If you are a digital nomad, considering expanding your freelance services or even sub-contracting abroad, you have some cost analysis to do. Learn which countries are the most cost-effective for startups and freelancers. You may be surprised by the findings.
A new or expanding business usually requires paying different registration fees for the licensing, permits, and approvals, and many governments also have minimum on-hand capital requirements.
Though it might be more costly to start a business in some countries on paper, affordability also takes into account relative income.
Bad news first. If you are looking to start or expand a business you may want to reconsider if it’s located in an “expensive country” when it comes to startup costs.
There are some in Europe according to Visual Capitalist, including Italy at $4,876 and Austria at $2,475, as well as the Americas, including Suriname at $3,030 and Ecuador at $1,630.
The most expensive countries, however, are largely in the Middle East. They include:
#1 UAE at $7,444
#4 Qatar at $3,952
#6 Lebanon at $2,855
Which Country is the Most Affordable for Starting a Business?
Though some countries are cheaper than others for starting a business, the picture changes when accounting for monthly income, according to research presented by Visual Capitalist.
According to the report, when it comes to the cost of starting a business relative to monthly income, many developed countries “take the cake”.
Not including countries with missing data, the most affordable countries for starting a business include the UK, Denmark, and Ireland in Europe, South Korea in East Asia, and New Zealand in Oceania. Startup costs in each range from just 1%-2% of monthly income.
The picture is similar in the Americas, where Chile and Canada have the lowest relative fees at 2% and 5% of monthly income respectively. Even the U.S.—which has a decently high cost of $725 for starting a business—is relatively affordable at 16% of monthly income.
The US (16%) is actually a more expensive market to start a business than say, Canada (5%), Croatia (3%), Russia (11%), Australia (10%) or Singapore (6%).
Some of the least affordable countries are in the Middle East and Central America. Haiti and Suriname have startup costs that are 1,403% and 1,114% of monthly income, while Yemen has affordability rates of 1,070%.
But the least affordable countries are in Africa, said the report. Many countries on the continent have startup costs that are more than 100% of monthly income. The Republic of the Congo and the Central African Republic have affordability rates of 2,546% and 1,455% of monthly income, respectively.
If you have found that your home market is among the best countries to set up a business, yet you need more manpower and can’t afford the permanent staff costs, remember to look to fellow freelancers at home and in overseas markets.