Starting a new business is never easy, but firms that must grow out of their infancy in countries that are unfriendly or even hostile, to entrepreneurs, are highly likely to fail. Ideally, aspiring business owners have the flexibility to incorporate in countries that more openly embrace capitalism and new business development. Earlier this year, the World Bank released a study on the most business-friendly nations. These countries were selected based on how easy it is for individuals to conduct business. The study also factored in the ease of starting a small business in these nations.
Singapore consistently ranks highly in terms of one of the best countries in the world to own and operate a business. It was founded as a British trading colony back in 1819, which allowed it to start its history with a mindset favorable to entrepreneurialism. Its economy is solidly free-market and one of the most open in the world. As a result, it has become one of the wealthiest countries on the planet. Pharmaceutical and medical technology firms are currently embracing Singapore for new business ventures.
Hong Kong's roots also tie back to the United Kingdom, which occupied Hong Kong back in 1841. Hong Kong also has a reputation as operating one of the most open and free-market economies in the world. It has since been designated a special administrative region by the People's Republic of China, which has so far allowed it to maintain an extremely business-friendly environment. International trade and finance are important businesses to Hong Kong, and it is one of the best gateways for businesses seeking to operate inside mainland China.
A former British colony, New Zealand has steadily shifted from agriculture to important current industries, such as food processing, wood and paper products processing and manufacturing, and transportation equipment. Tourism is also an important and growing industry, as is mining. Businesses looking to operate in Asia would be well served to consider New Zealand for a subsidiary or even operating headquarters.
Even with its current struggles, the U.S. remains one of the best places in the world to open and run a business. Its roots also tie back to Britain, which served as the initial seeds to it growing into one of the largest economies in the world. Per capita GDP in 2011 was right around $49,000 per year, which is among the highest in the world. This figure has been stagnant in recent years, but new businesses continue to sprout up and thrive in a business climate that encourages startups and has the capital to commit to funding new ventures.
Denmark is the only country in the top five with no past formal ties to the U.K. However, it has found its own way to supporting a market economy and high-tech agriculture, pharmaceutical firms, renewable energy, and a large shipping industry. Its key advantage compared to other more developed economies in the current global economy is the very strong position of its government fiscal finances. What is equally important is the fact that Denmark is not a part of the struggling European monetary unit, opting instead to keep its krone.
The Bottom Line
Smaller firms with global ambitions would be well served to consider the above countries for opening international operations. Most continents are covered and Asia represents an important region that should continue to experience above-average growth potential when compared to the rest of the world. Contrarian-minded entrepreneurs may want to consider Europe for its turnaround potential, while the U.S. remains one of the steadier places to do business.