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Successful business: best countries for startups

Monday, August 2, 2021

Quite a few conditions must converge for a startup to take off and become successful. The dedication of the founders and a good idea are important, but not the only ingredients. You need good investors, good banking conditions, and an ecosystem of startups around you. It is also important to protect intellectual property rights: when it comes to technology startups, the process of obtaining a patent plays an important role.

Startup Jedi

We talk to startups and investors, you get the value.

Not every country offers all these components of success in one place at the right time. Therefore, many entrepreneurs choose to relocate and launch a startup in the country with the most suitable conditions. There are indeed several points on the world map with a high concentration of “unicorns”, and this is not at all an accident. We’ve put together a list of the best countries to launch a startup.

  • The investor market is more developed; there are many funds, venture capital companies and business angels that are concentrated in one place.
  • Powerful world renowned accelerators (like Y Combinator).
  • Ecosystem of startups: there are dozens and hundreds of businesses in one city or even district that you can cooperate and interact with.
  • Technological development.
  • A more suitable consumer market: greater demand, more solvent buyers.
  • Special legislation that stimulates the development of startups: grants, benefits, subsidies, loyal credit terms.
  • Lower business tax.
  • Comfortable living conditions also play a big role for the development team, which needs to focus on the product.
  • Cheaper or better labour.

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Of course, we have to start with the legendary Silicon Valley: not only because it was there that Google, Apple, Microsoft and the very ideology of startups began, but also because it is still the best place for the birth of startups. Even excluding Facebook, Valley startups generate 10 times more capitalization than their closest competitors, according to a large study by the venture capital fund Founder Collective, which analysed start-up market entrances from 2009 to 2019. And the total value of the first 20 companies is approaching $ 1T.

Pros:

  • An unprecedentedly high concentration of investors, business angels, founders and all participants in the startup system.
  • The best atmosphere of creativity and technological progress that will inspire you.
  • Powerful network: you can meet future investors, partners and co-founders everywhere — in cafes, shops or while jogging.
  • A huge number of thematic events: meetups, conferences and meetings. You don’t have to look for them, you just need to somehow keep up with the most important things.
  • The best professionals and experts gather in the Valley.
  • Experience working alongside some of the world’s best tech companies. Get to know legendary entrepreneurs, inventors and investors.

There are also some Cons of living in the valley, like the high cost of living and labour, many distractions. Entrepreneur Pavel Durov even wrote a big critical post analysing all the cons of living and working in the Valley. According to Pavel Durov, young entrepreneurs should pay attention to Asia with its huge consumer markets, or to European countries with more comfortable conditions for living and doing business. Nevertheless, despite such critical assessments, more and more entrepreneurs move to the Valley, and the stream of successful startups and deals does not dry out.

Startups: Facebook, Uber, Workday, Square, Twitter, LinkedIn, Zoom.

...

The United States is more than just Silicon Valley. There are at least six more technology centres. The same study by Founder Collective indicates that the total number of startups’ exits, that were founded in the United States, but not in Silicon Valley, was more than $250B. Boston, Los Angeles and New York offer good conditions for entrepreneurship.

Pros:

  • Life is cheaper than in Silicon Valley.
  • Tax breaks, business subsidies, many investors and venture capital firms.
  • Developed business culture and high technological development of the country.
  • The proximity of Silicon Valley.

Startups: iRobot, Kiva, Wayfair, TripAdvisor, CarGurus, Snap, The Trade Desk.

...

Germany’s advantage is its high level of economic development and a good business climate. There is no monopoly of several large companies here, so a startup can always join the competition and find its niche. There are many local venture funds and branches of international ones in the country, which facilitates the process of raising investment. An important advantage is the comfort of life, as Germany combines a developed infrastructure with a convenient location in the centre of Europe.

Pros:

  • Low corporate tax rates (15.825%). If the company’s income is less than €8 000 per year, no tax is paid.
  • Ease of starting a business — you can open a business in Germany in 11 days.
  • Highly skilled workforce: 83% of adults have a college degree.
  • A comfortable country for life with low crime rates, transparent laws and convenient infrastructure.

Startups: Rocket Internet, Zalando, Scout24, Trivago, Hybris.

...

The UK remains the banking “heart” of the world and Europe, which gives a great advantage in solving all financial issues for startups. According to a World Bank study, it combines high availability of venture capital with the ease of doing business.

Pros:

  • Numerous venture funds, investors in all areas and financial experts.
  • The offices of the largest banks and financial organizations in the world are located here.
  • You can register a company online in 24 hours with the authorized capital of as little as £1.
  • Lower costs of doing business.

Startups: Just Eat, Poker Stars, Travelport, Zoopla, Skyscanner.

...

Switzerland seeks to complement the title of the capital of banks, watches, alpine meadows and chocolate with the title of the European capital of startups. It is not for nothing that the Swiss city of Zug is called the Crypto Valley. It is a special business zone created specifically for the development of entrepreneurship. Switzerland is the best country for cryptocurrency and blockchain startups. The head offices of banks and leading financial organizations are located here, financiers and experts live and work in the country. Also, it is in Geneva that the headquarters of WIPO (World Intellectual Property Organization) and the Intellectual Property Institute are located, which forms a special attitude towards the protection of intellectual property in the country.

Pros:

  • Special start-up zones for creating innovative businesses.
  • Numerous financial resources, experts from the financial world, a developed banking system.
  • Developed legal framework.
  • The rapid development of the venture capital ecosystem. New venture funds are rapidly appearing and there are many investors here.
  • The world’s best intellectual property protection.
  • A comfortable country for living with a convenient location and a high standard of living for its citizens.

One disadvantage of Switzerland is the high cost of doing business, dictated by the general high standard of living in the country. Each region can establish its own income tax, while the average corporate tax rate is relatively low — 16.6%.

Startups: Lunaphore, Cutiss, Bestmile.

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According to Pavel Durov, startups should think about doing business in Asia. In this case, Singapore is the best Asian country to work on the future “unicorn”. Head offices of major global brands, as well as the headquarters of the Asian division of Google and several financial giants, are located in the financial centre of Singapore Marina Bay. Add to this the rapid economic development, a huge number of experts, specialists and founders from all over the world. Singapore is literally a melting pot, as America was once called. Singapore banks offer start-ups special lending programs, and the government is ready to invest a large amount of funds through grants and subsidies, even to non-residents. Singapore ranks first in the World Bank’s Ease of Doing Business!

Pros:

  • The proximity of Asian countries with huge markets — China, India, South Korea.
  • Many business incubators, high-level accelerators.
  • Government subsidies and government support for innovative businesses.
  • You can open a company in 1–2 days, the best country in the world for the ease of doing business.
  • There is practically no corruption in the country.

Startups: Nitrous IO, SenzeHub, Reebelo, Ottodot.

Only the founding team can decide which country is best for launching a startup. In any case, living and starting a business in another country is a great experience. This is an opportunity that you definitely don’t want to miss out on.

 

2 Aug 2021

 

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