Starting a company in New Zealand was pleasantly surprising. First you sign up for an account at http://companies.govt.nz, then you use the web app (which worked fine with Opera) to fill in the details about your new company. Consent forms are emailed to you, which you fill out, scan in and upload. A few hours later, after being reviewed by a human, your company is formed and your certificate of incoproration is emailed to you.
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.
Not sure how accurate this list is. Thailand, for instance, requires all businesses to have at least 51% Thai ownership, and I've heard Thai courts are fairly heavily biased towards locals over foreigners. Foreigners can skirt around this a little bit by having 10+ Thai silent partners in different parts of the country that don't know each other who collect a dividend or payment each year without active involvement, but still a hassle and reflective of the lack of trust Thailand has for foreign investors and entrepreneurs.
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.
Ah, that changes things quite a lot. Good info, thanks for pointing that out.
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.
You're wrong here. For certain businesses, foreign ownership can be the full 100%. When we opened our business here, we actually had the change to go this route, but choose not to because it would have been more hassle though.
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...
> You're wrong here. For certain businesses, foreign ownership can be the full 100%. When we opened our business here, we actually had the change to go this route, but choose not to because it would have been more hassle though.
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."
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.
The way described in the article is indeed the way it has been until a few years back, but recent governments have made some attempts to become more open for foreign entrepreneurs; granted, it's still hard sometimes but I do have the feeling it's getting better.
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!
Thanks for the feedback, very good info. If you happen to stop by Saigon before the end of the month, shoot me an email if you'd like to grab a coffee. I'm in Kuala Lumpur in November too, feel free to reach out. Godspeed and much prosperity in your business.
I am curious as to why one would hope that... Around the world there are plenty of small businesses which are in no need of any kind of limited liability, however they still make money by turning a profit so I'd still call them a business.
Because it's more of an apples-to-apples comparison for purposes of the survey and a more useful metric for people interested in creating and growing a business. It's also something of a clearer distinction from someone who just starts "doing business" by selling apples on the street corner or something.
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.
Those table rankings do have some influence. Germany cleaned up its act partly because of them. E.g. you used to need 10.000 Euro in capital for a limited liability company (a German invention of the 19th century be the way), but they reduced that requirement to 1 Euro plus the need to re-invest a certain part of profits until you reach 10.000 Euro.
My experience in Canada in starting a business agrees with its 2nd place rank. It only took a couple of hours to get an incorporated business setup, as long as it's a numbered company (e.g., 4312341 Alberta Inc., although, I forget what my number was). It's a couple more hours to open a bank account, make a shareholder loan, and get company cheques (sic).
All in all, it takes about a morning to have a legal operating funded company up and running.
My wife is Japanese and when I said I was starting a company she asked me But, how? Are you even allowed to do that? I didn't really understand how you could not be at the time.
I guess that's why NZ ranks #1 and Japan ranks #91 for getting started.
Indeed. Starting a business in Japan is a hurry-up and wait game. There was a recent panel sponsored by the ACCJ last month which invited several government officials to a panel discussion to inquire into why things were so burdensome and to come up with solutions. At the conclusion of the panel we had a long list of ways the 'start-up' process and culture of Japan could be improved-- among them was updating laws, making banking and related matters for small business (bank transfer fees) easier, encouraging the media to cover more entrepreneurs, and engaging college students in the start-up process more.
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.
One of the big things we did at the tech incubator is tell people how easy it is to start a company -- there isn't a significantly higher paperwork burden or capital requirement these days than there is for a US LLC. (That did not used to be true.) The problem is that this has not hit the mainstream in terms of cultural acceptance yet.
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.
How does one get a visa to be in Japan if they intend to start a company there? It would appear to be difficult to get a visa if you are not already profitable, correct?
Talk to me privately for specifics. Short version: getting a visa is hard, renewing one is easy if you are as profitable as your previous employment. The easy paths go through native megacorps.
South Africa's ranking is likely to fall in the next survey. There have been recently been well publicised cases where company directors have been fraudulently replaced at CIPRO, the government agency that handles these registrations, due to a lack of adequate controls. The directors are replaced and the bank accounts are emptied (the new "directors" get signing powers at the bank) before anyone realises what's happened.
