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.
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.