7 Best Countries to Start a Business As a Foreigner [2024]

Starting a business in another country can be an exciting opportunity to enter new markets, attract more customers, and create opportunities for relocation.

Whether you're looking to move abroad or expand your business horizons, choosing the right country is key. But which country is best for starting a business as a foreigner? 

In this article, we'll explore the 7 best countries for starting a business as a foreigner in 2024, taking into account the local business environment, ease of setting up a company, foreign ownership regulations, and other important factors.

If you’re ready, let’s take a look! 

Before getting into the details, let’s explore what you should consider when selecting a country to start a business. These include essential considerations and aspects you can prioritize based on your goals and preferences.

Legal and Regulatory Requirements 

• Restrictions on foreign ownership: Some countries impose limits on how much of a business a foreign investor can own. These rules are designed to ensure that some control remains with domestic entities. In some countries, like Singapore, you can use a nominee director to meet local ownership requirements. A nominee director holds shares on behalf of the actual investor but does not have real control of the business. On the other hand, jurisdictions like Hong Kong impose no restrictions on foreign ownership, allowing businesses to be 100% foreign-owned.
• Tax regulation: Look into countries with low corporate tax rates, capital gains tax, dividends tax, VAT/GST, and other relevant taxes. Additionally, explore if the country has Double Taxation Agreements (DTAs). The DTAs ensure you are not taxed twice on the same income in both countries. If you plan to relocate, also evaluate personal tax obligations.
• Visa requirements: Managing business activities in a country often requires specific visas, such as investor, business, or entrepreneur visas. Countries that encourage foreign investment may offer streamlined processes and special visa types to facilitate entry.
• Labour Law: If you plan to hire staff, familiarize yourself with local labor laws. This includes minimum wages, working hours, and employee rights. It’s crucial for not only budgeting but also ensuring compliance.

Business Environment

The business environment includes all the external factors that impact how a company runs and grows. To get a clear picture, look at economic conditions such as GDP, inflation rates, growth prospects, and overall stability. You can also look into the World Bank’s Ease of Doing Business rankings for insights on how easy is it to start a business in a particular country, along with the Global Entrepreneurship Index (GEI) to assess the health of entrepreneurship ecosystems.

Beyond these economic numbers and indicators, consider the availability of skilled labor, the quality of infrastructure such as transportation and internet, the types of government support for new businesses, the local business culture, and political stability.

Additionally, evaluate market competitiveness by analyzing the number and strength of competitors, market saturation, and innovation pace. A highly competitive market can drive innovation and improvement but also increase pressure on pricing and margins. Understanding this landscape aids in positioning, identifying opportunities, and differentiating offerings.

Start-Up and Maintenance Costs

Factor in registration fees, initial setup costs, and ongoing maintenance expenses. Some places may be affordable to start but costly to maintain. Understanding both initial costs and long-term financial planning is key to ensuring your business stays viable.

Lifestyle 

If relocating is part of your plan, consider the quality of life in the country. Look at the cost of living, transportation, climate, healthcare, education, and cultural fit. The right environment can make a big difference in your personal and professional life. 

A good tip is to connect with local expat communities or business networks to get a feel for what daily life is like. You can join websites like Expat.com, local LinkedIn groups, or Facebook groups dedicated to expatriates to find those insights.

Now that we've discussed key considerations, let's explore the list. 

The best country to start in will depend on your goals and target market. This article introduces countries that are generally favorable for business, whether due to their strategic location, favorable taxes, ease of entry, strong incentives for foreign investment, or other factors.

Here are the top 7 countries for foreign entrepreneurs to start a business, each offering unique advantages for global business success:

1. Hong Kong
2. Singapore
3. New Zealand
4. The United Arab Emirates (UAE)
5. Switzerland
6. Canada
7. USA

Hong Kong, a Special Administrative Region (SAR) of China, is a global hub for trade and commerce. Despite its small size, it ranks as the 10th largest trading entity in merchandise trade and 21st in commercial services worldwide. 

Hong Kong has established eight FTAs with 20 economies, including Mainland China, New Zealand, EFTA Member States, Chile, Macao SAR, ASEAN, Georgia, and Australia. Germany is Hong Kong's largest trading partner within the EU. It also holds a unique agreement with Mainland China called CEPA.

The jurisdiction offers a business-friendly environment characterized by low taxes and free trade policies. Coupled with its advanced infrastructure, highly skilled workforce, and strategic location near Mainland China, Hong Kong serves as an ideal gateway for businesses aiming to expand across Asia.

Key Information About Starting a Business in Hong Kong

The Republic of Singapore is a vibrant island nation located in maritime Southeast Asia. It is the busiest port in Southeast Asia, highlighting its vital role in international trade and its impressive economic growth.

The country is a member of several influential international organizations, including the Asia-Pacific Economic Cooperation (APEC), the Association of Southeast Asian Nations (ASEAN), and the Trans-Pacific Partnership (TPP).

Starting a business in Singapore is highly attractive due to its strategic position that provides easy access to Southeast Asia. The country’s low tax rates, combined with various grants for both domestic and foreign SMEs, create a favorable financial environment. Additionally, Singapore’s reputation as a technology hub and its strong intellectual property protections offer a secure and innovative setting for new enterprises.

Key Information About Starting a Business in Singapore

New Zealand, located in the South Pacific, is well-known for its glaciers and hot springs. Beyond its natural beauty, the country plays a significant role in Pacific affairs, with special ties to Niue, the Cook Islands, and Tokelau.

