The Best Countries rankings, formed in partnership with BAV Group, a unit of global marketing communications company VMLY&R, and the Wharton School of the University of Pennsylvania, are based on a survey that asked more than 20,000 people from four regions to associate 73 countries with specific characteristics.
It is based on an equally weighted average of scores attributes that relate to how open for business a country is: bureaucratic, cheap manufacturing costs, corrupt, favorable tax environment and transparent government practices.
Why do investors prefer Delaware corporations?
Among the many decisions, stresses, and considerations that startup founders face, choosing where to incorporate is not often at the forefront of founders’ minds. While some businesses incorporate in Delaware at the company’s inception, many founders naturally ask why this additional and seemingly unnecessary step is required – or why the company should even incorporate in Delaware to begin with.
There are many reasons the overwhelming majority of successful startups are incorporated in Delaware.
- Investors Prefer Delaware Corporations
- Most Public Companies are Incorporated in Delaware
- Corporations Have More Privacy in Delaware
- Delaware is Focused on Business
- Delaware Has Courts that Only Hear Corporate Cases
- Attorneys are Familiar with Delaware Case Law, and It Could Save You Money
- Delaware is Efficient, for a Price
Delaware C corporations are preferred over S corporations from the professional investor’s perspective.
This is because all shareholders in an S corporation must be U.S. citizens, residents and “natural persons.” A Venture Capital firm would not qualify as a “natural person,” thus a VC firm could not invest in an S corporation. Another disadvantage for investors is that S-Corps cannot offer preferred stock—they can only offer common stock.
Delaware is universally regarded as the best legal forum for any business dispute due to its impartial chancellors and a large body of pro-business case law.
Delaware’s courts, tax system, laws, and policies have made it an attractive state for businesses to incorporate in since at least the early 1900s
Analysing some of these factors and including top business friendly countries, Hansen & Company has listed out the 10 most top startup jurisdictions-friendly countries in the world for entrepreneurs.
Japan is one of the reputed markets across the world for being old-fashioned, conservative, and risk-averse. Gradually, the mindset is changing and Japan is contributing to the global startup ecosystem that is growing rapidly. As per the Japanese Ministry of the Economy, the country is home to 10,000 startups. Back in 2018, the Japanese government came up with the ambitious J-Startup program that intends to produce as many as 20 listed companies or unicorns by 2023.
This has been possible with reasons such as innovative thinking, technological expertise, well-developed infrastructure, a well-educated expat community, skilled labour force, etc. With these pros, Japan has become a leader in sectors such as electronics and automotive production. And, some notable Japanese startups include Mercari, SmartNews, and Hachi Tama.
When it comes to Germany, it is the fourth-largest economy in the world and the largest one in Europe. The country offers ample chance for innovative and aspiring expats as English is spoken widely making it easier to build MNCs and attract talent from across the world. Germany offers favourable finance options and transparent business culture for startups. The German companies are backed by best global investors such as Earlybird VC, Ciaran O’Leary, etc.
Adding to these, the country has a highly educated workforce community, global connections, skilled labour force, and a well-developed infrastructure. The popular startups that have their roots in Germany include SoundCloud, Trivago, and Clue among others.
#3 United States
The United States is not new to the startup ecosystem as the country has a well-developed culture and long history of entrepreneurship. There is the Silicon Valley, which is a world-famous startup hub apart from others scattered across the country such as Atlanta, New York, Austin, San Diego, and San Francisco.
Of late, the United States has been witnessing a surge in the amount of funding being pumped in businesses, thereby leading to the growth in entrepreneurship in the country. The US has scored high in terms of global connections, well-developed infrastructure, technological expertise, and entrepreneurship. And, the big names in the tech business world such as Google, Facebook, Microsoft, Uber, etc. are based in the United States.