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).
I'm curious if anyone has worked for a company in Singapore, done lots of business with one, or better yet started one. By these rankings and the stereotypes I've learned it basically seems like a capitalist's paradise, with practically the whole society being pro-business and a gigantic minority of the population (42% according to Wikipedia) being foreign workers/students.
My impression was it used to be a haven for large business. But due to rising costs they are moving nearby to Malaysia and Indonesia and just keeping management offices in Singapore (ex. memc.com). I haven't heard of it attracting young international people looking to do startups primarily because it's not a very liberal society. Chewing gum is illegal and cannabis possession carries a penalty of execution. A sharp contrast to Silicon Valley\California.
Why do you bother about chewing gum and having cannabis if you are looking for a place to start or run a business? Doesn't factors like low corruption, safety or market size matters more?
"Disneyland with the death penalty" may be a unique selling proposition but I well believe it when metamemetics says it's bad at "attracting young international people looking to do startups".
There's a lot more than that, e.g. you have to be careful about what you write and perhaps say about the government.
That is being paranoid. I don't understand the downvoting. Is US a "Disneyland with guns" then? How many people have been killed by guns versus death penalty in Singapore? (Before you downvote me again, hear me out)
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.
What do you mean by "ecosystem"? I'm Singaporean and AFAIK there's a shitload of people doing startups here, though of course not as much as in Silicon Valley. You're probably right, though, about the culture being traditional if you're referring to funding. Please note, though, that these are just opinions based on personal experience.
Well, that put numbers around my recent decision to return from Spain to the UK. I love Spain to bits, but doing business there, legally, is utterly impossible even when fluent in the language. It's very easy to do business there illegally and cheap, if that's your thing.
I'm not sure why I can't seem to edit my previous comment, or what happened to it.
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.
Israel ranks really low on "Dealing with Construction Permits" and "Registering Property", according to this list. Don't let this list fool you, it's a true start up nation. The amount of tech and start-ups coming from Israel is amazing.
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?"
The "starting a business" rank is definitely not accurate. 34 days on average to start a business? WTF? In fact in israel you can start doing business BEFORE you register it. Just make sure you register it right away, but you can start selling stuff immediately.
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).
I haven't read the book but are the scores really that low?
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.
Italy and Germany have their (recent) roots in fascism. France has its in . . . well. I'm not going to go there.
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.
I am not sure "fascism" is the common bond. Slow, bureaucratic procedures with relatively high capital requirements seem to be the norm in continental Europe, with countries moving away from that model at different speeds.
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.)
1. Do you think that the form of a government does not affect its tendency toward corruption?
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.
1. Yes and no. The smaller you make the government's power the less their corruption will matter. On the other hand, if the government handles more things (e.g. Sweden) then I would expect corruption to be attacked more because it harms more people.
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.
Starting a business in the United States is a little like pulling your own teeth while getting your fingernails trimmed with a wood chipper. The fact that it still ranks fourth overall just indicates how much worse most of the rest of the world is.
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.
I set up a Georgia LLC in the course of an afternoon. State registration, federal EIN, bank account. Income for the LLC is treated as personal income for me (it's a single member LLC that's disregarded by the IRS), so even taxes aren't that complicated.
Perhaps I'm doing something very wrong or very illegal, but nothing I've read seems to suggest that.
In my area, it takes no fewer than three different licenses just to set up a consultancy that doesn't even sell products (pure service oriented business) -- and that doesn't address any of the issues aside from licensure (tax ID, ensuring your business name is not a trademark infringement, et cetera). The worst thing about it, though, is not the complexity of it. The worst thing about it is that, because one has to check everything at local, state, and federal levels, and because each of these levels is often very poorly organized where the "end user" is concerned, it took me an afternoon just to find out about all that stuff. In fact, some of it I stumbled across by accident while looking for something else, and was surprised to find it. I'm pretty much positive that I missed some things before I gave up.
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.
I agree that there is a difference. On the other hand, once you have the business legally established (the easy part), you can conduct business as that entity. You might piss off the government and the liable for fees/penalties, but you're not going to invalidate the actions of the business by doing that.
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.
