Special Report

Best (and Worst) Countries for Business

The Best Countries for Doing Business

10. Macedonia
>Distance-to-frontier score:
> Cost of starting a business (as pct. of income): 0.1%
> Total tax rate: 12.9%
> Income per capita: $5,070

Based on 10 measures of a country’s regulatory climate, Macedonia is the 10th best country for doing business. In particular, it is easier to start a business in Macedonia than it is in all countries reviewed other than New Zealand. Starting a business in Macedonia is a one-step, one-day process, whereby entrepreneurs can register all necessary documents in an online filing system accessible 24/7. This recently established process eliminates the need for notary services and reduces the time, cost, and procedures for starting a business. A similar system is in place for Macedonia’s construction permitting process, whereby all necessary documents are available online, accompanied by a comprehensive list of steps and requirements, and reviewed by a certified architect. Perhaps as a result, Macedonia received nearly the best possible rating for building quality control.

A healthy business climate often leads to greater wealth, but the best countries for business are not necessarily wealthy nations. The former Yugoslav country has a GNI per capita of just $5,070, by far the lowest of any country with a healthy business climate.

ALSO READ: The States With the Most Serial Murder 

9. Finland
>Distance-to-frontier score:
> Cost of starting a business: 1.0%
> Total tax rate: 37.9%
> Income per capita: $47,380

No country has a better legal framework to assist failing companies than Finland. It takes 11 months on average for a company gone bankrupt to regain solvency, and investors typically recover about 90% of assets. By contrast, bankruptcy proceedings in the United States take 18 months, and investors recover 80.4% of assets, on average. Finnish law allows some bankrupt companies to take on new loans while insolvent, and all parties involved are permitted to participate in corporate reorganization. Unlike the United States, the Scandinavian country also has far more early screenings for insolvency cases, allowing for speedier proceedings.

Over the past year, Finland reduced its corporate income tax rate and increased the social security contributions employers are required to pay, making taxes for businesses less costly overall. Each year, companies pay around 38% of profit in taxes on average.

8. Norway
>Distance-to-frontier score:
> Cost of starting a business: 0.9%
> Total tax rate: 39.5%
> Income per capita: $103,050

With a GNI per capita of $103,050, Norway is one of the richest countries in the world. Wealth often coincides with a healthy business environment, and the Scandinavian country is no exception. While companies in many countries register their businesses by mail, Norway established in the past year an online system for entrepreneurs to register their businesses and bank accounts. The new system likely helped reduce the time required to start a business. Now, it takes just four steps and four days on average to start a company compared to the five steps and seven days it took two years ago. While property registration is still done by mail in Norway, it is a one-step process that typically takes just three days. The country is currently developing an online property registry.

7. Sweden
>Distance-to-frontier score:
> Cost of starting a business: 0.5%
> Total tax rate: 49.1%
> Income per capita: $46,219

Like other Scandinavian countries, Sweden is one of the best nations for business. Sweden performs well in every measure of business ease and particularly well in infrastructure measures. Establishing a new electricity connection in Sweden is a three-step process and takes just 52 days on average compared to the five steps and 90 days it takes in the United States. Since last year, the Swedish government also made starting a business much easier by requiring its business registration office to process registrations within five days. Now, starting a business is a three-step process and takes an average of seven days to complete. These steps are also relatively cheap to do, costing around $230 or just 0.5% of Sweden’s income per capita.

ALSO READ: 10 Brands That Will Disappear in 2016

6. United States
>Distance-to-frontier score:
> Cost of starting a business: 1.1%
> Total tax rate: 43.9%
> Income per capita: $55,200

The United States is the largest economy in the world and the sixth best for doing business. Other than New Zealand, no country has a better credit framework. All American adults are covered by a credit bureau and have some of the most extensive legal rights in the world. The U.S. legal framework also supports recoveries from total financial ruin. The country boasts multiple success stories whereby soon after declaring bankruptcy, a previously insolvent company reemerged with a new corporate structure and focus. Kodak, Marvel, and Fruit of the Loom — today major multinational corporations — all returned to profitability partly due to the U.S.’s favorable reorganization and refinancing laws. Starting a business in America, however, is not as easy as it is in other business-friendly countries. Starting a company is a six-step process, and the procedure takes about six days on average.

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.