The Best Countries to Set Up an Online Business

E-commerce continues to grow year-on-year, with eMarketer forecasting global sales worth $6.542 trillion by 2023, accounting for 22 percent of all retail sales (up from 14.1 percent in 2019). This means 2021 could be the year to start your online business.

But where’s the ideal place to start your business from?

To find out, our group of researchers looked at 20 different categories across 99 countries. From GNI per capita and corporate tax rates to the number of social media, internet users, and co-worker spaces by each individual country, we analyzed a plethora of key areas so you don’t have to.

What did the data suggest?

That the majority of countries most suited to starting an online business are located in Europe. Joined by the US, Canada, and Singapore, these countries provide an all-around great starting point for your next business venture – but, the “perks” of these locations tend to be met with a higher corporate tax rate.

The Top 10 Countries to Set Up an Online Business

1. Denmark – At the top of the league is Denmark, which enjoys a top score for secure internet servers (over 277,000 per 1 million people) and share of individuals with a finance account (99.92%). And based on the percentage of GNI it costs to start a business, Denmark is the cheapest of our top 10 (0.2%). It also ranked second highest for how much of the population use the internet for online purchases/paying bills (88%) and is positioned near the top for total number of internet users (98%). Denmark did, however, have the second-lowest postal efficiency score in our top ten, has a very low number of co-work spaces (32), and received mid-range scores for mobile internet speeds (66.68 Mbps), social media user penetration (71%), and corporate tax rates (22%).
2. Switzerland – When it comes to starting an online business, Switzerland could be the place. This is due to its top score for GNI per capita (85,500 USD), full marks for postal efficiency, access to 6 out of 7 payment processing providers, and connection with 44 other countries within the same time zone (UTC +1). Of our top 10, it also had the most broadband subscriptions (45.21% of the population). Nevertheless, Switzerland, like all of our top 10 countries, was mid-table for corporate tax rates (21.15%), social media penetration (52%), and mobile internet speeds (73.85 Mbps). It also scored below average for its number of secure internet servers (just under 96,000 per 1 million people) and is lacking in co-worker spaces (154), but this is to be expected with the country’s size.
3. The Netherlands – The Netherlands is the best of our top ten for mobile internet speeds (88.13 Mbps) but is still only mid-table overall. Overall, it ranked second for postal efficiency, fifth for fixed broadband subscriptions (43.63 per 100 people), and is one of the quickest places to start up a business – just 4 days. However, despite the speed with which you can start a business, it is the second-most expensive of our top 10 for start-up costs at 4% of GNI.
4. The United States – With access to 2,421 co-worker spaces, the United States is the top-scorer for this category, with 42.98 percent more spaces than second-place India (perhaps this isn’t much of a surprise when you consider its size, though). However, it is this top score, along with its top score for payment provider coverage (all seven operate here), that pushes the US into the top 5. It is mid- to top-table like the rest of the top 10 for broadband speeds, social media user penetration, secure internet servers, and corporate tax rates but is the worst of our top 10 for mobile internet speeds (53.44 Mbps), share of people with finance accounts (93%), and internet user figures (87% of the population). Equally, if you are thinking of trading globally, the US only shares its time zone with 12 other countries.
5. Norway – With 89 percent of the population using the internet for online purchases and paying bills, Norway is our top-scorer in this category. It also ranked second highest for GNI per capita (82,500) and came joint top with Denmark for % of internet users by population (98%). Of the top 10, Norway did have the lowest economic freedom score which comes primarily from its high government spending and mid-range labor freedom and tax burdens. It also lacks secure internet servers and co-work spaces (this can be attributed to its small size and sparse population, however).
6. Sweden – Despite not coming out on top for anything, Sweden was the best of our top 10 for digital skills and second-highest of the top 10 for its logistics performance. Sweden is also up there for how much of the population use the internet (96%), have a finance account (99.7%), and use the internet for online purchases/payments (84%). As with many of our top 10 countries, however, Sweden lacks secure internet servers and co-work spaces.
7. Singapore – If you want exceptionally fast broadband speeds, head to Singapore as it enjoys an average speed of 229.42 Mbps (the only country in our study to exceed 200 Mbps). It also comes out on top for economic freedom (89.4), ranks best in our top 10 for social media user penetration (79%), and has the lowest corporate tax rate (17%) of our top 10. Starting a business is quick and easy, too, with just 2 procedures required which take around 2 days. What pulls Singapore’s score down, though, is its lack of broadband subscriptions (25.81 per 100 people) and the percentage of the population using the internet for online purchases/payments (57%). It’s also the worst of our top 10 for connections with countries in the same time zone, sharing UTC +8 with just six countries.
8. Germany – At the top of the Logistics Performance Index is Germany, which also comes out toward the top for postal efficiency. It also follows a similar pattern as the other top 10 countries when it comes to broadband subscriptions, secure internet servers, GNI per capita, and the number of finance accounts, internet users, and online purchases. However, while few of our top ten scored highly for mobile and broadband speed, Germany did come out as the worst with speeds of 49.67 Mbps for mobile and 120.13 Mbps for broadband. Plus, only 45 percent of the population uses social media. Germany is also the most expensive and complicated place to start a business in our top 10, costing 6.5% of GNI and involving 9 procedures. You’re hit with the highest corporate tax rate here, too (29.89%).
9. Canada – Canada’s highlights are the ease with which you can set up a business (2 days and 2 procedures) and the low costs involved (0.3% of GNI). In many of the other areas, it meets up to the scores of our other top 10 countries, only falling short with its connection to other countries within the same time zone (12), GNI per capita ($46,370 USD), and high corporate tax rate (26.8%).
10. Luxembourg – Thanks to it having the third-highest GNI per capita ($73,910 , according to Best Accounting Softwares List.