One can conduct business in violation of the law anywhere. When it's done intelligently, we call the result "black marketeering". When it's done stupidly, we call the result "jail time".
to be honest, it ranks 8th in actually starting a business. The 4th ranking is the overall doing business ranking, which takes other factors into account.
Just wanted to mention the process of registering a company in India has mostly moved online using the Ministry of Company Affairs website (http://www.mca.gov.in/). The most time consuming thing is acquiring a Digital Certificate (which is how most financial filings are done in India these days), which involves in-person verification.
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)
I was really sad to see India ranked so low. I remember my friend starting a company by paying Rs 6000 to broker, who took care of all the things. Things work differently in India, if you do not go through a broker, you might take a few weeks :-(
Interesting that the countries with the most startups (USA, Israel, some in Europe, etc) aren't that highly ranked compared to surprises like Saudi Arabia. I really didn't expect Israel to be so low and Saudi Arabia so high.
Does it not only concern natives? Doing business as a native in countries of the Gulf is far more different than doing it as a foreigner (see how to set up a business in Dubai, UAE).
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).
While the majority of Saudi's economy is not private sector, they have recently been trying to rapidly grow it with pro-business incentives. Basically the government realized oil is 55% of their GDP and needed to diversify their portfolio.
Really surprised that the UK ranks 16th on 'Starting a Business' and the US ranks 8th. From what I know, it takes a lot longer, costs more, and tends to involve actual lawyers to open a business in the US. In the UK, I did it all online for £25.
Where do you "know" this from? Starting a business is dead simple in the US. Create a Delaware class-C corporation, or one in the state you live in if you prefer (in my case, in the state of Washington, it was just a few online forms and a nominal fee).
Belated reply, my knowledge for the US side is from threads on HN, which have greatly exaggerated the process if it's true that you can do it all online in a few minutes.
It's because they list out "Contact HMRC and register for PAYE" as taking 8 days, and they seem to think you can't actually trade before that's done. Which is idiotic.
Shocking results for Germany. Know where that is coming from...
But once you have done a bit there it is quiet straight forward.
So let me know if I can help anybody doing business or starting a company in Germany.
I don't trust this list at all. I have just formed a company in Ireland and Portugal. Ireland is ranked 7 and Portugal ranked 48. In reality Portugal was about 3 times faster than Ireland, but cost about double.
I'm not sure all those numbers are correct. I was born in the Dominican Republic and I can say that the time to open a business is least than 20 days.
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.
What's the cost, especially compared to standard incomes in the nation? I know a number of countries score very poorly because of this (CHANGED: per capita income is a factor in the calculation: http://www.doingbusiness.org/MethodologySurveys/StartingBusi...).
The rankings seem almost arbitrary. South Africa is 2 for getting credit. I'm South African and there's just now way that's true. Banking in SA is extremely expensive and there's no such thing as a free checking account. Most of the population has no credit history and those who do use credit sparingly and find it hard to get.
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.
>Most of the population has no credit history and those who do use credit sparingly and find it hard to get
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?
Reading this list made me think, "wow, I could have been born in so many other countries, with such dramatically different possibilities, but I was born in the US." Just a strange thought to consider. A lot of these countries barely have the rule of law: police misbehavior anywhere is unacceptable, but next time I see "Police mistreat innocent bystander X" here or on reddit, I'll think "but at least you can't walk down the street and bribe the cop to get away with Z" for a second before I start being furious with the system.
mmm NZ seems very high in the rankings but the vc/angel investment community very immature over here... possible opportunity for low hanging fruit just across the ditch for a few valley based investors perhaps ? ;-)
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.
NZ has expensive (and not particularly fast) internet, which is probably why. On the other hand, setting up a limited-liability company took me an hour (including registering for GST) and cost $40 when I did it (it's a little more now), and costs nothing to renew. And the time zone difference means we're often working when the US is sleeping, which can be handy when you're deploying a new version of a production site for a US audience.
Deploying updates to production sites when the US is sleeping is a massive boon, it was one of the reasons my previous employer did all their R&D in New Zealand. The downside is that pagers tended to go off in the middle of our night when server load was highest.
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.
This is a ranking of ease of doing business, not starting a business. If you want to start a business in the USA as a sole proprietorship then you can just go ahead and start it.
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.