Before expanding overseas, tech companies must do significant research to determine which markets offer the most favorable conditions for their growth objectives. For many tech organizations, a country’s relative ease of doing business remains a top (if not the number-one) factor in selecting it as a global expansion destination.
Gathering data from Velocity Global’s 2020 State of Global Expansion™ Report: Technology Industry and the World Bank’s 2019 Doing Business Report, we will review what makes the world’s most business-friendly countries outside the United States and the United Kingdom so attractive for tech firms.
Market #3 for Ease of Doing Business: Hong Kong
Although social and political unrest continues in Hong Kong, U.S. and UK tech firms still cite it as their fifth-most popular market for global expansion. In the World Bank report, Hong Kong places second only behind Singapore in terms of ease of doing business in the Asia-Pacific region.
Companies that must build their own offices, warehouses, and other necessary structures to begin operating in-country find Hong Kong the easiest in the world in terms of dealing with construction permits, outpacing other high-growth areas. Getting electricity to new sites isn’t easy in every international market. Hong Kong, however, helps firms get power to their sites in an average of three days. It also created and heavily invested in a task force responsible for trenching, excavation, and reinstatement of underground cables. Further, Hong Kong offers extensive training required for all Registered Electrical Workers (REWs).
Not all businesses require new offices or warehouses built to begin operating in Hong Kong. However, all companies must consider Hong Kong’s impressive foreign direct investment at 23.8% of its GDP. Business leaders have peace of mind knowing that despite unrest growth opportunities remain to build their business in the country.
Market #2 for Ease of Doing Business: Denmark
Compared to other European markets, Denmark leads across the board in terms of regulation, internet connectivity, and access. These factors make it a premier location for global expansion.
Denmark is the world’s number-two location for global expansion on Velocity Global’s Global Expansion Tech Index™, and in terms of regulation, is only slimly outpaced by Singapore. The Nordic nation’s overall score on the Doing Business Report increased between 2018 and 2019, further solidifying its leading position.
The Doing Business Report notes that entrepreneurs face only a 3.5-day waiting period for business registration and can complete all necessary legal requirements to construct a warehouse within two months. The country sees eight newly-registered businesses per 1,000 employees annually.
The country of 5.7 million boasts top-tier talent, gaining high marks from the World Bank for its “flexicurity” model. This model provides “employee protections while maintaining labor market flexibility.” Although Denmark’s high personal income tax rates may surpass other European nations, businesses and their employees benefit from Denmark’s generous social benefits. Further, Denmark’s relatively low unemployment rate of 4.9% sits well below the European Union average of 6.6%.
Market #1 for Ease of Doing Business: Singapore
Singapore claims the top spot on the Global Expansion Tech Index and the top Asian nation for ease of doing business on the World Bank’s report, improving four spots from last year’s Global Expansion Tech Index. Singapore and Hong Kong are the only Asian countries to make the top 5 global markets for 2020.
It’s easy to understand why tech businesses are attracted to the region: Singapore simplified post-registration procedures (such as tax registration, social security registration, and licensing), and abolished corporate seals in “documents as a deed, or other documents such as share certificates.”
Singapore further improved its ease of doing business by introducing a consolidated law on voluntary mediation, making enforcing contracts easier.
Simplify Your International Growth with an Experienced Expansion Partner
In terms of ease of doing business, Hong Kong, Denmark, and Singapore outpace other markets in their respective regions and offer tech companies fertile ground on which to grow their international businesses. No matter how business-friendly these countries may be, expanding overseas is a complex task—but there’s a way to simplify global expansion.
Velocity Global’s International PEO (Professional Employer Organization) solution streamlines global expansion by becoming your firm’s Employer of Record, and hires employees on your behalf while you maintain complete employee oversight. Expanding with International PEO enables you to test one or more of these top markets before making a long-term commitment.
Want more information on how Velocity Global helps companies just like yours expand overseas? Reach out to us today.