would hope that it would be a "real", limited liability company of some kind, that exists as a legal entity separate from that of its owners.
(Edit: I mean in terms of the survey, not that people without limited liability companies aren't "real" businesses)
That takes nothing away from small businesses that don't need that form of incorporation. Of course they are businesses - I was just talking about the survey itself.
All in all, it takes about a morning to have a legal operating funded company up and running.
Of course, revenue is another story :).
The numbers for 'enforceability of contracts' and 'paying taxes' are absurd. Puts the rest of the results in doubt.
I guess that's why NZ ranks #1 and Japan ranks #91 for getting started.
I knew this and I was absolutely amazed by the amount of time it took to get my health insurance, pension, and taxes squared away when I went full-time: 3 hours. Two hours of that was bike riding to and from city hall.
I'm a start-up founder based in Tokyo and the most popular questions I receive is, why are you founding a start-up focused on a market outside of Japan? Market research aside and my being American who will be returning to the US some time in the very near future, Japan is not the easiest company to start and run and successful small operation in. A Rank of #91 for such an advanced country is an indication of the system being broken and burdensome.
The Deeds Office (land registry) has also has had fraudlent land transfers going through, and although stealing land is more difficult that hijacking a company, it has happened, with complicity between crooked lawyers and corrupt officials.
In most cases these hijackings, of land, and of companies, have been reversed by courts, but the time and expense of going to court could cripple a small business.
If you start a business in South Africa, and decide to incorporate, you should make sure you verify directors regularly, watch your business bank accounts closely, and hope that the government sorts out the mess (there are new controls that are being introduced already at CIPRO).
The Startup: http://www.gameplanapp.com
I have no affiliation with them, just been reading their blog
There's a lot more than that, e.g. you have to be careful about what you write and perhaps say about the government.
I live here. I see lots of curses in facebook and websites about the government and I mean really really mean curses, personal attacks and so on. I complain lots about the government. And to clarify, there is a line which you don't cross, which is the religious line and accusing the govt of corruption without proof. It is rather simple.
I don't really see how young people doing startups care about that? Just respect your neighbours and their religion, is it hard to do? If you have proof that someone is corrupted, just report it. (Btw, some govt guy just got charged for a huge corruption case.) Having a death penalty doesn't mean the whole country is one brainwashed crazed population looking to execute anyone. In fact there are so many foreigners here at any startup event that the locals are beginning to seem like the minority.
Yes, this small place(market) has lots of problems and it is definitely not disneyland. But to say it is a bad place just because of death penalty or lack of freedom to insult other religion is just ridiculous. Just look beyond political nonsense and journalistic opinions.
We contracted a law firm specialising in foreigners running companies here in Spain. They're really good, but the amount of running around I have to do is still huge and some things really are impossible (e.g. getting a foreign contract talking about monetary amounts notarised). I would certainly never incorporate here by choice.
For example, starting a business in the UK takes an hour or so (Fill out a form online). But it's listed here as taking 13 days, and thus UK is ranked 16th for starting a business.
E.g. it takes half a morning to open a company. But it takes up to two weeks to get all the approval documents mailed to you.
In any case, this info is not for tech-startups, its statistics for opening 'real' businesses.
From the book: "a country of 7.1 million, only 60 years old, surrounded by enemies, in a constant state of war since its founding, with no natural resources— produces more start-up companies than large, peaceful, and stable nations like Japan, China, India, Korea, Canada, and the UK? How is it that Israel has, per person, attracted over twice as much venture capital investment as the US and thirty times more than Europe?"
These are rankings compared to other nations, the scale is not linear. It's easier to startup a business in Iceland and more difficult in Norway, the two counties on either side of Israel.
When we started our company it only took 1 day. We did pay a lawyer to do the work but the amount was quite low (though I don't remember exactly how much).
4 - United States
5 - United Kingdom
8 - Canada
15 - Japan
25 - Germany
31 - France
78 - Italy
120 - Russia
With the exception of Russia, which has its roots in communism, Italy is by far the worst G8 country you could start a business in.
Let's give China or <strike>Spain</strike>Brazil a shot
NPR story: http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake...
Note that the UK produced Adam Smith and, to a nontrivial degree, the US, and Canada. The culture and early government of the US in particular was notably influenced by the ideas of Adam Smith as well. What Smith called "economic individualism" is pretty much the foundation of a strong economy, and to the extent that we stray from that two things happen:
1. individuals find it more difficult to start and run small businesses
2. the economy suffers
I am not surprised at all at the relative rankings of these G8 nations.
