In which country it is easier to do business: TOP-9 directions for entrepreneurs
Relocation of their own business, its opening or expansion is of interest to more and more entrepreneurs around the world. New opportunities can be found literally in any country, but some states offer the most pleasant conditions for those who run their own business.
When compiling our rating, we used the data of eminent research companies, as well as the legislative framework of the listed countries. All of them provide different data, as they explore different parameters. Therefore, we have identified two TOP-a within one article at once: the first is devoted to the simplicity of opening a small business (IP), and the second is the best countries for entrepreneurial activity as a whole.
General situation in the business arena in 2023
The events of 2020-2022 have changed the global economy forever. It has become quite unpredictable, and analytics are currently far from 100% complete. So, the previously "iron" countries showed themselves rather unstable: for example, China. Some world leaders have lost their positions to "newcomers", and new interesting directions have opened up for entrepreneurs.
So, at the beginning of 2023, attention was focused on the countries of the Middle East and Asia. This is due to the fact that Europe is interested in them as alternative supplies of natural resources (oil and gas). It is also due to the coronavirus pandemic, which has greatly "shaken" China and temporarily taken it out of the game. While entrepreneurs in many countries have seen new opportunities during the pandemic, China and Hong Kong are still struggling with the disease.
Leading positions are consistently held by some European countries. Mostly Western. At the same time, the United States and Canada, although they have not lost much rating, are not in the TOP-5, but at the same time it is impossible to talk about the strong instability of their economy.
TOP-5 countries in which it is easiest to open and run a small business
IP is one of the easiest ways to register a small business. The main disadvantage is that in case of bankruptcy you will have to pay with your own property, while a legal entity is insured against this. But in a number of countries, an individual entrepreneur can participate in simplified taxation programs, which becomes profitable with moderate annual turnover. And by the way, in some countries, even a foreigner can register an individual entrepreneur without leaving home - through online services of state institutions.
Registration of a legal entity is a more complicated procedure. And it usually requires an authorized capital. But it guarantees the inviolability of personal property in the event of bankruptcy and allows you to hire employees. And this, in turn, can be the basis for obtaining a residence permit (or its analogues) by the founder. Since, contrary to popular misconception, not all states are ready to issue residency to someone who simply opened a company.
Below we present the countries in which it is easiest to open an individual entrepreneur and a law firm. In some cases, it takes literally a couple of weeks.
Serbia
This small country is good for starting a business at once in several moments. First, since it is not a member of the EU, it calmly issues a residence permit to foreigners on the basis of registration of an individual entrepreneur or LLC. The main requirement is that the business is not fictitious.
Secondly, any of the forms of entrepreneurship can be issued easily and quickly: this will require a basic package of documents and a short waiting time: within 2-3 weeks.
Thirdly, an individual entrepreneur with a small annual turnover (up to 6 times the average annual salary in the country, this is a little more than 110 thousand euros) has the opportunity to register for a simplified taxation system. Its plus is a stable low rate (the size depends on the type of activity), minus - you will have to pay a set amount, even if the income is 0.
In general, Russian-speaking entrepreneurs have every chance to successfully develop their business in Serbia: there by 2023 the demand for Russian specialists has increased, and the Serbs themselves are very loyal to the Russians.
United Arab Emirates
In addition to the fact that the country is considered excellent for doing business (this will be discussed below), it also implies the ease of opening a company. This is due to the fact that the UAE understands that oil, of course, is profitable, but it alone will not be possible to maintain the welfare of the state forever. Therefore, it is necessary to establish international relations in the field of business.
There are two types of companies that a foreigner can open in the UAE – local and in a free economic zone. Local is suitable for those who are going to conduct offline activities, that is, to open some kind of institution, store and so on. Here you need to understand that in some industries it will be necessary to have a second founder-citizen of the Emirates, who will own a package of at least 51% of the shares. It is also necessary to rent an office in advance and arrange medical insurance for yourself. At the same time, the registration of a local company will take more time and will require going to the authorities.
The company in the free economic zone is issued more simply - "in one window", without renting an office and medical insurance. In addition, almost all activities imply that 100% of the shares will belong to you. A significant disadvantage is that business can be conducted only in the economic zone in which the company was registered.
If you have your own company, you can get a resident visa and transport spouses and children to the country on it. But in general, it is not necessary to live in the UAE. It is enough not to leave the country for more than six months.
Italy
Italy remains an excellent option for business immigration. In addition, it is one of the countries in Europe, in which the share of small and medium-sized businesses prevails. So it will be quite easy to open your own small business here.
Best suited for this is an individual entrepreneur or LLC (with an authorized capital of 10 thousand euros). The procedure for registering a company is as simple and transparent as possible: you need to enter your data in the business register of the Chamber of Commerce and Industry (it is possible to do this online), in a few weeks get your company registration number and TIN, as well as information about entering into social insurance registers.
The only subtlety is that foreign citizens of third countries must obtain a Schengen visa of category D. As a rule, this is done in parallel with the registration of the company. On the basis of a visa, within 8 days from the date of arrival of a foreigner in Italy, a residence permit is issued. If you have a passport of Cyprus or another EU country, this point can simply be skipped.
