Countries in central and northern Europe dominate a global ranking of the best places to start a business — although a central American state tops the list.
The index, compiled by Wharton University and market research firm Y&R, evaluates a total of 80 countries which collectively account for 95% of global gross domestic product. The overall ranking considers a wide range of factors to create an overall “best countries” index, including entrepreneurship, heritage, quality of life, and openness for business.
We took a look at the “openness for business” subindex, which considers a range of factors including the price of manufacturing costs, levels of bureaucracy, tax environment, transparency of government practices, and the extent of corruption. Take a look at the nine countries which made the top of the list.
9. Norway — like many of its Scandinavian counterparts, Norway has one of the highest tax rates in the world, with a total tax burden of around 40 to 45% of GDP, which funds its extensive welfare state. While a big tax burden is not associated with attracting business, the country’s transparency and lack of corruption places it at ninth on the index.
8. New Zealand — New Zealand has a very strong tourist industry and a very strong export market, particularly in agriculture. Like Norway, it scores highly on the “Openness for Business” index because of its transparent government practices and lack of corruption.
7. Canada is the only north American entry to the list. With a GDP per capita of £36,300, the high-tech industrial society has the benefits of a high standard of living and a skilled workforce. The service sector is Canada’s biggest economic driver.
6. Sweden — like Norway, Sweden operates a system of free-market capitalism combined with a comprehensive welfare state. While its tax environment is therefore not as favourable as other nations, it scores highly for government transparency and is largely free of corruption.
5. Finland — following the same “Nordic model” as Norway and Sweden, the country comes highest on the index for government transparency and demonstrates a very low level of corruption. As well as scoring fifth on the “Open for Business” subindex, Finland is ranked seventh in the world for “Quality of Life.”
4. Denmark — northern Europe’s Nordic countries continue to dominate the list. Denmark has low levels of corruption, high levels of transparency, a highly-skilled workforce, an average GDP per capita of £36,400 ($45,700), and a capital — Copenhagen — which serves as an industrial and financial hub.
3. Switzerland — the federal European republic has long been regarded as a highly attractive place to live and work. It has a highly competitive tax environment, a transparent government, and low levels of corruption. It is ranked in the overall index as the best country in the world.
2. Luxembourg — the tiny landlocked country in western Europe is often described as a “tax haven,” due to the huge tax incentives it offers for countries to move there. That means it has one of the most competitive tax regimes in the world, as well as the typical benefits of a highly-developed European economy.
1. Panama — the state which connects Costa Rica and south America is the only central American nation in the list. Also known as a “tax haven,” Panama scores a full 10 out of 10 for the favourability of its tax environment, although it is significantly more corrupt than any other countries which make this list.
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