While ranking this 10 Easiest Countries to Register a Company, we had this thought in mind that doing business is not easy, but that doesn’t mean starting should be a Herculean task. Doing business is a serious business and just like any other legal activity, it does require lots of paperwork and following procedures before any such activity can start generating revenue for the promoter. It involves identifying the founders and stakeholders, documenting objectives of your business activities, identifying your resources (monetary, manpower and other) and other such steps. The procedures vary from country to country and within the same country, it may vary from state to state. Furthermore, there are different authorities to monitor regulate and facilitate business activities pertaining to a specific sector. There are different authorities to deal multination companies and local firms. Many countries spread out a red carpet to companies from certain industry whereas in some countries any foreign company is seen as “invading” the local business landscape.
All said and done, every country needs a healthy and conducive policy regime to accelerate economic activities that would cater to the domestic needs at the least. Countries and states within the countries alike roll out incentives, tax breaks and other such assistance to reach out to companies to persuade them to set up their facilities. Companies look for those places which have investor friendly procedures, availability of good infrastructure and a readily available market. This article only deals with the ease with which you can register your business in a specific country. Businesses make money by doing the business activities and as such it’s essential that they get up and running at the earliest. Finding out the suitable location for factories/ offices, registration, paying up fees and taxes and all such activities may delay the commencement of setting up of business. Furthermore when you are setting a Greenfield facility, construction related permits, actual construction activities might take up quite a long time of your project schedule.
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Local tax laws can affect a business in terms of Profitability and if you need some head start on which business ideas you should look at to ensure higher profits, do go through our article on The 7 Most Profitable Businesses You Could Start. But we should remind you through the words of famous entrepreneur Mr. Henry Ford “A business that makes nothing but money is a poor kind of business”.
In order to understand the ease with which one can register a company in a specific country, we looked at various parameters that are listed in the following paragraphs. For data related to these parameters, we looked at “Doing Business 2015” published by World Bank which is the most authoritative reporting on country studies. However, we limited our parameters only to the time taken to register the company, and thereby our rankings may differ from the rankings of the World Bank.
The parameters we used to rank Countries to Register a Company are listed below. Once again, we would like to reiterate that this ranking does not deal with the time taken to make your company operational, which we might cover in one of our other articles for your reading. Furthermore, it is interesting to observe that there doesn’t seem to be any relation between how easy it is to start a business and how much business a country attracts if you look at foreign direct investment as criteria.
Number of Procedures to follow– A company is started for a specific purpose. And when you register your company, plenty of information is required to be collected by the sanctioning authorities in order to grant permission to start a business. Such information would be related to the promoters of the company, the nature of the business, its impact on local population and environment. Furthermore, all this information needs to be legally vetted so that the same could be acceptable in a court of law. The procedures can be legal like submitting notarized copies of companies’ financial information as an opening of bank accounts. With the advent of internet and digitisation of information, many of these procedures have become an online affair and have reduced the requirement of third party interventions or middlemen.
Time needed to complete above mentioned procedures– Unfortunately, less procedure doesn’t necessarily mean faster registration of your company. Today most of the countries on our list have facilitated online registration process and some even have made the presence of promoters redundant while the procedures are completed.
The Cost of Registering a New Business– These costs include the fees that you have to pay to the government authorities in order to include your company’s name in their registers and to obtain the legal status in that country. We obtained the data about registration costs as a % of the Per Capita Income from the Wold Banks Doing Business report to give you an idea of how much money you will require for starting a new business.
We researched 40 countries under these parameters. Scores were given to each country for every parameter, and then based on the overall scores for each of the countries, the following list was prepared, ranking countries with increasing ease of registering a company. Countries with lesser number of procedures and shorter time duration to complete these procedures have better rankings in this list.
