Across the world, people choose to live in new locations for a variety of reasons – some move for the sake of their careers, some to be with a spouse, others move for cultural reasons, and yet others move for the climate. Often, there are multiple, overlapping reasons for choosing to live in a new country.In every case, no matter what the reason, one of the things that’s common is that there’s a considerable risk involved in choosing to relocate, in terms of your career, your personal life, and many other factors. However, in all probability, the one group that has to deal with the greatest risk is those who relocate in order to start their own businesses.
Being an entrepreneur is difficult and risky enough even on home ground; trying to run a business adds a lot more uncertainty and work too, with visa requirements, currency concerns, different taxation laws and other legal requirements to worry about, as well as cultural differences and other factors that must be taken into account. In some respects, there are certainly benefits to being an expat entrepreneur – some countries strongly encourage entrepreneurship, and others may offer the benefit of extremely low running costs due to cheap labor. However, the flip side may be dealing with things like poor infrastructure, a lack of skilled employees, and excessive or even corrupt bureaucracy.
It’s important to consider all these aspects before making the leap. Choosing your location well is one of the most important aspects of starting an expat business. Factors like prior entrepreneurial and industry experience, and familiarity with local culture are of course important, but even with these on your side, choosing the wrong location can make things excessively difficult. Some countries are notoriously tough places for expats to run businesses in, while others provide a poor environment for business in general. Here are five of the best cities in the world in which you could start a business as an expat.
According to HSBC’s Expat Explorer survey, Dubai is one of the four best places in the world in which to start a business. The percentage of expats who are entrepreneurs here is double the global average (nine per cent against the global average of four per cent), which seems to be a fairly concrete indicator of the city’s popularity among entrepreneurs.
The local economy in the United Arab Emirates is thriving, which makes it a great place for all kinds of professionals, and is of course one of the most important factors when choosing a location in which to start a business. The political stability of the UAE seems to be another encouraging factor for entrepreneurs here, with two-thirds of the respondents in the HSBC survey mentioning this point. In addition, the local culture and business environment are highly conducive to entrepreneurial ventures. The United Arab Emirates doesn’t place particularly highly on the World Bank’s Ease of Doing Business index, but it doesn’t do poorly either. In addition, the assessment of this report and index reflects the status of the UAE as a whole, and not just Dubai – the other emirates are certainly not as welcoming and supportive of entrepreneurs as Dubai is.
Nonetheless, the Doing Business 2016 report includes the UAE in many of its highlights, and notes a number of improvements. For example, in the last year, the UAE has streamlined the procedures involved with obtaining construction permits and has also made it easier to get an electricity connection. Enforcing contracts is also now easier, with court automation being expanded in many ways. One particularly remarkable development is the new ability to complete property transfers with the help of a mobile phone application. The local authorities also seem to be embracing social media in an effort to communicate clearly with the public – for example, the land registry posts updates on its operations to social media.
Hong Kong is another city that is described in the HSBC report as one of the best places in which to be an entrepreneur. 87% of the respondents said that Hong Kong was a good place to start a business in. Once again, the thriving local economy is an important factor, and is at least partly responsible for the confidence that entrepreneurs feel with regard to their prospects in this city.
On the Ease of Doing Business index, Hong Kong ranks fifth in the world, and has been in the top five for the past decade. Government interference and oversight are relatively restrained, even minimal in Hong Kong. Transparency and openness are highly valued here, and corruption levels are among the lowest in the world. In terms of registering a new business, Hong Kong is one of the easiest places to do this, allowing the procedure to be done online in an incredibly small amount of time. In the last year, with the requirement for a company seal having been eliminated, the procedure has become still easier. Paying taxes is also quick and easy in Hong Kong, with simplified procedures and a limited number of payments required.
In terms of infrastructure, Hong Kong scores extremely well in practically every area, with excellent transport, electricity, water and sanitation, and telecommunications facilities. In fact, Hong Kong has the second best broadband speeds in the world, which is particularly important for many new international businesses.
Outside of the factors that could directly impact a new business, Hong Kong is one of the best places in the world for expats, and has an overall ranking of 11 in the HSBC Expat Explorer survey. Although it’s an expensive city to live in, it scores highly in terms of cultural and other experiences and the overall quality of life. Hong Kong also offers great healthcare and education, which are both important considerations for expats with families.
