The most common way to live as an expat is to find employment in a foreign country, often by moving to a new position within a company. However, this certainly isn’t the only way to go about moving abroad. A considerable number of people start their own businesses when moving abroad. Many of them already have experience being entrepreneurs and running businesses, and want to continue doing so in a new place.Other aspiring expats are looking to change their lives completely: to not only move to a new country, but to move from a regular job to running their own business.
But of course not every country in the world is a good place to start a business. In fact, the best places in the world to be an expat may not necessarily be the best places to be an entrepreneur. Bahrain, for example, placed fourth in HSBC’s ‘Expat Explorer 2015’ report (based on the opinions of over 20,000 expats in more than a hundred countries), but ranks at only 65 in the World Bank’s ‘Doing Business 2015’ report. (This ranking is in terms of the overall ease of doing business; in terms of starting a business, Bahrain ranks even lower, at 140!) There are other countries, like Jamaica and the Republic of Macedonia, where it is extremely easy to start a business, but a lot more difficult to run it.
It’s important to figure out exactly what works for you, in terms of both doing business in a country and living there, and also to research the specific industry or sector that your business will be in. In any country, there are some industries that are more tightly regulated and highly taxed than others, and there are other industries that the government promotes and facilitates in every way possible, including supporting entrepreneurship.
In a more general sense however, there are a number of common parameters on which you can judge how entrepreneur-friendly any place is. These include:
– The time, cost, and ease of the initial steps, such as actually setting up your business and getting registrations and permissions
– The quality, accessibility, and cost of basic infrastructure such as electricity, internet, and banking services
– The stability and general health of the local economy and currency
– The potential for barriers due to language, business culture, and culture in general
– How much you will be taxed and how complex the tax structure is
– How easy it will be to address various issues, such as a legal dispute with a client or customer, or insolvency of your business
Based on these parameters, here are ten of the best places to start your new expat business.
New Zealand is almost at the top of the World Bank report, coming after only Singapore in terms of overall ease of doing business. On almost every parameter, New Zealand is either one of the top three countries or does reasonably well. You can register your company online in as little as 24 hours, and it costs only NZD 10.22 to reserve a company name and NZD 150 to incorporate the company. The economy and business climate are stable, the bureaucracy functions smoothly and with minimal red tape, transparency is high, and corruption levels are low. Expats of course need to meet certain requirements to get a visa, such as showing that they have a proper business plan, have adequate funds to both run the business and live in the country, and understand the business environment there, but these are not unusual requirements, and should be easy enough for anyone who’s serious about starting a business in a foreign country.
The United Kingdom has consistently placed highly in the World Bank’s “ease of doing business” rankings, and London in particular has been described as one of the best places in the world to start a business according to expats surveyed for the HSBC report. Online registration of a business takes less than a day and costs only GBP 30, and the country scores highly on almost every other parameter except for registration of property. The UK is of course expensive in general, and taxes are at the higher end of the spectrum, but most expats are happy with the quality of life, and find the country pleasantly diverse, welcoming, and easy to adjust to. More importantly, in terms of running a business, the economy and currency are stable, and most expats like the working culture here.
United Arab Emirates
One of the main reasons why the UAE is a great place to start a business is the same reason why so many expats love being employed there: the tax regime. In fact, the country ranks at number one in the World Bank report in terms of paying taxes. Contrary to popular perception, the UAE isn’t 100% tax-free; however, it has no personal income tax, and in addition, no corporate tax or tax on profits in general. The emirate of Dubai is of course the best place in the UAE to both live and to start a business, for a variety of economic and professional reasons.
There are certain complications and restrictions that you need to keep in mind – for example, except for businesses in the free zone (which have their own restrictions), a local must be the majority shareholder in any Dubai-based trading company. However, for certain businesses and for many expats, Dubai remains a great place to be an entrepreneur – it was even described by expats in the HSBC report as being among the four best places in the world to start a business.
Singapore has a great reputation around the world in a number of areas, ranging from cultural diversity to safety; from corruption levels to infrastructure. Unsurprisingly, it places right at the top of the World Bank report in terms of overall ease of doing business as well as a number of more specific parameters, and the HSBC report also agreed with this assessment, with the expats surveyed describing it as one of the four best places in the world to start a business.
