In the business world, one of the first challenges is registering your company. This process varies depending on location: today, some countries offer innovative solutions to simplify it, while others maintain more rigid and traditional systems. From Delaware (USA), until Cubawe explore these differences.
Innovation and ease in startup registration. USA It is frequently considered the best country to start a startup, due to the ease and speed of completing procedures. Services like LegalZoom allow you to register companies 100% online, and some banks, such as the Mercury Bankoffer the possibility of opening a bank account without having to go in person.
The state of Delaware, for example, became a magnet for entrepreneurs. There, formalizing a business can take less than an hour. It also offers important tax advantages: they do not charge taxes on sales or investment income, and companies that operate outside of Delaware They are exempt from income tax.
In Asia, Hong Kong It also stands out as an attractive place to start a business. Recently, it was classified as the fifth best city in the world to start a business for him World Bank Doing Business report, thanks to the ease of registration, speed and low costs. In addition, it has a competitive and flexible tax system, as explained by the South China Morning Post.
Reducing taxes is a common tactic to attract investors, as demonstrated dubai. Recently, this city implemented an attractive income tax: companies with income over USD 100,000 pay only the 9%while those with lower incomes are exempt, according to the CNBC. In addition, you can register a company in just 15 minutes from anywhere in the world, completely online through the platform. “Basher”as he explains official Web site.
Within the European Union (EU), Estonia innovated to attract global entrepreneurs by creating the “e-residency”, a type of virtual residency that anyone in the world can apply for. According to your Web page, with it you can access the multiple benefits of starting a business in the European country: simple and online procedures, low start-up costs and tax incentives for startups. It is an easy way to start a business in the EU for foreigners.
Challenges of traditional systems. In Argentina, the process of starting a business is more complex. The registration of a company requires more time due to the number of procedures, and because it is necessary to present the documentation in person.
Furthermore, taxes in our country are high. Income tax can reach 35%and the value added tax (VAT) is twenty-one%. Social charges, for their part, represent a 41% of an employee’s salary.
Finally, many times it becomes necessary to import goods to produce, which can have up to a 35% of tariff. Additionally, if the startup plans to export, taxes can reach twenty%.
Other countries in the region moved toward a more business-friendly stance. In ChiliFor example, it is possible to register a company 100% online and in less than a day.
In Uruguay, the procedures for opening a company are also relatively simple. A company can officially operate in less than a week, with the option of registering it online. Additionally, the country offers tax holidays of up to 11 years on foreign income and does not levy capital gains or wealth taxes on foreign assets.
For its part, Paraguay stood out in recent years for offering a very attractive tax system for companies, called “10-10-10”: 10% to business income, 10% VAT (value added tax), and 10% to personal income. With the exception of VAT, they are the lowest percentages for Latin America. Additionally, they offer the possibility of opening a startup in just 72 hours, at no cost and virtually.
At the most restrictive end of Latin America is Cuba. Until recently, there was no legal framework that allowed Cubans to start a business. Currently, it is possible to create the calls “MSME”, organizations with legal entity but that only operate in sectors considered non-essential by the government. Additionally, approval of your registration is discretionary and can take weeks.
Finally, China It captured the interest of entrepreneurs, with reforms aimed at improving the business environment. But startup registration may take longer compared to other places. The process, which involves four steps and can be done virtually, takes up to nine days, depending on the World Bank Doing Business report. For foreigners, this process can be even more complex: advice from specialized consulting firms is needed.
In my personal experience, having undertaken the USA, I was able to see how the ease of starting businesses greatly helps the development of a more competitive environment, where innovative ideas constantly emerge. Furthermore, the clarity and predictability in the rules of the game encourage potential entrepreneurs to launch their projects, unlike in other countries, where it can be a complex and risky challenge.
When reflecting on what the process of registering a business is like around the world, one trend stands out: countries where it is easier to create companies adopted digital tools and converted bureaucratic processes into more efficient and accessible procedures. Promoting entrepreneurship contributes to the economic and technological development of each country.
*Lucas Roitman is a researcher at Apple and Stanford.
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by Lucas Roitman
