By Lee Kah WhyeSingapore, April 3 (ANI): In a recent study by AI website Business Name Generator (BNG), India was ranked among the most challenging country to launch a startup. To create this global startup index, the AI-powered website analyzed 50 countries taking into account, among other things, corporate tax rates, GDP growth and the cost of start-up procedures to determine the optimal place to start a business.
The BNG study also looked at each country’s population, average monthly salary, GDP and GDP per capita. In addition, happiness scores, cost of living and quality of life were factored into the calculation of the final index score to find out where employees are most satisfied, as these metrics help drive productivity and growth.
Based on the BNG study, the top ten countries to launch a startup in 2023 are all European with the Czech Republic emerging as numero uno. Finland, Sweden, Estonia and Slovakia were the top five in that order.
Since the Nordic countries usually do well in surveys that emphasize quality of life and happiness, it should not be a surprise that two of them make the top five. In addition, Europe is attracting tech talent by offering digital nomad visas and telecommuting.
In the study, the Czech Republic emerged as the best country to start a startup. Although its quality of life score is the lowest in the top ten, it costs just 1.1 percent of GNI (gross national income) per capita to start a new business, and it is one of the cheapest places to start a business. Labor costs are also reasonable, with wages averaging $1,800 per month. In addition, the companies have a comparatively low corporate tax rate of just 19 percent.
Ranked as the second best country for start-ups, Finland has an advantage over other countries in its relatively low corporate tax rate of 20 percent and low cost of starting a business at just 0.7 percent of GNI. The country is also home to the world’s happiest people, which has positive implications for business leaders. Studies have shown that happy employees lead to better business results, including increased productivity, improved work quality and higher retention rates.
Rounding off the top three is Sweden, where the cost of starting a startup is only 0.5 percent of GNI per capita. It also has the highest GDP among the top five countries at US$59,324 per capita and a reasonably low cost of living at US$881.20 per month excluding rent. This indicates that its more than 10 million inhabitants (the largest population among the Nordic countries; almost twice as many as the second largest) have a large disposable income. With a large consumer base, it is well positioned to support a local startup. However, the corporate tax in Sweden is slightly higher compared to the Czech Republic and Finland at 20.60 percent.
By comparison, the UK was ranked sixth.
A startup study is not complete without the United States as it produces the largest number of startups in the world. The US was placed 17th due to its low GDP growth of 1.6 percent – the third lowest overall. Corporate tax rates that differ from state to state are also relatively high with an average rate of 25.8 percent. Despite this, the study highlighted that the US remains a popular destination for entrepreneurs due to its large market, well-developed infrastructure and supportive legal system to protect intellectual property rights.
The study also revealed that the five most challenging countries to produce a successful startup are all in Asia except one. The Philippines has the dubious honor of being at the bottom of the list followed by Egypt, India, South Korea and Vietnam respectively.
It is quite surprising for India and South Korea to be at the bottom of a startup index given the vibrant startup ecosystems of these two countries.
South Korea is well known for being a high-tech hub and for its innovation.
Based on a World Economic Forum report on the best countries for entrepreneurs published in 2022, India was ranked 17th out of 50 countries and South Korea ranked 7th.
In another research report by StartupBlink, which uses more comprehensive criteria to create its ranking, India was ranked 44th out of 100 countries and South Korea 22nd. The StartupBlink study also includes parameters such as patents, innovation, availability of technical services, RD investments, university quality and English proficiency.
Based on Invest India, India is the third largest startup ecosystem globally with over 77,000 startups. From 2015 to 2022, India saw a 15-fold increase in startup funding, a nine-fold increase in the number of investors, and a seven-fold increase in the number of incubators. India is also home to 107 unicorns with a total valuation of USD 340.79 billion.
The BNG research ranked India as the third most challenging country to launch a start-up, mainly due to its low quality of life score and poor happiness index score. The report said: “This can greatly affect job satisfaction, productivity and general well-being in the workplace.” Additionally, the country’s 30 percent corporate tax rate may offset some of the savings from affordable labor costs, which is low compared to other countries in the study.
The biggest reason why the Philippines has been ranked as the most challenging country to start a business in is the cost of starting a business in the archipelago nation. It is the highest among all the countries in the analysis at 23.3 percent of GNI per capita. “Furthermore, the average salary is relatively low, at $850 per month, and the employee quality of life score is the lowest (81 out of a possible 240) among all places ranked, which can negatively impact productivity, employee engagement, and job satisfaction.” One of the reasons BNG offers for conducting the study is to help entrepreneurs choose the right location for their business. The author of the report, Adaline Lefe, said: “Each country has its own distinct advantages for businesses, leading to variations in the best environment for startups. In today’s interconnected world, common challenges facing businesses can amplify the pressures of running a business. , making it increasingly important for entrepreneurs to choose the right location for their business.” (ANI)
Source: sn.dk