The best countries for entrepreneurs
The best countries for entrepreneurs:Starting a business anywhere takes grit, determination and a marketable idea, but these places make it just a little bit easier for start-ups to get off the ground.
Starting a business anywhere takes grit, determination and a marketable idea, but certain countries make it just a little bit easier for start-ups to get off the ground.
U.S. News and World Report recently ranked the best countries for entrepreneurs based on a number of factors, including connectedness to the rest of the world, availability of a skilled and educated workforce, developed infrastructure, a well-developed legal framework, and easy access to capital.
To find out what makes the top countries primed for start-up success, we talked to entrepreneurs in each of them to uncover what business benefits these places offer and why they love living there.
With the worldâs fourth-largest economy and the largest in Europe, Germanyâs mix of transparent business culture, highly educated workforce and start-up friendly policies pushed the country to the top of the index.
âGermany has high standards in business culture when it comes to ethics, law and regulations,â explained Irina Graf, who runs event management companyÂ The MICE blogÂ and recently moved her company from the UK to Germany.
The government also makes it easy to get started with a new venture. âIt was incredibly easy to set up a business inÂ Germany. At the time, I paid 20 euros and bam, I had a business,â said Guy Arthur, who runs the eponymousÂ Guy Arthur School of EnglishÂ in Stuttgart. âThe government allows for a lot of write-offs in order to keep the business growing, and clients here seem to be loyal as long as you provide them with high-quality service.â
Unlike other countries (like the UK) where a single city is the economic hub, Germany has a number of large business hubs, including Berlin, Frankfurt, Munich and Hamburg.
This is especially important when testing new products for a global market, according to Jens Wohltorf, CEO and co-founder of Berlin-based chauffeur serviceÂ Blacklane. âGermany has a large enough market to launch a company and test products. We learned how to launch new cities from Berlin, going further away each time to build relationships with driver partners and acquire new customers,â he said. âAfter travellers used us in Berlin, Frankfurt, Munich or Stuttgart, they wanted Blacklane rides in London, Milan, New York and Tokyo.â
English is also widely spoken in Germany â it is the primary business language at Blacklane and many other start-ups â which makes it easier to build a multinational company and attract diverse talent.
Even so, Germany does have some challenges for new business owners, particularly its complex tax code that almost always requires hiring an accountant or tax advisor. Graf also noted that VAT must be reported for companies whose revenue exceeds 17,500 euro compared to ÂŁ85,000 (around 97,500 euro) in the UK, which can add additional administrative work at an earlier stage of the business. Housing shortages are also starting to become a problem in Berlin and other metros due to population growth, increased immigration and lack of new construction, though cost of living still remains low compared to other European capitals.
The creative spirit in Germany fuels both professional and personal life, particularly in Berlin, according to Wohltorf. âBerlin has art and culture around every corner,â he said. âIt surrounds you at the cityâs museums and galleries, beer gardens, markets, cafes, parks and festivals.â
Japan has long been a paradox in the business world, where a traditionally risk-averse culture has also spawned world-changing innovation. âOld technology such as faxes are ubiquitous, yet we are also surrounded by examples of cutting-edge robots and some of the coolest and most advanced ideas and gadgets,â said Joanna Crisp, general manager at travel companyÂ PEAK DMC Japan, Intrepid Group, who is originally from Australia and is now based in Kyoto.
To many businesspeople in Japan, the country is also on the brink of a major cultural shift. While people once preferred to join a big multinational corporation with the promise of lifelong employment, todayâs youth leans toward smaller, more entrepreneurial companies. âSome of the barriers that were there in the past are being removed,â Crisp said. âThere are more incubators, more funds for start-ups and better networking between people working in start-ups.â
The economyâs heart is in Tokyo, where a sizeable expat community makes it easier for foreigners to make professional connections. âTokyo has plenty of international opportunities for people to be involved and connected to each other, while also having unique experiences only accessible in Japan and created by Japanese culture,â said Japanese native Kohei Kurihara, who is co-founder and CMO of collaboration platformÂ CollaboGate.
While English is spoken by some in Tokyo and the government is activelyÂ training more English speakersÂ in preparation for the 2020 Olympic Games, learning the Japanese language and social mores are essential for any entrepreneur in Japan. âTo be successful you need to be able to read between the lines and learn the hidden layers of Japanese business and social etiquette,â Crisp said.
oportunities to escape the busy pace of start-up life is one of the perks of living in Japan, with numerous nature getaways across the island nation, particularly in Kyoto, which Crisp calls âthe cultural heart of Japanâ. âI grew up in a small city and I love to be surrounded by mountains and rivers where a short walk or bike ride takes me out of the business district into the forests and nature,â she said. âRight now, the snow is falling on the wooden roof of a nearby temple and the vermilion-coloured lanterns in its courtyard. There is nothing like watching the seasons change in such a romantic destination.â
Japan also consistently ranks high as one ofÂ the places where people live the longestÂ â due to its quality of life, sense of community and healthy diet.
The American Dream â where anyone can become anything they want if they put their mind to it â still defines the US for many of its residents, especially those who want to start a business.
âWe are willing to fight for what we want and demand a better life from those who seek to block progress,â said Jason Patel, Washington DC resident and founder of college prep companyÂ Transizion. âThis rebellious nature is in our DNA: the American Revolution, coming back from the Great Depression, winning the Space Race and producing so many incredible inventions. We are a people who respect those who risk their livelihoods to live out their dreams.â
Unlike in many other cultures, failure isnât frowned on here, but is looked on as a learning experience. âEntrepreneurs are encouraged to take risks and test the status quo,â said Wen-Wen Lam, CEO and co-founder of San Francisco-based travel management platformÂ NexTravel. A culture of entrepreneurship also means there are plenty of mentors who are happy to help budding business owners.
