Starting a startup or business venture requires long term technical, financial, functional and emotional commitment. Apart from entrusting your complete time and energy, your business will take up resources and test your commitment for a very long time. But before you start dreaming of instant success, every entrepreneur has to contemplate about the location from where they want to start up their venture. It is highly imperative for a startup to be positioned very conveniently for their clients as well as their end users. Most importantly, the geographical location of the startup will depend on the economic conditions and the ease of doing business in the region. Other important factors that will govern the successful building of your business are ready availability of workforce, a congenial environment that best suits the development of your business and an effective connecting infrastructure in place to instigate innovation throughout your business.
When you have stitched up an elaborate idea for your startup which is (at least in your mind) bound to become successful, the next step that should be taken is to find the most appropriate location to launch them. First time Entrepreneurs, who lack the experience and knowledge in this regard, will have to tick out few factors like easy access to resources, demand of the product or services exclusively in the location and the economic conditions of the list of locations they have selected.
In recent times there have been many selective regions that have come up, which have become favorites among entrepreneurs to start up their businesses. Among them, listed here are a few of those very prospective locations all over the globe.
ASIA
One of the most appealing aspects of Asia is the sheer size of the market opportunity due to the exponential growth in smartphone ownership and consumer buying power, led by the predominantly youth population in countries like Indonesia, Thailand, and Vietnam. A rapidly growing middle class with disposable income and an increasingly business-friendly attitude among Asian governments anticipating huge foreign investments in their economy is a lucrative opportunity for any entrepreneur to pass away.
India, the 4th largest startup ecosystem in terms of IT and digital, is as dynamic as the economic reforms planned by Prime Minister Modi. Opportunities stands out as the strongest pillar with market size and access to funding as the single best indicators for India, as it is best shown through Bangalore city, which achieved the highest cultural score of all Asian countries.
On the other hand, China represents the biggest consumer market in the world and it has the largest number of mobile users. The government is focused on boosting the economy and they fixed a USD $6.5 billion venture capital funds for startups in the beginning of 2015. However, the process of setting up a business is still very complex and the government’s ban over some of the main websites used in the west is a major downside. The cheap market for knockout goods and an ease of locating workforce is a compelling factor that will lure many entrepreneurs to put up shop here.
Malaysia is another developing market with good market efficiency, quality of institutions and financial market development that can entice entrepreneurs. Malaysia has launched a special economic zone called Multimedia Super Corridor (MSC) to create a multimedia hub for innovative producers and users of multimedia technology.
In Indonesia, following up on the exciting boom of the startup scene in the recent years, the Government has become more and more involved in supporting the local entrepreneurs, with the newly launched 1,000 Startups initiative. Though, it’s difficult for foreign companies to integrate into the system as the process can take up to 6 months.
With a superior geographic location and investment in venture capital second only to China, Singapore is a prospective location for startups to grow. Singapore boasts of an impressive network of VCs and founders to mentor alongside startups. But a key pushback is the high cost and shortage of skilled talent.
Pacific Region
Most countries belonging to the pacific region have a well-established economy and are major propellers on the international market. The importance of promoting local business community is now recognized among the island nations. Among them, Australia seems to support and encourage positive attitude towards entrepreneurship. The federal government offers a wide range of programs for business startups and early stage business and growth oriented businesses under the Entrepreneurs’ Infrastructure Program. In addition, each state government has its own programs. Though, despite an optimistic structure in place for entrepreneurship related growth, Australia is yet to produce a Microsoft or Google.
Furthermore, Russia also appears to be making giant efforts to boost entrepreneurial activity. The government provides grants to startups, amounting to $127 million in 2014, with 25% of it going to the IT sector. Between 2010-12 Russia’s venture capital boomed, there was a surplus of funding, but by 2013 the bubble collapsed as it became apparent that some startups had overestimated the size of the domestic market. The country’s economic performance deteriorated as funds were started to be focused on foreign markets and internationally scalable projects. One major hurdle to do business in Russia is the access to capital. Starting and running a small business in Russia requires riding through domestic turbulence and the cross winds of global markets and international diplomacy.
If there is one place with which innovation can be associated, it is with Japan. Japan has led the modern technology by pioneering in inventions across every industry. Japan’s post war recovery was driven by ambitious entrepreneurs who grew small businesses into household names. The trend hasn’t slowed down yet. And to further boost its accommodation for startups, Japan has placed policies, including removal of the minimum capital requirement for the establishment of limited liability companies, provision of education and information for entrepreneurs through the National Startup and Venture Forum, and a new startup loan program, which requires no collateral, guarantors, or personal guarantees, and the expansion of the upper limit of “free property” based on the New Bankruptcy Law.
North and South American Region
It’s every entrepreneur’s dream to place their mark in the Silicon Valley. USA provides the most productive and profitable environment to showcase your entrepreneurship skills. More than 70 percent of Americans would prefer being an entrepreneur to working for someone else. Various tax policies, both active and passive, are in place across U.S. states to foster entrepreneurship such as targeted tax credits for business location, research and development, and capital requirements. Several states have also reduced or eliminated their capital gains tax and inheritance tax. There are various programs launched by U.S. government under the Sparks Programs. Other favourable policies like legal protection, property rights and moderate startup costs are in place to promote entrepreneurship.