Though Italy and Germany and to some extents Japan had some experience with fascism. The current constitution of Germany was heavily influenced by American demands (and the Japanese constitution, too).
You could say that Germany had a strong history of social-monarchy, and then social-democracy. (With some fascism in a 12 year year period and 40 years of socialism in the east.)
As far as following Adam Smith's works, the economy the US has is a caricature of Smith's ideas (e.g. Smith was anti-monopoly).
2. Note that I was talking about Smith's influence on early US government. The nation has obviously strayed from that quite a lot since then -- and has economically gone downhill quite a lot, as well.
The US is kind of a special case I think. They have an absolutely enormous government that few people trust and even fewer think anything can be done to change it. Sweden, for contract, is voted the most Democratic country. Given the size of their government, this seems to imply that they are much more positive about it.
On the off chance that any Italian HN readers haven't seen it yet.
It's amazing to me that so many nations (the US included) seem to want it to be so difficult for people to succeed in business.
Still . . . that's within 5% of the top of the list, which is shocking given the obstacles to entrepreneurship in the US.
Perhaps I'm doing something very wrong or very illegal, but nothing I've read seems to suggest that.
What did you find to be so much more painful?
It requires a lawyer to be even reasonably sure (as opposed to completely sure) you aren't doing something illegal. If I have to choose between paying for a lawyer I can ill afford and wondering for the first three years of starting the business whether I'm going to end up in court for doing it wrong, the process of setting up a business is not easy enough.
edit: There is a difference between "setting up" a business on paper (so you can claim to have one) and being able to start actually conducting business without running the risk of pissing off government.
Perhaps I'm just being naïve, but I figure if the rules are difficult for me to find it's also fairly unlikely that I'll get caught for not following them. Or, I suppose, I feel like by the time it becomes a serious risk I'll have grown to the point where lawyers become a necessity anyway.
India recently introduced Limited Liability Partnerships (http://www.llp.gov.in/) which is a much, much simpler way of registering a company, especially in the software field, than anything else (most of it online)
Anyone know why?
UAE is also high in the ranks, still for me, as I researched, starting up there seemed more complicated and expensive than here in Poland (low in the ranks), except taxes (a PITA around here).
So the study is pretty inaccurate.
Besides, there are some companies offering "packaged business"s with legal fees, registrations, and other paperwork ready. You can buy one of those and get up and running in 24 hours. They take care of transfering the company to you.
US is 8 and UK 16 for starting a business. What does that mean? It's hard/easy to incorporate? It's incredibly easy to create a Limited company in the UK or LLC, S or C corp in the USA. (I've inc'd in both countries). What does the number 1 country have that US or UK doesn't have?
Paying taxes in the USA is 61 vs South Africa's 23? No way. Paying your taxes in South Africa is a serious pain in the behind - I continue to do it. We file our USA C corp and personal corp taxes ourselves each year and it's a breeze in the States.
My guess is this is based on public opinion with a relatively small sample size per country.
I don't agree with you here. The entire furniture retail industry is based on selling goods on credit to poor people. The National Credit Act tightened lending up, and reduced some of the more blatant exploitation, but it is very easy to get credit, if you want it.
>Paying taxes in the USA is 61 vs South Africa's 23? No way. Paying your taxes in South Africa is a serious pain in the behind - I continue to do it. We file our USA C corp and personal corp taxes ourselves each year and it's a breeze in the States.
I am surprised that you consider tax in South Africa to be more complex than the US. Could you elaborate?
This seems odd to me, but wonder if anyone has an explanation as to why this might be?
The legal process of getting a company going here in NZ is really very simple. The distance from the rest of the world feels kind of overwhelming at times which is our big disadvantage. No over land connections with other countries, not in the middle of a nice trade route or anything. Great time to be a techy here though, the internet is a wonderful thing, when it works.
I saw a big of talk about VC work in agriculture and so on, not so much in the web space.
I think the distance thing is a factor, however for internet based start ups it's not as important.
The company has been extremely successful, but the software is complex and recruiting and retaining skilled employees here has become an issue for them. I think they've been forced to move some R&D over to the US as a result.
http://www.doingbusiness.org/economyrankings/?direction=Asc&...