Ease of Doing Business: The Best Places to Start a Company in 2020

Have you been considering expanding your business overseas?

How difficult is it to do business in a foreign country?

We researched and created a beautiful map that will show you the ease of doing business.

Enjoy!

This Map Shows the Ease of Doing Business by Country in 2020

Here is how countries from over the world rank in the research.

Follow the colors and explore for yourself:

Ease of Doing Business - Infographic

Some countries make it very difficult for foreign businesses to open. They do this to keep money in the country or to protect local businesses. In other countries, the administrative processes involved might be overwhelming.

Starting the business is the first hurdle.

Labour laws, the enforcement of contracts, and similar issues are the next step.

Still, that doesn’t mean that you shouldn’t look at expanding to a new country. Doing copious research upfront will help you make an informed decision. We’ll give you a head start by listing the top 20 countries identified by the latest World Bank Ease of Doing Business Report.

The World Bank compiles this report annually. They compile several different factors that allow them to rate each country in terms of how easy it is to do business there. They look at several different factors to determine what rank each country is assigned. They also rank each country based on the individual criteria, such as how easy it is to get construction permits.

What Еxactly Is “Ease of Doing Business”?

This refers to how simple it is to set up and conduct business in a particular country. This is quite a complicated topic, and that’s why the World Bank uses so many different factors to rank countries. It’s also essential to consider the individual factors at play.

Say, for example, that you want to open a factory in the United States. They rank 6th overall on this list. They have a strong economy and skilled workforce, so it’s an attractive option. That said, they’re higher on the cost of doing business index, so you’ll have to factor that into your pricing.

Investigating more closely, you’ll see that they’re 28th when it comes to how easy it is to start a business. And, more interestingly, the area that they could use improvement in is in electricity production.

New Zealand ranks top of this list. It is extremely easy to start a business there. That said, you’ll have to consider your market. If you aim to sell to the Asian Pacific market, New Zealand is in a good location. If you want to sell to the North American market, the logistics are trickier.

That’s why it’s imperative to look at more than just the ease of doing business indicators. You have to evaluate your choices based on your own company’s needs instead. Do you want to buy property there, or rent it? How easy will it be to enforce your intellectual property rights? Is the country politically stable?

Take South Africa, for example. You’ll see that it’s not on this list at all. If you look at it, it’s relatively easy for foreign businesses to buy a property and start their businesses. You have access to a large workforce, most of whom are at least literate. The cost of living is not that bad, and so it could be an attractive option.

That is until you look a little deeper.

First off, the country has an exceptionally high rate of corruption and political unrest. Crime is high and seldom successfully prosecuted. Labour laws distinctly favor workers and unions have a lot of say in the country. The biggest problems, though, are the unstable power grid and badly maintained infrastructure. These factors all negatively impact the ease of business in this country.

The government has also started steps to allow them to expropriate land without compensation with very vague terms of how this will proceed. They’ve stated that foreign investors will be protected from this policy. But what happens if a different party takes over?

We’re not trying to pick on the country here, but they have a long way to go before they can improve their World Bank ranking. It might not be the best country to invest in at the moment. But, unless you’d done a good deal of research, you wouldn’t have known that.

Should You Use a Local Consultant to Smooth the Process?

A reputable firm will have connections in the country you’re evaluating. They’ll understand what it takes to do business there, and also be able to make introductions and give general advice. In some countries, like South Korea, this is exceptionally important.

It’s also essential to consider a local consultant if you don’t speak the language or understand the culture. Even the most business-friendly country can become a minefield if you inadvertently insult the wrong person.

Of course, before choosing a consultant to represent you, you must research them thoroughly, as well. Choose an established firm that has a good reputation. Ensure that they have experience dealing with a business like yours.

Which is the Best Country for Business Overall?

That title goes to New Zealand. The country ranks highly in several of the individual statistics as well. If you’re not that keen to set up shop there, we have nineteen other potential candidates for you as well.

There are some surprises on this list. Who’d have thought that Georgia or North Macedonia would have been amongst the most business-friendly countries?

1. New Zealand

Source: World Bank/ TMF Group/ Doing Business/ Statista

  • GDP (In Billions): $ 205
  • Income: High Income
  • Starting a Business Rank: 1
  • Construction Permits Rank: 5
  • Registering Property Rank: 1
  • Ranks Highest In: Starting a Business/ Getting Credit
  • Could Use Improvement In: Trading across Borders

New Zealand ranks as the best place to do business in the world, according to the World Bank. The company actively encourages foreign investment by offer tax incentives and other rewards. The country has a well-developed infrastructure and offers a stable environment for growth.

