Every business requires start-up costs. And in most countries, that involves paying a business registration fee to the government. The size of the fee can depend on the nature of your business and how you want to incorporate. But the biggest variable is location. A handful of nations have waived all registration fees, while others charge thousands of dollars.
Using data from a recent World Bank report, BusinessFinancing created a map of the start-up fees in every country. Its researchers also looked at the cost of starting a business in relation to average national salaries. And their findings highlighted some interesting facts about the nature of global economic inequalities.
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Starting a business in Europe
Italy is the most expensive place to launch a business in Europe, with registration fees of $4,914.85. This wouldn't deter foreign investors with a decent amount of start-up capital. However, the registration fees are a big obstacle for ordinary Italians who want to launch their own business. The registration fee is double the average monthly income.
Two of Europe's smallest nations, Iceland and San Marino, have some of the largest new business costs on the continent. Entrepreneurs in San Marino have to pay $4,708 to start trading, while those in Iceland have to pay more than $1,000 to register their businesses.
The UK is one of the cheapest places to register a business in Europe. It costs just $17 to file for registration. Only Slovenia can beat that. It's the one European country with zero start-up fees. But there’s a catch. You'll need to have $9000 in your business account before launching.
Doing business in North America
Small business has been an integral part of American life since the first settlers arrived. In fact, many historians believe the US was built on the back of small businesses. In the old frontier days, all you needed was something to sell and a place to sell it. Things are a little different now. The US government requires a registration fee of $725 from all new businesses.
Many people dream of escaping the rat race and setting up shop in exotic, sun-drenched locations. It could be a bar down by the beach, a little harbourside restaurant, or a luxury bed and breakfast. But, unfortunately, you'll have to make a sizable investment if you want to live the dream in the Bahamas, Barbados, or Antigua. All of these countries charge a four-figure start-up fee.
Start-ups in South America
Can you start a new company in South America for less than £1? Yes, but only if you go to Venezuela. For just $0.21, you can reserve and register a company name. You'll even get a free mention in a local newspaper.
Start-up fees are super cheap in Chile - $16.32. And many other countries across South America are affordable places for national and international business people looking. You can register a business in Argentina, Brazil, and Paraguay for less than $250.
Suriname is the dearest place to start trading in South America - and by quite a distance. Registering a new business here will cost you just over $3,000. And the costs don't stop there. Entrepreneurs are expected to pay an additional 8% of the fee to cover administration costs. These high barriers to entry make it also impossible for most Surinese people to become business owners. The average national salary here is $4,700.
The best countries to start a business
New Zealand is officially the best country in the world to launch a business, according to the World Bank Business report. Registration costs less than $50 ($43.38, to be exact). That equates to less than 2% of the average national salary. And the entire registration process takes less than a day to complete.
South Korea also topped the World Bank list for the best places to start a new venture based on affordability. Again, 2% of the average monthly salary is enough to get a business up and running in South Korea’s exciting and forward-thinking economy.
Today's economy is global. But, unfortunately, the ability to participate in a meaningful way still depends on where you are born.