Ajit Karn
According to a recent research conducted by the AI website Business Name Generator (BNG), India is one of the most difficult countries in which to launch a startup. To create this global startup index, a website powered by artificial intelligence analyzed 50 countries based on a variety of factors, including business tax rates, GDP growth, and the cost of startup procedures, to determine the best place to launch a business.
Additionally, the BNG study examined each nation’s population, average monthly salary, GDP, and GDP per capita. In addition, the happiness index, the expense of living, and the quality of life were factored into the calculation of the final index score to determine the location with the most content employees, as these factors contribute to productivity and growth.
According to the BNG study, the top ten countries for startup formation in 2023 are all European, with the Czech Republic ranking first. Finland, Sweden, Estonia, and Slovakia rounded out the top five.
It should not come as a surprise that two Nordic countries rank in the top five, given that they typically perform well in surveys focusing on quality of life and contentment. Moreover, Europe is attracting tech talent by providing digital nomad visas and remote working programs.
According to the study, the Czech Republic is the best place to establish a startup. Although its quality of life score is the lowest among the top ten, it is one of the least expensive places to establish a business, costing only 1.1% of GNI (gross national income) per capita. The cost of labor is also reasonable, with average monthly salaries of $1,800 USD. In addition, corporations enjoy a relatively low corporate tax rate of 19%.
Finland, which is ranked as the second-best nation for startups, has a competitive advantage over other nations due to its comparatively low business tax rate of 20% and low cost of starting a business of just 0.7% of GNI. Additionally, the country is home to the happiest individuals in the world, which has positive implications for business leaders. Studies indicate that happy employees result in enhanced business outcomes, such as increased productivity, improved work quality, and higher employee retention rates.
Sweden rounds out the top three, where the cost of launching a venture is only 0.5% of per capita GNI. It also has the highest per capita GDP among the top five countries at USD 59,324 and a relatively modest monthly cost of living of USD 881.20 (excluding rent). This indicates that the country’s more than 10 million residents (the largest population among Nordic countries; nearly twice as many as the next largest) have a substantial disposable income. It is well-positioned to promote a local startup because it has a large consumer base. However, Sweden’s business tax rate of 20.60 percent is marginally higher than those of the Czech Republic and Finland.
Compared to other nations, the United Kingdom ranked sixth in Global Startup Index .
The United States generates the greatest number of startups in the world, so it must be included in any study of startups. The United States was ranked seventeenth due to its low GDP economic growth rate of 1.6%, the third lowest in the world. State-specific business tax rates are also relatively high, with an average rate of 25.8 percent. Despite this, the study revealed that the United States remains a popular destination for entrepreneurs due to its large market, well-developed infrastructure, and favorable legal environment for intellectual property protection.
The study also revealed that, with the exception of one country, the five nations with the most difficult startup environments are all located in Asia. Following the Philippines at the bottom of the list are Egypt, India, South Korea, and Vietnam, in that order.
Given the vibrant startup ecosystems in India and South Korea, their position at the bottom of a startup index is somewhat surprising.
South Korea is well-known for its technological prowess and innovation.
According to a 2022 World Economic Forum report on the best countries for entrepreneurs, India rated seventeenth out of fifty countries, while South Korea ranked seventh.
India was rated 44 out of 100 countries in a separate report by StartupBlink, which used more comprehensive criteria to determine its ranking. South Korea was ranked 22nd. In addition to patents, innovation, the availability of technology services, R&D investment, the quality of universities, and English proficiency, the StartupBlink study includes additional parameters such as innovation, patents, the availability of technology services, the quality of universities, and English proficiency.
India is the third greatest startup ecosystem in the world, according to Invest India, with over 77,000 startups. From 2015 to 2022, startup funding in India increased 15 times, the number of investors increased nine times, and the number of incubators increased seven times. Additionally, India is home to 107 unicorns valued at a total of USD 340.79 billion.
The BNG research ranked India as the third most difficult country for launching a startup, primarily due to its low quality of life and satisfaction index scores. This could have a significant impact on job satisfaction, productivity, and overall well-being in the workplace, according to the report. Additionally, the country’s 30% business tax rate may offset some of the savings obtained from low labour costs compared to other countries in the study.
The cost of launching a business in the archipelago nation is the primary reason why the Philippines has been ranked as the most difficult place to start a business. At 23,3 percent of per capita GNI, it is the highest among all of the countries analyzed. Furthermore, the average salary is relatively low at USD 850 per month, and the quality-of-life score for employees is the lowest (81 out of a possible 240) among all the locations ranked, which could negatively impact employee engagement, job satisfaction, and productivity.
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One of the reasons given by BNG for conducting the study is to assist business owners in selecting the optimal location. Adaline Lefe, the author of the report, stated, “Each country has its own unique advantages for businesses, resulting in variations in the optimal environment for entrepreneurs. In today’s interconnected world, common business challenges can amplify the stress of operating a business, making it more important than ever for entrepreneurs to choose the right location for their company.”
