Starting a business can be difficult enough at the best of times. It takes dedication, time, effort and the mental fortitude of a stubborn and blinkered mule. There will be challenges to overcome and trials and tribulations that will test our resolve; but the very first steps all budding entrepreneurs have had to undertake is getting a business registered. It’s not always as easy as it sounds!

The process of registering a business can often differ remarkably from country to country where local rules and regulations can either encourage, or deter entrepreneurship. The most recent report compiled by the World Bank and simply called “Doing Business” has produced an analysis of 189 countries throughout the world and ranks how easy it is to “do business” in each of them.

The report has often proved to be a hotbed of gossiping, arguing and consternation, especially from China who ranks 90th behind Antigua and Barbuda.

It presents eleven business regulations that determines (from a statistical perspective at least) which countries are best suited for economic and business growth.

Eleven Business Regulations – World Bank Report

  1. Starting A Business
  2. Dealing With Construction Permits
  3. Getting Electricity
  4. Registering Property
  5. Getting Credit
  6. Protecting Minority Investors
  7. Paying Taxes
  8. Trading Across Borders
  9. Enforcing Contracts
  10. Resolving Insolvency

This years report has seen a large number of methodological changes following the recommendations from South African planning minister Trevor Manuel.

Rather that aggregating scores across the eleven distinct regulations, the World Bank has constructed a “Distance to Frontier” score that essentially measures a country’s progress when compared to the best practice ”frontier”. Put simply, each country can assess its progress from previous years based on a score out of 100, not solely on its rankings.

The first of these eleven “business regulations” examines the process of starting a business and compares procedure time, cost and the minimum capital required to start a limited liability company from country to country.

While certain countries rank highly for the “ease of doing” business, they can actually take significant time and resources to get your business idea up and running.

Austria for example is ranked 21st in the world and perceived to be a good place to do business, but the arduous registration process ensures their rankings fall to 101 when you consider that it can take up to 22 days to see your company come to fruition. Paperwork and bureaucracy providing a Schwarzenegger sized deterrent for the ambitious start-up community.

top european countries to start a business

Company registries often hold the key to providing businesses with an identity that allows your initial business idea to take it first steps towards becoming a legal business entity ready for trading.

What Do Company Registries Do?

  • Records and updates information on new and existing companies
  • Deregisters insolvent organisations
  • Conducting company name searches
  • Processing business applications
  • Enables the government to measure tax compliance
  • Provides a quality check for consumers by ensuring businesses meet the required health, safety and environmental standards (where applicable e.g. pharmaceuticals and food preparation)

An investigative report published last year on the relationship between entrepreneurship and economic growth revealed the ease or difficulty of this process is a critical component of a country’s economic prosperity. This can also impact on the number of new businesses being formed, overall business productivity and the levels of employment within a local community.

For many it’s sometimes baffling why some countries embroil the process in reams of laborious red tape that ensures innovation is stifled and muted.

The World Bank report highlights that countries who adopt a business ethos that promotes entrepreneurship, creative flair and nurture’s the formation of start-ups frequently has a more positive influence on a countries standard of living, economic growth and encourages shared prosperity among its residents.

Conversely countries with a restrictive and lengthy bureaucratic process can inhibit the number of new businesses, hinder economic growth and at times even lead to higher levels of corruption.

Overall highlights

  • Singapore, as it has for years, retains the overall number 1 position.
  • New Zealand is considered the easiest place to start a business taking ½ a day to register a business.
  • Qatar is ranked number 1 for tax purposes.
  • Estonia, Germany and Switzerland entered the overall top 20.
  • Eritrea ranked 189th and last on the list.

While understanding the complex relationships across 189 different economic climates is an extremely complicated task, the data can provide some useful insights not only for governments and administrations, but also for anyone thinking about starting up or expanding their businesses overseas.

At the very least you’ll be able to understand what’s required to register your organisation in the country of your choosing. Or if the going gets too tough you can always call in a company formation specialist to tackle any Austrian body builders who stand in your way.

This post was written by European company formation agent, EuroStart Entreprises- helping foreign businesses and entrepreneurs open their companies and expand their operations throughout the UK, Europe, US and the Emirates.

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