The country has several free trade agreements, including those with China, European countries, 11 Asia-Pacific nations, and others.

While it doesn’t offer the same tax benefits as Hong Kong or Singapore, New Zealand is known for its business-friendly environment, even earning recognition from Guinness World Records as the easiest country to do business in. It also offers various visa options that can lead to permanent residency.

Key Information About Starting a Business in New Zealand

The United Arab Emirates (UAE), also known as the Emirates, is a rapidly developing nation in West Asia situated in the Middle East. It borders Oman to the east and Saudi Arabia to the southwest, and it has maritime boundaries in the Persian Gulf, along with Qatar and Iran.

Historically, the UAE's economy has been centered around its rich oil reserves and oil exports. However, the country has been diversifying its economy and investing in infrastructure to prepare for a post-oil future. It has several free trade agreements, including those with Arab countries, the European Free Trade Association (EFTA), and Singapore.

With access to the Middle East, North Africa, and South Asia, as well as supportive rules that promote investment—such as 100% foreign ownership in free zones and tax breaks—the UAE is an excellent place to start and grow a business.

Key Information About Starting a Business in the UAE

Switzerland lies in west-central Europe, with Italy to its south, France to its west, Germany to its north, and Austria and Liechtenstein to its east. The country is famous for its stunning mountainous landscapes, cheeses, chocolates, and winter sports.

Switzerland has a robust network of 33 Free Trade Agreements (FTAs) with 43 partners, largely facilitated through the European Free Trade Association (EFTA).

Starting a business in Switzerland offers several compelling advantages. The country is known for its liberal and highly competitive economy and stable and transparent political system, which foster a reliable and predictable business environment. Additionally, Switzerland provides easy access to the EU single market.

Key Information About Starting a Business in Switzerland

Canada, located in North America, is the world’s second-largest country by total area, extending from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean. It boasts the longest coastline globally and is known for its progressive and open policies.

The country benefits from various trade agreements, such as the Free Trade Agreements (FTAs) and Foreign Investment Promotion and Protection Agreements (FIPAs). Canada also supports World Trade Organization (WTO) agreements covering trade laws related to intellectual property, tariffs, and technologies.

Starting a business in Canada is attractive due to its stable economy, lower corporate taxes, and strong ties with the US. The country’s strategic location, surrounded by three oceans, over 550 ports, and 18 major airports, enhances its business ecosystem. For those looking to relocate, Canada is one of the best places to live, offering an excellent quality of life and free healthcare.

Key Information About Starting a Business in Canada

The United States is a country in North America, stretching from Alaska in the northwest to Hawaii in the Pacific Ocean. It includes 50 states, a federal district (Washington, D.C.), and several territories.

The US has 14 free trade agreements with 20 countries. More importantly, it is a major global superpower with significant influence in international economics, politics, and military affairs.

Starting a business in the US offers key benefits, like a strong economy, solid infrastructure, and access to capital. With a large and diverse consumer base, the country offers plenty of opportunities for innovation and growth. It is also regarded as the world’s most startup-friendly countries, highlighted by Silicon Valley, a major tech hub known for its concentration of high-tech companies and venture capital.

However, tax advantages might not be a significant benefit compared to some other options on this list. Generally, it's advisable to consider incorporating a US entity if you plan to largely target the US market, expect significant exports to the US, or are a technology company seeking resources.

Key Information About Starting a Business in the US

Apart from the countries previously mentioned, several other notable locations are frequently discussed. For example, 

• Germany is often highlighted as the third largest economy in the world, but it is also renowned for having extensively complex regulations.
• The Czech Republic is recognized among startups for its lower overhead costs. However, it may not match the prominence of major startup hubs like the US, Berlin, or Amsterdam, and it may have a language barrier. 
• Denmark ranks 4th in ease of doing business according to the World Bank and is renowned for its high quality of life and stable economy. However, it also has the highest statutory income tax rates among European countries.
• South Korea's rapidly growing economy and focus on innovation offer great potential, but cultural differences and a big language barrier likely pose challenges for foreign entrepreneurs.
• The United Kingdom offers a strong economy and government incentives. However, challenges include a complex tax system, a potential shortage of workers, intense competition, and regulatory changes.
• The Netherlands provides benefits like a stable economy, a multilingual workforce, and supportive regulations for innovation and foreign investment. However, entrepreneurs may face challenges with complex legal and financial regulations and navigating employment laws.
• Ireland has one of Europe's lowest corporate income tax rates, a skilled workforce, high economic growth, and widespread English usage. However, its domestic market is smaller than that of larger countries.
• Sweden has a strong and stable economy, but business owners may face challenges with high individual tax rates and complex labor laws.

When considering where to establish a business, each country offers distinct advantages. 

Hong Kong and Singapore are known for their favorable tax regimes and strategic locations in Asia. New Zealand and Switzerland provide excellent access to European markets, with New Zealand notable for its ease of doing business and high quality of life, while Switzerland is recognized for its free-market economy. 

The UAE stands out for its attractive tax incentives and access to the Middle Eastern market. In North America, both Canada and the USA offer significant economic influence and a range of opportunities for growth and investment.

Regardless of the chosen country, a key to successfully doing business abroad is leveraging local expertise. Local experts can greatly simplify the business setup process and facilitate a smoother entry into the new market.