The policy is obviously working for them. They had a total investment of 113 billion in New Zealand dollars in 2019. That’s approximately 72.41 billion in US dollars.

2. Singapore

Source: World Bank/ TMF Group/ Doing Business/ Statista

  • GDP (In Billions): $364.2
  • Income: High income
  • Starting a Business Rank: 2
  • Construction Permits Rank: 7
  • Registering Property Rank: 13
  • Ranks Highest In: Registering Property
  • Could Use Improvement In: Getting Credit

Singapore always scores highly in lists of the best countries for business. The government has embraced globalization and provides a safe, high-quality business environment. The government is known for its integrity and for being strict when enforcing intellectual property rights.

The process of registering a company is made extremely simple and transparent. You can file all documentation online, and processing is completed efficiently. The country also has easy access to affordable workforce thanks to its location. The construction industry alone employed 283.4 thousand foreign construction workers.

One thing you should know about Singapore: it’s one of the most indebted countries in the world in terms of debt per capita.

 3. Hong Kong

Source: World Bank/ TMF Group/ Doing Business

  • GDP (In Billions): $363
  • Income: High income
  • Starting a Business Rank: 4
  • Construction Permits Rank: 1
  • Registering Property Rank: 34
  • Ranks Highest In: Dealing with Construction Permits
  • Could Use Improvement In Registering Property

Hong Kong is widely viewed as the stepping-stone to China and other Asiatic countries. If you want to expand your business into China, Hong Kong is an excellent place to start. The region is multi-cultural, with several large international firms using it as a base of operations. It’s ideally located for business in the Asia Pacific area as a whole.

The country is keen to embrace foreign trade, and, though technically under the administration of China, it’s a lot easier to gain a foothold there than on the Chinese mainland. Foreign investment in Hong Kong in 2018 totalled $115.66 billion, showing that the country actively encourages investment. That’s one of the reasons that it ranks so highly on this doing business index.

4. Denmark

Source: World Bank/ TMF Group/ Doing Business/ Statista

  • GDP (In Billions): $352
  • Income: High income
  • Starting a Business Rank: 22
  • Construction Permits Rank: 3
  • Registering Property Rank: 7
  • Ranks Highest In: Trading across Borders
  • Could Use Improvement In: Getting Credit

Denmark ranks as one of the most business-friendly zones in Europe. You can literally get your business off the ground in a few hours. The company’s government is highly efficient. You also have access to a highly-educated and productive workforce. Encouraging foreign business ranks highly in this country. Foreign direct investment in 2018 totalled $112 billion.

5. South Korea

Source: World Bank/ TMF Group/ Doing Business

  • GDP (In Trillions): $1.6
  • Income: High income
  • Starting a Business Rank: 7
  • Construction Permits Rank: 9
  • Registering Property Rank: 26
  • Ranks Highest In: Getting Electricity
  • Could Use Improvement In: Getting Credit

South Korea’s economy is booming, thanks to its expertise in technology. The language barrier, however, may impact the ease of doing business, but that’s easily solved by hiring a local consultant. The workforce is highly skilled, and the government offers many incentives for foreign investors. The country relies on exports, and so has strong links with it’s trading partners.

6. United States

Source: World Bank/ TMF Group/ Doing Business

  • GDP (In Trillions): $20.5
  • Income: High income
  • Starting a Business Rank: 28
  • Construction Permits Rank: 18
  • Registering Property Rank: 25
  • Ranks Highest In: Resolving Insolvency
  • Could Use Improvement In: Getting Electricity

The United States accounts for a quarter of all economic activity in the world. It’s also home to a quarter of the top 500 firms globally. It’s shown strong investment growth over the long-term. Unfortunately, there are issues when it comes to compliance. Laws differ from state to state, and federal laws provide an extra complication.

Foreign direct investment in 2018 totalled $4.34 trillion.

7. Georgia

Source: World Bank/ TMF Group/ Doing Business   

  • GDP (In Billions): $16.2
  • Income: Lower middle income
  • Starting a Business Rank: 1
  • Construction Permits Rank: 4
  • Registering Property Rank: 1
  • Ranks Highest In: Starting a Business
  • Could Use Improvement In: Resolving Insolvency

This was a surprise entry onto the ease of doing business list. But Georgia has been working hard to make it easier for foreign investors to start businesses. It’s easy to start a business, and also easy to buy a property. Part of the attractiveness of this market is that it’s trimmed the red tape significantly.

Azerbaijan invests heavily in the country, contributing $224 million in foreign direct investments in 2017.

