Starting a business in the U.S. costs $735, which is relatively affordable at just 16 percent of the average monthly paycheck.Credit: Jason Kempin/Getty Images for iHeart Media
Starting your own business should be cheap, right? Because if you're successful, you create jobs, wealth, and tax revenue. Everybody wins. And yet, becoming an entrepreneur is not cheap — at least not everywhere.
As a budding businessperson anywhere, you must jump through a series of administrative hoops by acquiring the proper approvals, permits, and licenses. Those cost money as well as time.
A world map of the cost of starting a business.Credit: BusinessFinancing.co.uk, reproduced with kind permission.
So, how much cash do you have to fork out before you can start forking it in? Based on World Bank data, BusinessFinancing.co.uk produced a map for that. And it shows some pretty stark differences between countries. But first, some context:
- For the benefit of comparison, the map has converted all local currencies into U.S. dollars. By that metric, the United Arab Emirates is the most expensive country in the world to start a business: $7,443.51. The cheapest countries are Rwanda, with no cost for the first two years; and Slovenia, where there are no fees, only a requirement to have capital of €7,500 ($8,900).
- However, these absolute amounts should not just be compared to each other. They should also be considered against the local living standard, which determines relative affordability. For example, setting up shop in Kazakhstan costs $12, which is just 2 percent of the average monthly wage. Doing the same in Congo costs $1,232, which is more than two times the Congolese annual income.
Europe: UK beats Belarus
The greener, the better; orange is expensive. Italy, Austria, Netherlands and Belgium are expensive places to start businesses.Credit: BusinessFinancing.co.uk, reproduced with kind permission.
Europe is a pretty diverse place when it comes to the cost of setting up a business. On the low end of the scale, twelve countries have fees of less than $100. On the high end, eleven countries require more than $1,000.
- Apart from Slovenia (see above), the UK is the cheapest country in Europe, even beating Belarus ($18.18). All you need to pay is a £12 ($17) fee to register at Companies House, and you're good to go.
- The most expensive place? Italy, where setting up an azienda will set you back a whopping $4,895. That's more than twice the average monthly income ($2,403).
North America: U.S. in the Goldilocks zone
The Bahamas and Mexico are the most expensive places in North America to set up a business. Credit: BusinessFinancing.co.uk, reproduced with kind permission.
The U.S. ($725) is in North America's Goldilocks zone: only half as expensive as Mexico ($1,463.81) but more than four times as dear as Canada ($166.19).
- Still, the U.S. cost of setting up a business is just 16 percent of the average monthly paycheck ($4,458). That compares favorably to the affordability of becoming a company owner in Mexico, where it equals nearly two and a half average monthly paychecks.
- The absolute cheapest place in North America is Belize ($99.31), which is about 33 percent of the average monthly wage in the country.
- In absolute terms, the Bahamas are the most expensive country ($1,810.92), but in relative terms, it's Haiti: setting up a company costs $932.80, which is close to 14 Haitian monthly paychecks ($67).
South America: Venezuela, land of opportunity?
In Venezuela, setting up a business will set you back no more than 21 cents.Credit: BusinessFinancing.co.uk, reproduced with kind permission.
Setting up a business is very expensive in Suriname, Ecuador, Bolivia, and Uruguay but relatively affordable elsewhere. It's even super cheap in Venezuela and Chile.
- Suriname is the most expensive country in South America, both in absolute and relative terms: it costs $3,030 to set up, which is more than 11 times the monthly income. And that's before an extra 8 percent on top for a notary service.
- What a difference one country over: in Venezuela, all you need is 21¢. That pays for the reservation of your company name, its publication in a local newspaper, and other formalities. That is less than 1 percent of Venezuela's relatively low monthly income ($1,232). Then again, as Venezuela inches closer to economic collapse, it makes sense for its government to remove as many barriers to entrepreneurship as possible.
Africa: improving, but a long way to go
Starting a business costs you $900 in Somalia but less than $13 in South Africa. Credit: BusinessFinancing.co.uk, reproduced with kind permission.
Africa's low wages are a double-edged sword. They are a boon to companies in search of manual labor but a barrier to local entrepreneurs looking to invest in a company of their own. In many places, those barriers remain firmly in place, but others have realized the benefit of encouraging start-ups.
- The most expensive African country in absolute terms is tiny Equatorial Guinea ($2,322), where entry into business eats up 7.2 average monthly paychecks.
- In relative terms, it is nearby Congo (not DR Congo, but its smaller neighbor), which has the highest relative cost of starting a business, not just in Africa but the world: 25.5 average monthly paychecks.
- However, across the Congo River, in the DRC, the cost of starting a business is just $80. It's one of more than a dozen African countries where you can set up shop for less than $100. And that includes economic powerhouses like Egypt and South Africa.
Middle East & Central Asia: very expensive to very cheap
In Pakistan, you can get your own company for just under $20. That's a fraction of the cost in Syria, nearly $1,400. Credit: BusinessFinancing.co.uk, reproduced with kind permission.
This is not one region, but two: the very expensive countries are in the Middle East, and the very cheap ones are in Central Asia.
- As mentioned, the UAE is the world's most expensive place to start a business but not the least affordable: all you need is 2.25 monthly paychecks.
- Neighboring Qatar ($3,951.94) and Saudi Arabia ($1,266.57) aren't cheap either. However, Bahrain ($230.78) is curiously cheap, less than a third of the cost of starting up a company in war-torn Yemen ($807.79).
- Kyrgyzstan ($8.35) is the cheapest country in its part of the world, but most of the surrounding countries are pretty cheap as well. Perhaps low start-up fees are not the decisive factor for Afghanistan's business climate right now; its looming civil war is.
