In which country to start a business as an expat? When we talk about expatriation, we mostly talk about people who: start a new job abroad, are sponsored by an international company, those who are transferred or exchange students but very rarely about entrepreneurs.
If you have the soul of a creator, we have based ourselves on two rankings to select for you the best countries to create your company in expatriation:
- The recent Best Countries report that takes into account 5 criteria: affordability, bureaucracy, manufacturing costs, connection to the rest of the world and access to the country’s capital.
- The World Bank’s Doing Business 2020 study, which measures the 12 areas of the business life cycle in 190 economies around the world.
Setting up an expat business in Singapore
It is one of the “four Asian tigers”, countries whose economies industrialized in the second half of the 20th century. In terms of GDP per capita, the city-state surpasses Hong Kong, South Korea and Taiwan with more than 100,000 US dollars per capita.
Considered one of the best countries to start an expat business, Singapore is also one of the few Asian countries to have received an AAA rating from three credit rating agencies.
Its unique corporate tax rate, stable government and economy, and free trade agreements with many countries make it an attractive destination. Similarly, the simplicity of the business creation process and the low crime rate make it easy and safe to do business here.
For expats looking to start a business, Singapore offers advantages such as low production costs, low tax rates, minimal bureaucracy to overcome and limited risk of corruption in business and government (5th in the latest Corruption Perception Index 2022).
The City-State focuses on the largest industries: telecommunications, banking, transportation and manufacturing. It is also important to consider that tourism contributes greatly to the local economy.
Indonesia, one of the largest archipelago states
Indonesia is one of the largest archipelago states with a population of 271 million. It is one of the fastest growing economies in Southeast Asia. The country offers many business opportunities in various sectors such as tourism, energy, agribusiness, information technology, finance and business.
In addition, Indonesia has signed trade agreements with several countries, offering advantages in terms of international trade and access to other markets. Finally, let us note the strategic location of the country: located in the heart of Southeast Asia, which facilitates trade with other countries in the region. According to your type of activity and the amount to be invested, 3 types of companies can be considered: the PT PMDN, the PT PMA and or the local representative office.
Starting a business in New Zealand.
Located east of Australia, New Zealand consistently ranks high in the world for its ease of doing business. The country offers streamlined bureaucratic processes, efficient regulations and a business-friendly environment that makes it easy to start and run a business.
The country has a legal system that protects property rights and enforces contracts. This stability creates a safe environment for business, which gives entrepreneurs confidence in their investments. Also important, the country is known for its political stability, transparent governance and low levels of corruption. New Zealand has a robust and diversified economy, supported by sectors such as agriculture, tourism, technology and renewable energy.
Denmark has several arguments to seduce expat entrepreneurs.
According to the Doing Business report, its strengths include ease of obtaining building permits, solving insolvency problems and flexible labor regulations.
Registering a company in Denmark has a simplified process. The Danish Business Authority (Erhvervsstyrelsen) provides online resources and guides, which facilitate the registration process. Well-developed digital services that allow expats to interact with government agencies, complete paperwork and access necessary information remotely.
Another element to facilitate communication in a country where the language is not the easiest to learn, Denmark is consistently ranked among the top countries in the world for English proficiency. This means that as an expat, you can easily communicate with government officials, service providers and potential business partners, even if you are not fluent in Danish.
Hong Kong is the third easiest place for a foreigner to start a business. This special administrative region of China is known for its business-friendly environment, low taxation and market economy. The government has implemented favorable policies to attract foreign investment and promote entrepreneurship, making it easier for expats to start and operate businesses.
From a tax point of view, Hong Kong is subject to a territorial tax regime, which means that only income derived from Hong Kong is subject to tax. This tax advantage coupled with the low corporate tax rate makes it an attractive destination for companies.
The city is known for its excellent infrastructure and commercial space is readily available.
Finally, intellectual property protection is taken seriously and strict regulations are in place. There are various dispute resolution mechanisms available to companies.
United Arab Emirates
A fashionable destination for the last ten years, expatriating to the United Arab Emirates can be a winning bet for entrepreneurs.
The UAE offers many opportunities for entrepreneurs. Many businesses are based on real estate and consulting but it is relatively easy to find your niche in the market.
Its main attraction is the free trade zones, since they allow companies to import and export goods with 0% tax rates. However, from June 2023 the UAE will introduce the 9% corporate tax to secure its place as a global business center.
What are the criteria for creating a company abroad?
Apart from the language barrier, setting up a company abroad is a decision that requires careful consideration, especially if the company is not solely based on the digital business. A business creator will have to pay attention to various factors such as:
- Market research: understanding the demand for the product or service, existing competition, economic trends, cultural preferences and any other relevant aspects.
- Regulations and legislation: Be aware of local regulations regarding business creation, licensing and permits, tax requirements, labor standards, protection of intellectual property rights, and any other regulatory framework that may apply to your business.
- Economic conditions: Evaluate the country’s economic conditions, including political stability, government policies on foreign investment, tax incentives or other business benefits, exchange rates and inflation rates.
- Infrastructure and logistics: Consider the state of the country’s infrastructure, including transportation, telecommunications, energy, access to raw materials, and the supply chain. Strong infrastructure can facilitate business operations.
- Workforce and skills: Assess the availability and quality of the local workforce. Consider the skills needed for your business and the ability to recruit and train qualified employees.
- Benefits and costs: Assess the benefits and costs of operating in the target country. This may include tax benefits, government subsidies, labor costs, operating costs, taxes, tariffs and trade tariffs.
- Political and legal risks: Assess political risks, stability issues, potential conflicts, corruption risks, cultural differences and the country’s legal systems. Understand the rights and obligations as a foreign entrepreneur.
- Local networks and partnerships: Establish contacts with local partners, consultants, lawyers or other professionals who can help you understand the local market, establish business relationships and facilitate administrative processes.
- Language and cultural barrier: Consider language and cultural differences. It may be essential to have a good understanding of the local language or to hire people with language and cultural skills to facilitate interactions with clients, partners and local authorities.
From a business point of view, the choice of a country to create a company depends on 5 general factors:
- At the start of the activity: What are the procedures, the deadlines and the capital to bring for the creation of a company? Also, what are the regulations concerning recruitment in the country of expatriation?
- Settling up the premises: How easy is it to obtain a building permit? To what extent can a foreigner rent a place?
- Financing your company: how to get a loan?
- Concerning the management: what is the tax rate, how to trade cross-border?
- Growing up: what about contract enforcement and insolvency?
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Foyer Global Health is the leading international provider of health insurance and services for digital nomads, expats and mobile people around the world.
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