8. United Kingdom       

Source: World Bank/ TMF Group/ Doing Business/Statista

  • GDP (In Trillions): $2.8
  • Income: High income
  • Starting a Business Rank: 11
  • Construction Permits Rank: 12
  • Registering Property Rank: 28
  • Ranks Highest In: Protecting Minority Investors
  • Could Use Improvement In: Registering Property

The United Kingdom has a strong economy and actively encourages foreign investment. It’s ideally located for those wanting to gain access to the rest of Europe. The current stalemate as regards Brexit is a factor to consider but not enough to be a reason to consider reducing investment.

Foreign direct investment in 2017 totalled just over £92 billion.

9. Norway

Source: World Bank/ TMF Group/ Doing Business

  • GDP (In Billions): $434.8
  • Income: High income
  • Starting a Business Rank: 13
  • Construction Permits Rank: 15
  • Registering Property Rank: 8
  • Ranks Highest In: Enforcing Contracts
  • Could Use Improvement In: Getting Credit

Norway is a first world, stable country. It has substantial natural resources and a very strong economy. They also make it simple for foreigners to invest. You have access to a highly-skilled workforce.

It’s not a member of the EU, but that doesn’t matter – it is a partner in the European Economic Area Agreement. If you’re looking for a good balance between a doing business rank and a prime European position, Norway is an excellent option.

10. Sweden

Source: World Bank/ TMF Group/ Doing Business

  • GDP (In Billions): $551
  • Income: High income
  • Starting a Business Rank: 10
  • Construction Permits Rank: 17
  • Registering Property Rank: 6
  • Ranks Highest In: Registering Property
  • Could Use Improvement In: Getting Credit

Sweden scores highly on the globalization scale. It’s extremely easy to get a business started here. You have access to a highly-skilled, efficient workforce. Stockholm comes second to Silicone Valley as a tech hub. Corporate taxes are low(but bear in mind personal income taxes are among the highest on Earth), the country is stable, and the residents enjoy a high standard of living.

It’s not the most business-friendly country on our list, but it’s giving Silicone Valley a good run for its money. Could it eclipse Silicon Valley in the future? We’ll have to wait and see. Foreign direct investments into Sweden in 2017 totaled $325 billion.

 11. Lithuania       

Source: World Bank/ TMF Group/ Doing Business/ Statista

  • GDP (In Billions): $53.3
  • Income: High income
  • Starting a Business Rank: 18
  • Construction Permits Rank: 6
  • Registering Property Rank: 2
  • Ranks Highest In: Resolving Insolvency
  • Could Use Improvement In: Registering Property

The CEE region tends to be viewed in a negative light. Generally speaking, red tape, corruption, and sometimes a lack of infrastructure put investors off. There are exceptions, though, and Lithuania is one of these.

While other countries in the region have dropped in the rankings, Lithuania has improved its position on the ease of doing business index.

It gives access to European markets without the high costs associated with premier destinations like Lithuania. Foreign direct investments into Lithuania in 2018 totalled $17.8 billion.

12. Malaysia

Source: World Bank/ TMF Group/ Doing Business/ Statista

  • GDP (In Billions): $354.4
  • Income: Upper middle income
  • Starting a Business Rank: 31
  • Construction Permits Rank: 1
  • Registering Property Rank: 7
  • Ranks Highest In: Dealing with Construction Permits
  • Could Use Improvement In: Starting a Business

Malaysia is strategically placed. It has a democratic government, a strong economy, and a healthy attitude towards external investment. The country is working on becoming a developed nation and has a strong infrastructure and a willing workforce.

Foreign direct investments from the United States to Malaysia in 2018 totalled 6.53 billion Malaysian ringgit.

13. Mauritius

Source: World Bank/ TMF Group/ Doing Business   

  • GDP (In Billions): $14.2
  • Income: Upper middle income
  • Starting a Business Rank: 4
  • Construction Permits Rank: 4
  • Registering Property Rank: 8
  • Ranks Highest In: Paying Taxes
  • Could Use Improvement In: Trading across Borders

Mauritius ranks as one of the top economic performers in Africa. It offers excellent tax concessions and actively encourages the development of a free market. It’s a strong and stable country, unlike many others on the continent.

14. Australia

Source: World Bank/ TMF Group/ Doing Business/ Statista

  • GDP (In Trillions): $1.43
  • Income: High income
  • Starting a Business Rank: 5
  • Construction Permits Rank: 8
  • Registering Property Rank: 31
  • Ranks Highest In: Getting Credit
  • Could Use Improvement In: Trading across Borders

Australia is a destination of choice for many companies. If you want to get access to the Asia Pacific area, it’s an excellent base to work from. Its economy is growing fast and ranks highly in the Organisation for Economic Co-operation and Development.

