In this article, we take a look at the 5 most capitalist nations in the world. If you want to check out our detailed analysis of capitalism around the world, go to 25 Most Capitalist Nations in the World.
5. Luxembourg
Economic Freedom Score: 80.6
Luxembourg is located in Northwestern Europe. The country’s economy revolves heavily around the private financial sector. It also has a highly skilled workforce due to extensive public spending in higher education.
The country has recorded an addition of 4.7 points in its economic-freedom score since 2017, due to rising business freedom and strengthening rule of law. Its top corporate tax rate is 17% relative to the top income tax rate of 42%.
The monetary stability in the country is well-maintained and being a member of the EU, Luxembourg has 46 preferential trade agreements.
4. New Zealand
Economic Freedom Score: 80.6
New Zealand is located in Oceania. It has a capitalism score of 80.6. It is home to one of the most well-recognized space companies currently based in the US, namely, Rocket Lab. New Zealand’s robust rule of law, government transparency, negligible corruption and entrepreneurial culture makes it one of the most capitalist nations in the world.
Pixabay/Public Domain
3. Ireland
Economic Freedom Score: 82
Ireland has added 5.3 points to its overall global economic-freedom score of 82, since 2017. The country is the second freest in Europe in terms of business. Its top corporate tax rate is only 12.5% relative to its top income tax rate of 41%.
The country’s rule of law is also strong and enforced by an independent judiciary. The banking sector in the country is also stable, with a significant stake of the government. The domestic and foreign companies in Ireland receive equal treatment when it comes to its investment regime, which is efficient and competitive.
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2. Switzerland
Economic Freedom Score: 84.2
Switzerland is the most capitalist nation in Europe, with the highest economic-freedom score in the continent, at 84.2 as of 2022. The country has the lowest corporate tax rates in all of Europe. Its top corporate tax rate, as of 2022, is only 8.5%. Even the country’s top income tax rate is the lowest in Europe, and one of the lowest in the world, at 11.5%.
Switzerland is considered an international tax haven due to its low taxes and privacy laws, which are very attractive for businesses from around the world. Its banking was also popular for wealth offshoring, until it became a signatory to Common Reporting Standards (CRS) and enforced the Automatic Exchange of Information in 2017.
1. Singapore
Economic Freedom Score: 84.4
Singapore is an Island country in Southeast Asia and is the most capitalist nation on Earth, with the highest economic-freedom score of 84.4. Even though its top corporate tax rate is 17%, higher than that of Switzerland, its government’s subsidies, grants, and capital injections to businesses accounted for 17% of its GDP in 2021, according to the IMF. This makes the government of Singapore one of the most pro-business in the world.
The country has 27 preferential trade agreements as of 2022 and its trade-weighted mean tariff rate is 0%. The workforce is also highly educated, owing to public investment in higher education. The rule of law is strong and property rights are enforced efficiently.
Pixabay/Public DOmain
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