When your business is doing well, expanding to another country can seem appealing – a whole new market to explore.
But how easy will that be? Will you be swamped by red tape, stymied by an inadequate workforce or overwhelmed by the taxes you’ll need to pay?
Every year, Forbes publishes a list of the best countries for business, based on factors like these. And in its latest report, it picks the UK for top spot for the second year in a row – despite all the uncertainty of Brexit. Check out the five best countries for business – and the worst.
The five best countries for business…
1 – United Kingdom
The UK is one of the easiest places in Europe to incorporate a company, and the government offers certain tax benefits for investors, founders and employees. It also has the second-largest workforce in the EU. However, it’s not all good: in terms of payroll simplicity, the country’s facing all the problems of GDPR, as well as complicated rules around the gender pay gap, pension enrollment and the National Minimum Wage. However, overall, the UK wins on the strength of its workforce, innovation and general lack of red tape.
2 – Sweden
Stockholm is one of Europe’s leading tech startup hubs, and receives high marks from Forbes for innovation, property rights, risk and low levels of corruption. However, it has some unique – and rather complicated – payroll processes to follow, with new and increased reporting requirements coming into force this year.
3 – Hong Kong
Third overall in the Forbes rankings, Hong Kong leads the Forbes list on taxes. Although its payroll processes have become more complex in recent years, it has a simple tax system, with the Inland Revenue Department moving to electronic filing and digital signatures. It also has a varied labour supply.
4 – The Netherlands
Fourth in the Forbes list, the Netherlands is economically open, and has a flourishing startup sector: It’s one of the best countries in the world for technology and innovation. Payroll isn’t always straightforward, though, with complex employee data collection processes.
5 – New Zealand
New Zealand is ranked by Forbes as the best country in the world when it comes to red tape. However, the payroll process has become slightly more arduous this year, with new reporting requirements having become compulsory. Employers must now file information about employees, leave entitlements, tax withholdings and more, all within two days of each payday.
…And the worst
161 – Central African Republic
This conflict-ridden nation has a GDP per capita of only $400 and fares poorly on innovation, trade freedom and investor protection, says Forbes. Meanwhile, the workforce is largely unskilled. Corporate tax stands at 30 per cent, and employers are required to submit 19 per cent of employees’ gross pay as a social security contribution.
For more information on the good and bad for payroll read our in-depth payroll guides.
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