Compliance issues do make it more difficult for businesses, but not impossible. Foreign direct investments into Australia in 2018 totalled $60.95 billion.

15. Taiwan

Source: World Bank/ TMF Group/ Doing Business/ Statista

  • GDP (In Billions): $589.9
  • Income: High income
  • Starting a Business Rank: 12
  • Construction Permits Rank: 2
  • Registering Property Rank: 11
  • Ranks Highest In: Getting Electricity
  • Could Use Improvement In: Getting Credit

Taiwan offers a strong economy, an entry-point to China, and excellent incentives for foreign investors. The country has been taking significant steps to make it easier for foreign businesses to own property and invest.

Foreign direct investments in Taiwan were estimated at $3.6 billion in 2018.

16. United Arab Emirates

Source: World Bank/ TMF Group/ Doing Business

  • GDP (In Billions): $414.2
  • Income: High income
  • Starting a Business Rank: 16
  • Construction Permits Rank: 4
  • Registering Property Rank: 4
  • Ranks Highest In: Getting Electricity
  • Could Use Improvement In: Trading across Borders

The UAE puts restrictions on foreign ownership. The Free Zones are typically easier for foreign businesses to be established in. Companies must be formally registered in the UAE and must apply for a company license.

Of all the economies ranked here, the UAE may be the most interesting. They are oil-rich countries with little need for foreign investment. Instead of simply relying on their oil revenues, they’ve actively encouraged direct foreign investments to further shore up their economy.

 17. North Macedonia

Source: World Bank/ TMF Group/ Doing Business

  • GDP (In Billions): $12.7
  • Income: Upper middle income
  • Starting a Business Rank: 12
  • Construction Permits Rank: 3
  • Registering Property Rank: 12
  • Ranks Highest In: Protecting Minority Investors
  • Could Use Improvement In: Starting a Business

North Macedonia is one of the best Balkan states for businesses to work in. The country is heavily reliant on foreign investment, and so they’ve taken great strides in cutting through red tape.

18. Estonia

Source: World Bank/ TMF Group/ Doing Business/ Statista    

  • GDP (In Billions): $30.3
  • Income: High income
  • Starting a Business Rank: 8
  • Construction Permits Rank: 11
  • Registering Property Rank: 3
  • Ranks Highest In: Enforcing Contracts
  • Could Use Improvement In: Protecting Minority Investors

Estonia is a small country, but it is strategically located on the Baltic Sea. It scores highly in the business climate rankings because it has strong ties to Western Europe and also the Scandinavian countries. It’s a good foundation if you want to access the CEE countries, Russia, and EU members. Foreign direct investments into Estonia in 2018 totalled $25 billion.

19. Latvia 

Source: World Bank/ TMF Group/ Doing Business/ Statista

  • GDP (In Billions): $34.8
  • Income: High income
  • Starting a Business Rank: 15
  • Construction Permits Rank: 32
  • Registering Property Rank: 16
  • Ranks Highest In: Enforcing Contracts
  • Could Use Improvement In: Getting Electricity

Latvia is second to last on our list of the top countries to do business in.  Don’t count them out just yet, though. Latvia has been working hard to improve its administrative procedures. There’s still a way to go, but they’ve made big strides over the last few years. Foreign direct investments into Latvia in 2018 totalled $17.3 billion.

20. Finland

Source: World Bank/ TMF Group/ Doing Business

  • GDP (In Billions): $274
  • Income: High income
  • Starting a Business Rank: 23
  • Construction Permits Rank: 21
  • Registering Property Rank: 18
  • Ranks Highest In: Resolving Insolvency
  • Could Use Improvement In: Getting Credit

Finland is an ideal base if you want to access the Baltic States, Russia, and Europe in general. It has the advantage of being a stable country with a strong economy. It’s also developed a reputation for technological advances.

Final Notes

And, there you have it. The top twenty countries evaluated in terms of the ease of doing business. If you’re considering expanding operations to a new country, these are the places to start looking!

Sources

ABOUT AUTHOR

Fiona worked in the retail banking industry for 16 years. She felt that she could put her experience to good use in helping small businesses grow. Web writing was a great fit and sparked a new career for her. She believes that her flexible working schedule gives her more time to spend painting. She loves being at home all day with her schnauzers and her cat. For Fiona, it's furbaby Friday every day of the week.

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