Canada, though dwarfed by their neighbour’s success in the global market, offers distinctive advantages for entrepreneurs to raise their startups. Canada’s new Start-Up Visa is the first of its kind in the world, linking immigrant entrepreneurs with experienced private sector organizations that have expertise in working with startups. Canada has a strong fiscal position and rated as one of the best places to do business. It offers a low-cost and low-tax environment for your business to thrive. Though, financial institutions usually provide businesses, loans that totals 75% of receivables and 25% of inventory, which is a major disappointment for small businesses. There is also a lot of paperwork required to access R&D tax credits which is an inconvenience for time-challenged small-business owners.
Entrepreneurial capital in the form of micro-enterprises and self-run businesses has long been part of the economic fabric of Brazil. INOVAR, a project started by the government and partnered with MIF, is addressing concerns of capital constraints and an underdeveloped venture capital industry, though with little success. In the midst of this the local entrepreneurship is at a boom, especially into the deep favelas of Brazil. The Country has enjoyed robust growth and rose in living standards, although income inequality is still high. As such Brazilians are consuming more at all socio-economic levels. One discouragement for new entrepreneurs is the time to process tax credits. For instance, it takes 13 procedures and 119 days versus 6 procedures and 6 days in the US. Moreover, tax and labor laws are Byzantine and punitive. Though, with economical property prices and easy available labor, it’s a slow growth location for Entrepreneurs.
Middle East & Africa
The UAE is a veritable shrine to business and commerce, renowned for its efficient admin, infrastructure and sleek licensing. The UAE is favored for its permissive approach to business and commerce, exemplified by its liberal standards and regulations. Dubai’s economy has remained open; and control and regulation by the government of private sector activities is minimal. Customs duties are low at 4% (with many exemptions); 100% repatriation of capital and profits is permitted; there are no foreign exchange controls, trade quotas or barriers; and a stable exchange rate remains between the British Pound and the UAE Dirham. Foreign business is allowed ownership rights of up to 49% for limited liability companies established in Dubai, and up to 100% for professional companies. Dubai is home to over 20 Free Zones catering to various industrial and business clusters. And, with liberal labor policies, it’s at the epitome of any entrepreneur’s dream location.
Entrepreneurship in South Africa is sometimes defined as unique ideas, inventions and technologies. The DTI has various programmes and grants in place to encourage new SMEs and to create employment in the country. Under co-operative schemes with five or more black members, grant assistance of R350, 000 is provided. Under ISP, funds are capped at R8 million on a 50:50 cost-sharing basis between the government and the private sector. FIG grant covers 15% of the value of the imported machinery and equipment to a maximum of R10 million. Even though there is a lack of proper infrastructure in most places, it is a place where large population demands more basic commodities and there is a prospective of building a business here.
Europe
London is a beacon to Europe’s entrepreneurs because of its position as both a financial and business hub for the EU. United Kingdom is the number one destination for foreign direct investment in the EU with the USA, India and France being the largest contributors. The British government provides several financial schemes that offer significant tax benefits not just to smart investors who can afford expensive tax advice, but also for the founders and even employees of companies. If you sell your company, you can claim up to £10 million of Entrepreneurs Relief and investors can claim up to £150,000 in tax credits on their investments each year. A new category of visa was created to allow anyone from anywhere in the world to enter the UK and establish a company, so long as they have £50,000 of UK-based investment. With the rise of Seedcamps and government’s support, UK is a huge trading market and best suited to entrepreneurs.
Germany is the epitome of a heterogeneous nation: linguistically, racially and economically. It is easier to find qualified and talented staff across the country. With its mainline manufacturing background and position in the global automotive market, Germany provides an unprecedented advantage of launching new innovative products. Though, the downsides include lengthy procedures for building permits and liaising with local chamber of industry and commerce, the local commercial register, the local office of business and standards and the professional association of the relevant trade. Businesses have to contend with nine tax payments a year. It takes a week on average to both import and export goods.
A rising food industry is a trademark of France’s attraction for entrepreneurs. Fashion Industry is another reason for startups to venture into France’s potential to provide entrepreneurs with a suitable location to succeed. Under a program launched “French Tech Ticket” to attract non-french entrepreneurs, each member of founder team receives €12,500, which is doubled when the team opts to continue the program for another 6 month. Founders enjoy special privilege when applying for a French residence permit and office space in Paris. Though, gender inequality is high at workplace and language barrier is a major disadvantage. Also, cost of starting up is high if entrepreneurs can’t secure funding.
Even though these are the most popular locations, there are always constraints placed over which you can choose to launch your business. Therefore, it is understandable for entrepreneurs to research and select a place which is best suited to their business strategy and market orientation.
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