Best Countries to Start a Business Abroad
If you're embarking on a new overseas business venture, you might be surprised to learn that certain countries offer more potential than others. Read our guide to some of the best.
Important things to consider
There are fundamental differences in the business environments of different countries, which vary quite dramatically worldwide.
Some countries make life much easier for entrepreneurs, whereas others present much more of a challenge. Tax rates, legal requirements and regulations, business rankings, employment rates and financial policies will all have an affect on how a business operates in its first year and beyond.
The taxes you’ll need to pay will have an enormous impact on your bottom line, so this is one of the key things to consider. If you’re planning to start a business in a new country, look into the tax structure, tax relief and other liabilities like capital gains.
Issues surrounding governance vary considerably around the world. Before you start a business abroad, you’ll need to know your chosen country's corporate governance inside out. Some countries will make life much easier for small businesses than others.
Immigration rules might affect whether or not you can start a business in your preferred country. Check whether you need residency status to launch a new company, as this might be a requirement.
Rules and regulations surrounding business reporting vary in different countries, so make sure you read up on these as part of your research. You should also get clued up on the requirements for resolving insolvency in each of your shortlisted locations.
What economic indicators affect business success?
Several factors can influence business success, but economic indicators are a good way of predicting how a company might fare in the short and long-term.
Gross Domestic Product
A country's GDP says a lot about the strength of its economy. GDP represents the value of goods and services produced within a company and explains how well the economy works. Inflation is also taken into account.
Consumer Price Index (CPI)
CPI can be used to measure inflation, which will impact the value of a country’s currency. If inflation is on the rise, some of your business costs - such as heat, light, and fuel - will also rise, impacting your profitability. A stable inflation rate indicates a more stable economy.
Purchasers Manufacturer’s Index (PMI)
PMI can be used to examine the robustness of a country’s manufacturing sector. It’s a good idea to look into this before starting a new business in any country as it can provide an indication of the overall buoyancy of a particular economy.
The level of unemployment in a country has an enormous impact on the spending power of consumers and, in turn, the potential of any new business to succeed and make a profit. Make sure you compare employment levels in each of your chosen countries as part of your research, and also bear in mind current consumer spending patterns.
What are the best countries to start a business?
The world holds incredible opportunities for new business ventures, but those opportunities are much better in some countries than others. Take a look at our list of the best countries for business, for entrepreneurs looking to launch a new company.
For many reasons, the UK is regularly listed on Forbes’ list of the top countries to do business in. It’s easy to start limited liability companies in the UK, making it a popular choice amongst founders.
There are benefits in terms of taxation too, as the UK has one of the lowest corporate tax rates of any member of the G20. Despite the changes that Brexit has brought about, the UK remains one of the top countries in the world to do business.
The World Bank cites Singapore as one of the top places to do business. Its economic indicators are strong, with good GDP growth and high employment levels.
Singapore is one of the world’s wealthiest countries, with one of the largest economies, and so consumers have plenty of spending power. There are no taxes on dividends or capital gains in Singapore, and it's easy to do business with its surrounding countries, such as Indonesia and Malaysia.
Norway is a fantastic option for technology companies, as there is high demand for tech innovation. Consumers tend to have good spending power, and there are no looming political issues that might impact the stability of a new company.
The country's infrastructure is well-developed, and it's simple to trade with any EU member state from Norway.
With a strong economy and ever-increasing GDP, Hong Kong is another favourite among business owners and investors. It's a global financial centre that has attracted a lot of Chinese businesses' attention in recent years.
There are also no import tariffs for businesses operating in Hong Kong, which can be of huge benefit to startups.
New Zealand’s economy is going from strength to strength, making it another popular choice for new business ventures.
New Zealand is relatively wealthy, so consumers have plenty of money to spend there. Employment rates are favourable, and there are no capital gains taxes or social security taxes to pay.
A world of opportunities for new businesses
Taxes, employment rates, inflation and factors such as GDP all affect the outlook of a new business. And countries' rankings for these factors differ quite significantly around the world.
Before starting a new business, make sure you do your research into what each of the different countries has to offer. Where you choose to base your business abroad could dramatically improve its growth potential.
Clear Currency can help you with your international business payments
Whether you’re starting a new business in a foreign country or want to make it easier to do business on the international stage, we are here to help.
Clear Currency provides businesses with all the tools they need to make and receive international payments. We can make foreign exchange simpler, faster and cheaper, enabling companies to focus on growing their business - without having to worry about exchanging money. Sign up for a Clear Currency account to get started.