Revealed: The cheapest countries in the world to start your business

If you’ve seriously toyed with the idea of starting your own business in the last 12 months, you’re not alone.

Whether you worked from your regular office, home office or even a virtual office, the circumstances we found ourselves working in during the last year drove many to daydream of doing something different. And for some, the dream went even further than that.

From 2019-2020, there were as many as 665,495 company incorporations in the UK. And while this is a decrease of 1.1% compared to 2018-2019, it’s the second-highest number of incorporations since UK figures were first reported in 2009-2010. 

In fact, between 2019 and 2020 - a year that proved to be one of the most demoralising in recent economic history - that’s as many as 1,832 companies set up per day.

So, to what do we owe this unflappable entrepreneurial spirit in Britain? It certainly seems miraculous that, even during a pandemic, the amount of new businesses being registered is so high. What’s more, despite the global impact of the pandemic, other countries have seen a similar increase in business formations.

Could it be that the fragility of businesses and lack of job security during this terrible year have moved people to generate economic opportunities for themselves? Well, according to the numbers, the answer is a resounding “yes”. The people of Britain have proven they will bite back at adversity, roll up their sleeves and eke out new ways to generate cash.

So how easy is it to set up a business in the UK?

There’s no getting away from it: hard work, determination and some start-up savings to weather at least the first few months (depending on your type of business) are essential.

But setting up a business in the UK is surprisingly easy.

For starters, it’s a straightforward registration process - you can set up within an hour using the government portal. It’s cost-efficient too (when so much about starting a business isn’t), with just a £12 fee to register your business with Companies House. 

Compare this to Austria, for example, where the charge is £1,700, or Germany, where it costs as much as £2,270 to set up your business, and things seem pretty appealing for Britain’s would-be founders.

In fact, Britain actually ranks fourth in the world for company formation cost. 

How do we know this? Well, to celebrate what has been a pretty impressive show of entrepreneurial bravery from Brits in the last year, we collated a list of the fees it takes to form and register a company in every country. Take a look at the results to find out where in the world today it’s most cost-effective to create a new business. 

Source: Doing Business

The results

In joint first place at the top end of the table, Rwanda and Slovenia have a zero cost associated with registering a business, shortly followed by South Africa, which has a £9 fee for starting out. Ukraine takes third place with a cost of just £10, while the UK is close behind in fourth place with just a £12 charge to register a new business. 

It should be said that while Rwanda has made it cheap for businesses to start up, its economy, which is largely based around agriculture, and the country’s history of political instability is likely to play a significant role in any business’s decision to locate here.

However, Slovenia’s rock bottom start-out cost might be a particularly attractive prospect to some businesses since, being part of the EU, businesses have access to this market and the movement it allows. 

South Africa and Ukraine also have low registration costs, but we do have to compare this attractive starting fee to the potential blockers and bureaucracy a business could face in these countries when starting out. For example, Ukraine and South Africa rank 61 and 139 respectively (out of 190) in the category of “starting a business” according to the World Bank’s 2020 data on the ease of doing business.

And that’s where the UK comes in. In fourth place for registration cost, the UK also ranks 8th for ease of doing business, and 8th again for ease of starting a business in World Bank league tables. Not bad, if you ask us!

Would you consider setting up a business overseas?

While the cost of forming a business is one consideration, there are still lots of other things to think about when choosing where to locate your business. These include residency requirements, your customer base, the needs of your workforce and operations, funding opportunities, and tax liability and incentives.

If you’re interested in starting your own business, Rovva makes it easy for entrepreneurs to get off the ground, providing a range of services, from workspace access to professional support with things like commercial law, HR, IT and accounting. 

Methodology

Business costs (in US dollars) were sourced from Doing Business, an online publication from The World Bank which factors in the various different costs of starting a business in different countries (including licenses, application fees, and all other expenses incurred). Conversion to British pounds was based on data from Google Finance.

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Your complete business toolkit

Rovva puts everything you need for your business in one place. From an accountancy helpline to a drop-in business lounge - we've got everything covered.