The cost of living is high in Singapore – among the highest in the world – and there are several relatively unusual restrictions, including the laws prioritizing local applicants for certain jobs, and the requirement of government approval for all company names. However, in most important matters, Singapore is a great place to run a business: it has a strong economy and a strong currency, relatively low registration and starting costs, low taxes, and low import and export costs. In general, the laws in the country are extremely business-friendly, with a number of perks for small and new business owners.
Hong Kong too makes it easy to start a business, with an online procedure that takes less than a day to register a company name and get a certificate of incorporation. The charges consist of an application fee of HKD 1720, a business registration fee of HKD 2,000, and a business registration levy of HKD 250. All the other procedures are also quick and easy, and relatively cheap. One of the major advantages of starting a business in Hong Kong is the tax system: taxes are quite low, and the system is easy to understand and navigate.
Panama doesn’t rank very highly in the World Bank ‘Doing Business 2015’ report – it came in at an unimpressive 69, and didn’t score too well on most of the individual parameters either – but many expats describe the country as a great place to live and to start a business. The cost of living is low, and yet the standard of living is high; infrastructure is high quality, reliable, and affordable; and the country has a stable economy and a great pool of qualified but relatively inexpensive labor. For expats who can avail themselves of the country’s “Friendly Nations” visa program, the process of starting a business becomes even easier, and American expats have the added advantage of Panama using US currency. The tax system is a bit complicated and requires the advice of an expert, preferably in both Panama and your home country, but with good advice, it’s possible to minimize your tax liability considerably.
Taiwan is among the best places in Asia in which to be an entrepreneur. The little East Asian country just fails to make it into the top ten of the World Bank ‘Doing Business 2015’ report, coming in at a very respectable 11, far ahead of many other popular expat locations in the region, including Thailand. The country has a stable, modern economy, excellent infrastructure, and a vibrant culture of business and entrepreneurship. Taiwanese business culture is rather unique, with strict etiquette and customs that most expats will be unfamiliar with. However, Taiwan does a lot of international trade, so the locals are used to dealing with foreigners, and with a little effort and training, most expats are able to bridge the gap.
In some ways, Sweden can be a challenging place to do business in, but this is mainly to do with the business culture there, which can take some getting used to. The emphasis on consensus, egalitarianism, and professional conduct, while admirable, has its downsides, and can be difficult to adjust to. However, the advantages of this business culture are huge, and Sweden scores extremely well on most of the more tangible parameters too. The country comes in at number eight on the World Bank report, and at 16 in terms of the ease of starting a business. Taxes are high in Sweden, and the tax structure can be a bit complicated for people who aren’t used to it. However, government services are efficient and corruption is low; the infrastructure is excellent; and so is the quality of life.
Canada ranks very highly both as a place to live and a place to do business. The World Bank report places it at 14, and the HSBC report places it at 6. The country has a modern, free-market economy, with a moderate amount of government regulation, making it stable, yet free and efficient. Incorporation and registration of a new business, for example, is an online process that can be completed in a single day at a cost of only CAD 200. In terms of its business culture, infrastructure, taxes, resolving insolvency, and getting credit, Canada scores extremely well. One of the few negative aspects of doing business in Canada is the cost of importing and exporting goods, which is extremely high.
While Portugal is not among the top ten in the World Bank list – it’s 23rd in terms of overall ease of doing business – a number of factors nonetheless make it an excellent place to start a new business, especially in the capital city of Lisbon. Registration of a new business is at a one-stop shop, takes no more than a day, and costs between EUR 300 and 360. Taxes in Portugal are quite high, but the relatively low cost of living, the geographic location, the business-friendly laws, and the economic stability and growth all make it a great place to be an entrepreneur. In addition, the startup culture in Portugal is rapidly growing but is still relatively young, which means that it’s vibrant and competitive but retains a strong sense of community and mutual support.
Have you moved abroad and started a new business? Where did you move to? Share your experiences in the comments!