Montenegro
In this country, it is as easy as possible to open an LLC or IP. For example, for an individual entrepreneur with some activities, only the applicant's passport will be required! But many prefer to open an LLC. This gives room for activity (you can, by the way, specify several of its types), in addition, it requires a ridiculous authorized capital - only from 1 euro. Based on the registration of both forms of entrepreneurship, a businessman is issued a residence permit in Montenegro.
So, the procedure for opening a company is quite simple and fast:
The most difficult part is the drafting of the charter or memorandum of association. At this stage, it is probably better to involve local specialists. When registering an individual entrepreneur, this item can be skipped.
Rent accommodation in the country and make a transfer of your passport.
Submit all documents to the Commercial Court in Podgorica (the capital).
Get a registration number, rent an office, get a work permit for a director (for employees this is not necessary).
After paying the first taxes, get a medical book - it is issued free of charge for both citizens and non-citizens of Montenegro.
With an individual entrepreneur it will be even easier both in opening and in paying taxes. This is a fixed monthly amount that includes not only taxes, but also medical and social insurance.
Armenia
Surprisingly, Armenia has recently been considered as a place for registration of individual entrepreneurs and LLCs. The latter is extremely convenient for IT companies that work, in principle, all over the world, but they prefer to register in this quiet and remote corner from Europe. Since very attractive tax incentives for this field of activity began to operate here.
An individual entrepreneur in Armenia is opened extremely simply: you need a passport and its transfer, binding to a legal address, a local phone number (solved by buying a SIM card) and a visit to the Business Entry department under the Ministry of Justice with simultaneous payment of a fee in cash. After that, you need to get a social card and open a bank account.
The LLC is opened in about the same way, only the constituent documents are added to the list. The whole procedure takes literally a few days, which is attractive for those who do not plan to stay in Armenia permanently and for a long time.
TOP-5 countries with the best conditions for business
The simplicity of registering a company is not the last detail, but still many businessmen consider their business not only as a source of stable income, but also as a field for new opportunities and growth. So it will not hurt to find out in which countries the most pleasant and attractive conditions in order to develop and get more and more profit.
Economist Intelligence and the Global Entrepreneurship Monitor have compiled their own ratings that show which country has a better and more favorable business environment. The first source examined the conditions directly, and the second conducted a survey among entrepreneurs, identifying their assessment and expectations. We will give both top-a, and then consider the countries that were in both ratings.
So, according to Economist Intelligence, in 2022 the most favorable for doing business were:
Singapore
Canada
United States
Switzerland
Hong Kong SAR
UAE
Australia
United Kingdom
Netherlands
Sweden
The Global Entrepreneurship Monitor gives a slightly different list:
UAE
Netherlands
Finland
Saudi Arabia
Lithuania
South Korea
Norway
Qatar
Switzerland
Spain
United States
Sweden
France
Germany
Canada
Obviously, large countries with good economic indicators have become leaders. Despite all the crises that have occurred, they remain stable and offer comfortable and attractive conditions for conducting various types of business.
UAE
The United Arab Emirates has already appeared in the first part of our article. It is worth noting that the UAE is attractive from the point of view of not only opening a business, but also its conduct. This is due, first of all, to the low tax rate, more precisely, its almost complete absence. So, the tax on profits, dividends, interest and capital gains is 0%, no matter how fabulous it may sound. Only the profits of banking, insurance and oil and gas companies are taxed at 5%, and this is also the percentage of VAT and customs duty for local companies (that is, those who are not registered in the free economic zone).
In addition, the country offers a wide range of support for small and medium-sized businesses, providing and promoting loyalty programs for various industries. At the same time, the UAE is distinguished by the simplicity of rules, payments and other nuances related to the business sphere: there is no annoying bureaucracy and even more so corruption. Everything is transparent and as accessible as possible, even for foreigners.
Netherlands
In the post-pandemic period, the Dutch government released several programs to help small and medium-sized businesses, as well as the self-employed. This very well stabilized the country's economy and once again proved that the north-western part of Europe is one of the best places for business development.
True, taxes here are not the smallest – 25% on corporate profits, 19% VAT and 15% on dividends. But royalties and income of holdings are not taxed at all, which stimulates the opening of franchises, subsidiaries and, in general, creates healthy competition.
United States
The United States remains a place of refuge for IT companies, although other areas are no less in demand. Despite the rather high taxes and considerable authorized capital (from 50 thousand dollars), the States are a great place to conduct and expand different types of business, and there are a number of good reasons for this:
access to the global market and partnerships;
easy and transparent system of company registration and reporting;
the ability to return most of the taxes through benefits, subsidies and state support programs;
constantly developing innovative market;
favorable attitude towards foreign businessmen - the conditions for them are no different from the conditions for US citizens.
It is also necessary to remember that in some states there are special benefits and exemptions from fees. Registering a company in the right state can be a good move in order to be exempt from part of the taxes.
Canada
The economic and legal system of Canada allows businessmen to comfortably and easily both open and conduct their own business. Taxes here are quite pleasant: non-residents pay them only from income received within the country, which will appeal to those who carry out their activities not only in Canada. Also, each of the provinces provides for a reduction in the tax rate and a variety of benefits. Thanks to them, on average, the size of the tax on corporate income is 15-25%.
Also in the country there are programs that support some areas of business. As the most striking example: IT and research and development. For businessmen in these areas, tax incentives, investment tax credits and cash refunds are available. All this allows businessmen who have registered in Canada not only to increase profits, but also to conduct experiments in the field of science for the benefit of world society.
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