10. Lithuania
Time Taken: 3.50 days
Procedures (number): 3.00
Cost as % of Per Capita Income: 0.70
Cost in USD: 104.30
This country climbed up 8 places in the World Banks (WB) Doing Business Ranks to reach number 11 among the 189 countries. It also changed the procedures to make it more pro-business. The total cost of starting a business is 0.7% of per capita income or USD 109.82
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9. Portugal
Time Taken: 2.50 days
Procedures (number): 3.00
Cost as % of Per Capita Income: 2.30
Cost in USD: 475.41
Portugal provides the possibility of completing the registration process through a single registration center. The process involves three procedures, two of which take 1 day each and the process for registering for social security takes less than one day. The costs are relatively high compared to other countries on the list.
8. Hong Kong SAR, China
Time Taken: 2.50 days
Procedures (number): 3.00
Cost as % of Per Capita Income: 1.40
Cost in USD: 537.88
The official website of Govt of Hong Kong states that you can get the registration certificate (which is one of the three processes) in 30 minutes flat if you use the online process. The cost of setting up a business is not so high either; however it is the highest among these 10 countries on the list, even in absolute terms at USD 537.88
7. Australia
Time Taken: 2.50 days
Procedures (number): 3.00
Cost as % of Per Capita Income: 0.70
Cost in USD: 458.64
It has the same number of procedures as Lithuania and the same amount of cost as % of income per capita, however, it only takes two and a half days to register a new business in Australia. In 2012, 185,000 new limited liability companies were registered in Australia. The cost of registering a new business is only USD 472.31
6. Singapore
Time Taken: 2.50 days
Procedures (number): 3.00
Cost as % of Per Capita Income: 0.60
Cost in USD: 324.24
This is the best country to do business as per WB’s report and WB does seem to agree with us (or vice versa) as this country ranks 6th as per WB when it comes to starting a business. The country does claim to have right pool of talent and pro-business regulations to make it world’s best place to conduct your business and number 6th on 10 Easiest Countries to Register a Company list.
5. Armenia
Time Taken: 3.00 days
Procedures (number): 2.00
Cost as % of Per Capita Income: 1.00
Cost in USD: 37.90
You can register your business in just three days in Armenia and the country has further facilitated the process by allowing the prospective companies to complete all the procedures at a single location. Furthermore, you have to order a company seal, and the whole process can be done for USD 32.85 in case you want the seal in one day. If you can wait for 30 days for the seal to arrive, the costs of registering a company in Armenia can be as low as USD 6.
4. Canada
Time Taken: 5.00 days
Procedures (number): 1.00
Cost as % of Per Capita Income: 0.40
Cost in USD: 208.80
Registering a company in Canada involves only one procedure which can be completed online. Canada also has pro-investor policies which makes it one of the easiest countries in the world to do business. However, this single procedure would take up to 5 days and that has pushed this country down on our rankings.
3. Georgia
Time Taken: 2.00 days
Procedures (number): 2.00
Cost as % of Per Capita Income: 3.40
Cost in USD: 121.38
This relatively small country ranks very high on the WB’s Doing Business list at 5th place. It takes only two procedures, namely getting your company in Entrepreneurial Register and getting your company a bank account. All this can be done in 2 days and for merely USD 121.
2. Macedonia, FYR
Time Taken: 2.00 days
Procedures (number): 2.00
Cost as % of Per Capita Income: 0.60
Cost in USD: 28.80
Macedonia, located in Southeastern Europe, was part of Yugoslavia. It became independent in 1991 and had shown steady economic growth since then. The government has been reforming its policies to make it more pro-business. It requires only two days and two procedures to start a company in the Macedonian capital of Skopje. And all of this costs between USD 28.80 and 59.73.
1. New Zealand
Time Taken: 0.50 days
Procedures (number): 1.00
Cost as % of Per Capita Income: 0.30
Cost in USD: 121.44
New Zealand claims that you can start a business in New Zealand in just half a day and there is only one procedure to follow to register your company. All that takes, approximately, USD 121. Fewer procedures, super fast registration timeline and relatively low costs for registration make New Zealand 1st amongst the 10 Easiest Countries to Register a Company.
