StartupBlink Blog

Introduction

Starting a business can be challenging anywhere, but some countries manage to create a better environment to succeed. This in-depth, updated report features the top 100 Startup Business-Friendly countries, as determined by our “Business Score.” Those are the countries that excel in giving their entrepreneurs the best infrastructure and business conditions to operate a startup. The score takes into account factors such as internet speed, R&D investments, and other key parameters that support the development and success rate of a business.  In 2022, the most Startup Business-Friendly countries were Sweden, The United Kingdom, Norway, Denmark, and Finland. This comprehensive report offers an overview of the best countries to relocate your startup to based on their business friendliness.

Explaining the Business Score

Main Components of StartupBlink’s Total Score

StartupBlink’s Global Startup Ecosystem Index (GSEI) ranks countries and cities based on their support for startups. Each ecosystem is given a total score that is the sum of three sub-scores: Quality, Quantity, and Business Environment.

The Quantity score measures the activity level of an ecosystem by counting the number of startups, coworking spaces, accelerators, and startup-related Meetups in the region.

The Quality score looks at the success of the top startups in an ecosystem, as well as the number of “special entities” that have been produced, such as Unicorns (private companies valued at over US $1 billion), Exits (successful acquisitions or initial public offerings), and Pantheons (startups that have reached a significant level of success).

The Business Environment score (also known as the Business Score) focuses on factors that affect the entire country, such as national policies, legislation, and infrastructure. 

To calculate the Business Score, StartupBlink considers parameters such as:

  • Diversity Index
  • Internet Speed
  • Internet Freedom
  • R&D Investment
  • Availability of various technological services
  • Number of Patents per capita
  • Level of English proficiency
  • Top Universities per location
  • Internet Users
  • Regulatory Quality
  • Innovation Index
  • Ease of Doing Business Index

StartupBlink excludes elements that might have an ambiguous impact on the success of a country, and only includes factors that have a clearly positive or negative impact. For example, slow internet or restrictions on internet use are likely to hinder the growth of a country as a Startup Business-Friendly environment, while the cost of living might have both positive and negative effects. Therefore, the cost of living is not included in the Business Score.

About Startup Business-Friendliness

As a startup, you want to choose a country that is supportive of your business. The Business Score is a measure of how friendly a country is to businesses like yours. A high Business Score means you’ll have access to fast internet, a supportive regulatory environment, and well-developed infrastructure, which can help your startup grow faster and more efficiently.

On the other hand, a country with a low Business Score may have obstacles like bureaucracy, red tape, or outdated infrastructure that can make it difficult for your business to operate and expand. If you’re considering starting a startup in one of these countries, you may want to carefully weigh the benefits and challenges. In some cases, it may be worth working with local authorities to improve the Business Score and create a more supportive environment for businesses. Our advice to these countries is to focus their resources on improving the business environment.

If you are in an underperforming ecosystem that makes it difficult to succeed, either leave it or lead it. To foster a thriving startup ecosystem, policy-makers should prioritize reforms that streamline regulation, eliminate unnecessary bureaucracy, and invest in essential infrastructure.

Eli David – CEO of StartupBlink

Key Insights

Europe Takes the Lead: The Top 30 Locations for startup-friendliness are Dominated by European Countries

Among the top 30 startup-friendly countries, the European region boasts 21 locations, followed by 5 Asian-Pacific, 2 North American, and 2 Middle Eastern & African countries.

Percentage of Startup Business-Friendly Countries in each Region

The Top 5 Most Startup Business-Friendly Countries in 2022

In 2022, Sweden, the United Kingdom, Norway, Denmark, and Finland, are the top locations in terms of startup-friendliness.

The Top 5 Most Startup Business-Friendly Countries in 2022
From 2021 to 2022, Luxembourg, Singapore, and Latvia showed a noticeable increase in their Business Score rankings

From 2021 to 2022, Luxembourg increased its position from 41 to 30, and Singapore from 28 to 17. Latvia also jumped from 36 to 27.

Norway, Denmark, and New Zealand Soar in Business Score Rankings

In 2022, the Business Score rankings of Norway, Denmark, and New Zealand were considerably higher than their global rankings. Specifically, New Zealand ranks 22 spots higher, Denmark ranks 13 spots higher and Norway ranks 21 spots higher than their respective global rankings, indicating a favorable business environment.

Ranking the Top 100 Startup Business-Friendly Countries

As we evaluate the startup business-friendliness of each country, we considered how their Business Score rank has changed compared to 2021 as well as the difference between Business Score Rank and Global Rank difference in 2022 as shown in the GSEI 2022. By examining these metrics, we were able to gain a comprehensive understanding of the business climate in each country and how it has evolved over time.

In 2022, we observe that European countries are dominating the charts for startup-friendliness, as the top four consists of Sweden, the United Kingdom, Norway and Denmark. Each of these countries showed a slight increase in their Business Score rank. As the leader of 2021, the United States has lost 5 positions and now ranks 6th in the world for startup-friendliness. Among the top 5, Denmark and Norway showed progress by climbing up 2 spots. Moreover, these two Nordic countries have a significantly higher Business Score rank compared to their global rank, with Denmark ranking 13 spots higher and Norway ranking 21 spots higher.

Luxembourg and Singapore have made impressive strides in the Business Score rankings, both jumping 11 spots.
Additionally, the Business Score rank of these countries is significantly higher than their overall global rank, with Latvia ranking 17 spots higher and Singapore ranking 11 spots higher. Moreover, the Netherlands and Japan initially showed an increase of 5 spots compared to their 2021 rankings.

Israel, Singapore, and Canada are relatively underperforming with their Business Score rankings, as they are ranked 20, 12, and 7 spots below their global rankings.

Although they have not managed to be in the Top 30, there are some countries worth mentioning for their noticeable achievement in the 2022 Business Scores rankings. These countries are Senegal, Kosovo, Kyrgyzstan, and Andorra. They have made it into the top 100 startup-friendly ecosystems for the first time, signaling an improvement in the startup business-friendliness of these countries.


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