East Asia & Oceania: New Zealand is both easy and cheap
Starting a business costs you $900 in Somalia but less than $13 in South Africa.Credit: BusinessFinancing.co.uk, reproduced with kind permission.
With not a single four-figure fee in sight, and relative cost low as well, setting up business in this part of the world is both cheap and affordable.
- Cambodia stands out, but not in a good way. The cost of going into business ($746) in the country is equal to about 7.5 monthly paychecks, the highest figure in the region.
- The cheapest country is Timor Leste ($10), but that still sets you back 9 percent of your monthly income.
- When the chips are down, New Zealand has the best cards. Starting a business in NZ costs $43.48 — low in absolute terms and even lower in relative terms: just 2 percent of the average monthly paycheck ($2,838). On top of that, the World Bank rates New Zealand first in terms of ease of starting a business: just one procedure, and you're up and running in less than a day.
Maps by BusinessFinancing.co.uk, reproduced with kind permission. Find their article on this topic here.
Strange Maps #1093
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The Great Pacific Garbage Patch is a vortex of trash located between America's West Coast and Japan. In fact, it's not only one patch—there's a western patch closer to Japan and an eastern patch bobbing around southern California. While the surface debris is bad enough, it turns out that 70 percent of the garbage sinks to the ocean's bottom.
Waterways are not the only places we dump trash. While environmentalists finally forced change on Staten Island's Fresh Kills Landfill, the world's largest garbage dump was the subject of notoriety for being visible from space. Speaking of space, humans have also left plenty of trash floating in the ether. As of 2019, an estimated 129 million pieces of space debris orbit our atmosphere.
While most of the debris is tiny, roughly 34,000 objects measure over 10 centimeters in length. This includes dead spacecraft like the U.S. ship Vanguard I which first launched in 1958, and a camera lost by American astronaut Ed White on the first-ever space-walk. While most debris will incinerate upon entering Earth's atmosphere, many problems exist due to all that trash, such as interfering with newer missions.
Artist's impression of the terrestrial suburbs, with its satellites and debris
Credit: ESA
"Out of sight, out of mind" is not an appropriate mantra if we want to continue space exploration. Last week, the European Space Agency (ESA) took the proactive step of finalizing a contract to begin space clean-up. Beginning in 2025, the ClearSpace-1 mission will remove a washing machine-sized piece of junk—a payload adapter—with a four-armed claw spacecraft. After plucking it from space, the claw will force it downward until incinerated.
Over 23,000 objects have been discarded in 5,500 launches over the last 60 years. Space junk can float around for thousands of years. This is not a benign occurrence. In 2009, a communications satellite collided with a dead Russian military satellite, resulting in thousands of pieces of new debris.
Cleaning up small junk is quite difficult—there's nothing akin to a pool skimmer in space yet—so ClearSpace, the company behind this project, will begin by grabbing a 112-kilogram payload adapter that was originally launched in 2013. The team is using a claw due to its mechanical flexibility; they tried a net as well, but given that you have to get it right on the first attempt, they wanted a bit of breathing room.
ClearSpace-1: Earth’s First Space Debris Removal Mission
The ESA signed a $105 million contract with ClearSpace for this project. ClearSpace CEO Luc Piguet says there's a lot of work in outer space:
"The way space has been used until now has led to a situation where over 5,000 satellites and out-of-control rocket stages are in orbit compared to only 2,700 working satellites. In-orbit services are not only a natural part of future space operations, they will also ensure the development of a thriving space economy."
ClearSpace isn't the only company leaving Earth's atmosphere. In October, the Japanese company, Astroscale, announced that it raised $191 million to clean up space debris. This is part of a broader movement by the U.K. Space Agency, which has awarded seven companies with £1m to clean up space. Graham Turnock, chief executive of the agency, says space will become an economic powerhouse in the coming years.
"People probably do not realise just how cluttered space is. You would never let a car drive down a motorway full of broken glass and wreckages, and yet this is what satellites and the space station have to navigate every day in their orbital lanes… This funding will help us grasp this opportunity and in doing so create sought after expertise and new high skill jobs across the country."
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Stay in touch with Derek on Twitter and Facebook. His new book is "Hero's Dose: The Case For Psychedelics in Ritual and Therapy."
They can get candid with each other. In this Big Think Live session, Victoria Montgomery Brown, co-founder and CEO of Big Think, and Charles Duhigg, Pulitzer Prize-winning reporter, will discuss entrepreneurship, decision-making, and leadership lessons from Victoria's new book, Digital Goddess: The Unfiltered Lessons of a Female Entrepreneur. The book is a raw and real roadmap for any woman who has ever thought about striking out on her own, and will empower you to get meetings, raise money, and make hard choices—and never get so serious that you can't still have fun doing what you love.
STREAMING LINKS
Big Think Edge | YouTube | Facebook
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Victoria Montgomery Brown has built and run Big Think for the last 12 years. It's become the leading digital media knowledge company, making people and companies smarter and faster with the world's best thinkers and doers. It wasn't a venture-funded tech darling, born and raised in a Silicon Valley incubator. It's a scrappy, creative, labor of love that was born in a New York City bar and raised in a rented closet in someone else's office. It's had to fight for its existence most of the time. Her new book is Digital Goddess: The Unfiltered Lessons of a Female Entrepreneur (available for preorder).
Brown graduated from Montreal's McGill University in 1997 and received her MBA from Harvard Business School in 2003.
Charles Duhigg is a Pulitzer-prize winning reporter and the author of Smarter Faster Better, about the science of productivity and The Power of Habit, about the science of habit formation in our lives, companies and societies. Duhigg studied history at Yale, received an MBA from Harvard Business School, and was a reporter at The New York Times for a decade. Today, he is a leading writer on the nature of habits and productivity. He writes books and magazine articles for The New York Times Magazine, The New Yorker and The Atlantic.
