Donald Trump managed to win the White House on a wave of popular support for his business reform plans. He wanted to take America back for the people and make it easier to do business. Since taking office, he’s promised to get income and corporate taxes down to their lowest levels in a generation, and he’s planning a massive repeal of regulations of some 75 percent, perhaps more.
There’s a reason he’s doing this of course: America is no longer the number one destination for business investment. In fact, since 2006 – the last time it was the best place in the world to start up – it’s slid to number 23, behind sclerotic economies like Italy. No wonder the US was doing so bad.
The question for small businesses is, as always, where should they set up and which countries offer the highest return? Here are some of the top countries in the world, as measured by the favorability of their business environments.
New Zealand wasn’t always the place you went if you wanted to be an entrepreneur. Back in the 1970s, the socialists were well and truly in charge, and they sucked the life out of the economy. The entire country ended up as one giant, ossified mess, and nobody it seemed, could make any money. After a while, the New Zealanders saw the error of their ways and freed up their economy from the burden of red tape and petty local government action. In response, the country grew rapidly, quickly eclipsing its larger neighbor, Australia, in terms of GDP per capita. In 2016, the economy was growing at 3.6 percent per year, well above the target for the US, even with Trump’s new policies taken into account.
Another country that investment firms, like Colbeck, will have their eyes on in the future is Sweden. According to Forbes, Sweden is also realising the error of its ways and looking at measures which will increase participation in the labor force. Until recently, Sweden had one of the most generous welfare systems in the world, and this welfare system meant that the cost of not having a job was pretty low. As a result, low-level jobs often remained vacant because it simply wasn’t worth taking them for the wages on offer, and prices in places like hotels and restaurants went through the roof, because of labour costs.
That’s all now changing. The country has slashed the amount it pays in welfare and disability benefits, and as a result, it’s been able to lower taxes, encouraging more employment, more innovation, and more companies to start up. The economy grew to an impressive $423 billion in 2016, up by more than 4.2 percent in one year, making the country one of the hottest places to invest in the whole of Europe.
Forbes identified other countries: Ireland, Britain and Hong Kong as rounding out the top five best places in the world to do business thanks to their strong property rights, high rates of capital investment, low taxes, and developed tech infrastructure.