Switzerland is known as a serene peaceful paradise with stunning lakes, glaciers, and mountains among other attractions. However, beauty doesn’t stop it from disrupting the European tech startup ecosystem. Switzerland has been ranked the world’s most innovative country in 2017 and has a long history of investing in R&D.
Of Late, the city of Zug has progressed into a hub for the blockchain and cryptocurrency startups and is called Crypto Valley. The country has a successful startup ecosystem due to the availability of an educated population, a well-developed legal framework, and easy access to capital that benefit businesses. Also, it has a central location that makes reachable within Europe. Roivant Sciences, Dfinity, and Ethereum among others are some of the notable Swiss startups.
#5 United Kingdom
The United Kingdom is known for the existence of numerous tech startups. Also, the UK is also known for the presence of world-class universities and a diverse pool of international talent. It attracts both leading local and global investors to fund the startups in its region and 7 out of 10 leading VC funds in Europe are based here. Eventually, 37% of the total European unicorns have their roots in the UK.
Despite the Brexit negotiations, the UK tech startup ecosystem continues producing innovative startups such as Omnipresent, TransferWise, Revolut, Perkbox, etc. due to the global connections, well-developed infrastructure and legal framework, educated population, and technically-qualified workforce. The UK takes advantage of having the world’s largest English-speaking population.
Canada offers a robust support system for entrepreneurs and startups with an abundance of events and initiatives. The Canadian startups benefit from transparent business practices, educated population, a well-developed infrastructure and the favourable foreign exchange rates, R&D tax credits, and more.
In Canada, regions such as Montreal, Toronto-Waterloo, Ottawa, Edmonton, Vancouver, and Quebec City are innovative business ecosystems. And, the thriving sectors include Artificial Intelligence, life science & health, fintech, big data, cybersecurity, gaming, blockchain, and analytics. The successful Canadian tech startups include Shopify, Kik, and Hootsuite.
In the business world, Sweden is called a unicorn factory as the country is home to valuable brands across industries. The country has a small domestic market, which forces startups and entrepreneurs to think on a global scale from the start, which takes them to great heights. Moreover, the Swedish talent is well educated, multilingual and technologically sound.
Adding to these factors, the high tax rates in Sweden and entrepreneurs take big risks in their respective sectors. The well-known Swedish brands include Klarna, Mojang, and Spotify.
#8 South Korea
For the past few decades, South Korea has been witnessing a steady growth in terms of economy and is now the 11th largest economy in the world. The country’s tech startup ecosystem has witnessed a whopping growth in the past few years. This is possible with the numerous investments that flow into these startups. Also, the sandbox regulation introduced by the government in 2018 lets startups apply for a 2-year waiver from rules while they test their products.
South Korea has a strong base of innovation, skilled labour force, and ample technological expertise. Notable tech players based in the country are Samsung and LG and successful startups include Bluehole, Coupang, etc.
Australia is one of the most startup-friendly regions in the world and ranks fifth when it comes to the highest rate of female entrepreneurs in the world. In 2016 and 2017, the investments pumped into the Australian startup ecosystem grew to great heights surpassing that of the USA and Europe. Even the government grants are accessible from both the State and Federal levels.
What’s noteworthy about the Australian startup ecosystem is that there is ample opportunity for immigrants. And, it has been estimated that 57% of the startups in the country were founded by either immigrants or their children and 20% of the workforce is international talent. Australia has scored in terms of educated population, well-developed infrastructure, and well-developed legal framework. Canva, Airwallex, and Atlassian are some notable startups in the region.
The island of Singapore is dubbed a startup paradise in the startup ecosystem. Singapore is a gateway to millions of people living in Southeast Asia. The country’s government provides positive support to startups with significant subsidies and innovative policies.
Besides these, Singapore has a well-developed startup community with numerous accelerators and incubators. Also, there are more than 150 venture capital investors in the country that lead to the success of these startups. With its central location, Singapore scores in terms of global connections, innovation, and entrepreneurialism. Lazada, Garena, and Grab are some successful Singaporean startups.
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