The Expat Explorer report from HSBC describes London as “the perfect place for entrepreneurs looking to broaden their skills”. It’s in the report’s top four along with Dubai and Hong Kong, and the United Kingdom as a whole places sixth on the Ease of Doing Business index.
Once again, the strong and stable local economy is an important factor for entrepreneurial expats in London, but in addition, the local business culture plays an important role, with its mix of tradition and politeness as well as a welcoming attitude to innovation and multiculturalism. The country’s location and relationship with the European Union may also be important for some businesses, although this aspect is currently somewhat in flux, with the prospect of Britain leaving the EU being very real. Regardless of the outcome however, London is likely to remain one of the biggest airport hubs in the world.
The Doing Business report for 2016 mentions the United Kingdom as one of the countries that has made it easier for businesses to pay their taxes. The government recently announced a reduced tax rate on profits for many businesses, and also reduced labor taxes and mandatory contributions. In general, the country seems eager to make itself attractive to entrepreneurs, with this even being mentioned in the Queen’s speech at the opening of Parliament in 2014. The UK also offers a range of digital services, with a great deal of business-related information being easily accessible online through government portals. The country also scored very highly when it came to the parameters of getting credit and the cost of importing goods.
In general too, most expats say that the UK is a great place to live, and according the Expat Explorer survey, most find it very easy to settle in, with two-thirds of the respondents having lived in the country for more than five years. London is certainly an expensive city to live in, but most expats are very happy with the quality of life that it offers, including factors like cultural diversity, infrastructure, and safety.
Wellington isn’t specifically mentioned by expats in HSBC’s Expat Explorer report, but New Zealand as a whole does exceptionally well, placing second in the overall rankings. In addition, on the World Bank’s Ease of Doing Business index, the country once again comes in at second place. New Zealand’s warm welcome to skilled professionals is now fairly well known around the world, but not as many people realize that this includes entrepreneurs. The country welcomes foreign investment and offers a lot of incentives to businessmen looking to invest in it. Along with the minimal, efficient bureaucracy, the transparency in regulations and government functioning, and the near absence of corruption, this makes New Zealand as a whole a great place for an expat to start a business, and the ideal location in New Zealand is of course its capital city.
Wellington is New Zealand’s most populous urban area, and is a thriving business hub, with a particular focus on tourism, culture, and information & communications technology (ICT). Lonely Planet listed Wellington among the top 10 cities to visit in 2011, and a global survey by Mercer reported that the quality of living in the city was 12th best in the world. The Expat Explorer report describes Wellington as the best location in terms of its overall expat experience.
Among the highlights noted by the Doing Business 2016 report were the ease of setting up a business in New Zealand (the country was ranked first in the world in this area), the ease of getting credit, the protections for investors, and the time required to enforce a contract through the legal system. Among the improvements in the country over the last year were a reduction in the time required to get an electricity connection – the main provider reduced the wait time by six days. A lot of the procedures required to set up and run a business can be done online in New Zealand, including land registration and the entire process of forming a company, which can be done by the entrepreneur themselves in only a couple of hours.
In both the Expat Explorer report and the Ease of Doing Business report, Singapore is the one country that beats New Zealand,coming in at first place, and making it the best place in the world for expats and for entrepreneurs.
Singapore is an expensive city to live in, but most expats rate it extremely highly on practically every other parameter, including the economy, infrastructure, culture, safety, diversity, and quality of life. Most expats say that they find it extremely easy to settle in here, and also to do business here. Singapore is the fourth place mentioned by respondents to the HSBC survey as a great location to start a business in. The city-state has a strong, stable, and advanced economy, and is a major global hub for the banking, insurance, and financial services industries, giving expat entrepreneurs great confidence and optimism.
According to the Doing Business 2016 report, Singapore is the best place in the world when it comes to protecting investors and enforcing contracts. According to the report, the time required to resolve a commercial dispute in court in Singapore is the shortest in the world – only 150 days. Overall, the legal system seems to be extremely transparent, efficient, consistent, and easy to deal with. It also has a considerable amount of automation and digitization, allowing litigants to do things like file cases online, get text alerts for their cases, look up prior judgments in an online database, and even use videoconferencing for certain types of hearings. Other notable areas where Singapore scores well are the time required for obtaining construction permits, the tax rate payable as a percentage of profits, and the documentation required for importing goods.