While many recent successful tech start-ups are headquartered in Californiaâs Silicon Valley, New York City and other US metros harbour their fair share of start-ups. Because the US has a fairly uniform culture and a large market, scaling nationwide is easy here, says Lam.
Hiring can be tough in competitive markets like Silicon Valley, where the now-massive tech giants compete for the best talent with top salaries and perks. âFor smaller start-ups, you have to sell the idea of having a great impact and ability to affect change,â Lam added.
That belief in having a voice affects day-to-day life in the US, where one person, one vote, still impacts the culture. âThere is nothing holier than this premise in democracy,â Patel said. âEngaged citizens can organise and inspire their peers to vote and enact change, and improvements in their community is the backbone of having high expectations for our country.â This belief also allows a diversity of perspectives and views to be widely appreciated.
The national park system here is also one of the best in the world, and residents take full advantage of seeing them wherever they live. âOnly in America can you go from the Death Valley desert to Yosemite mountains to Zion canyons to Yellowstone lakes,â Patel said. âI’m lucky enough to have visited all of them. It’s natural beauty at its finest, seeing what existed before humans and what will exist after our time on this planet is done.â
Though Brexit has created some uncertainty around the future of Britainâs trade relationship with Europe, many entrepreneurs still believe itâs a great place to start a business due to its low barriers to entry and strong business community and talent pool.
âI registered my business withÂ Companies HouseÂ for ÂŁ12 (this can cost up to $500+ in some US states) and opened a business bank account online in minutes,â said David Murphy, who started watch companyÂ Oliver CoenÂ in London last year. The government also makes numerous online resources available, such asÂ government-backed start-up loansÂ and freeÂ business plan templates, and filing business taxes can be fast and easy. âWhileÂ IÂ doÂ use an accountant to save me time,Â itÂ is simple enough thatÂ IÂ couldÂ doÂ itÂ myself. The paperwork is very straightforward and taxes are very simple to understand,â said Canadian Ian Wright, founder of merchant comparison siteÂ MerchantMachine.co.uk. âPlus, the government has committed to continue to cut corporation tax, which means tax rates are very competitive.â
Financing is easier to come by in the UK,Â attracting just more thanÂ ÂŁ4 billion in investmentÂ âÂ the largest amount of venture capital of all European countriesÂ â in 2017. âWe’ve been approached by a number of angel investors who have offered finance and mentorship,â Murphy said. âWe’ve also been invited to apply for government grants, but we turned this down because we don’t need financial support at this time.â
The community here, especially in London, also leads to start-up success, as itâs easy to hire the right employees or freelancers, and face-to-face business meetings are a breeze to set-up. âI’m very worried what impact Brexit will have on the huge range of talent available in London from across Europe,â Wright said. âBut as of today, I think you’d struggle to find as much talent concentrated in one place outside of Silicon Valley.â
Murphy agreed, adding, âWhether I need a world-class product photographer, social media expert or creative director, being in the UK, everything is available on my doorstep.â
The high costs of housing in London can be a struggle for business owners and potential employees. âThe only house I could afford was at the edge of London and was about half the size of what I could get in Canada,â Wright said. Still, having free NHS healthcare makes starting a business a bit less risky. âI don’t have to worry if I suddenly become sick or injured,â he said. âHonestly, I think public healthcare is the number-one thing governments can do to encourage entrepreneurship.â
Besides the business climate, Wright says he loves to live in London because of the combination of history and modern culture. Locals also love the multiculturalism of the capital city, where people from all over the world live side-by-side to create a rich landscape of food and culture.
Due in part to its lack of natural resources, Switzerland has long invested instead in research and development to grow its economy. This has paid off well, with the country as becoming an international leader in banking and finance.
âSwitzerland has traditionally had a robust financial sector, with compliance and expedient government regulation at its core,â said Marco Abele, former chief digital officer of Credit Suisse, and CEO and founder of blockchain investment platformÂ TEND, based in Zug. âSwiss culture is interesting in that these traditional values, embedded in the Swiss financial sector for decades, are readily transferable for entrepreneurs in their respective field of interest.â
Lately, that expertise has been put to work in a new way, as the country has become a hub of cryptocurrency and blockchain-based start-ups. âSwitzerland is leading the way in terms of implementing core values inherent in the traditional financial sector into this new industry,â Abele said. âSwiss universities, too, are embracing this change, researching blockchain and its impact on the world with an intellectual curiosity that is uniquely Swiss.”
In particular, the city of Zug in north-central Switzerland has earned the nickname âCrypto Valleyâ for the number of cryptocurrency start-ups in the area. The city is home to theÂ Ethereum Foundation, the blockchain platform behind many new decentralised applications as well as the second-largest cryptocurrency, trailing only Bitcoin in terms of market cap. âMany crypto projects choose Switzerland for their headquarters for similar reasons as other international organisations and companies: the Swiss neutrality, stability and tax regime,â said Nabil Naghdy, COO of mobile Ethereum operating systemÂ Status.
In addition to a friendly regulatory environment and business-friendly tax rates, Swiss start-ups also benefit from its central location within Europe, making trade and finding talent easier. âDue to its diversity, the language fluency of its population and the high standard of living, Switzerland is a popular work location for expats,â Naghdy said.
Though the extremely high cost of living here is often initially painful for newcomers, seasoned entrepreneurs say the benefits and returns of being a part of the Swiss economy outweigh the costs. Those returns also pay off in the day-to-day lifestyle, as residents enjoy access to world-class schools and educational opportunities, as well as the natural beauty of the surrounding Alps. Switzerlandâs central location within Europe means locals can also take regular advantage of the fast and cheap flights across the continent for weekend getaways.