Best country to start a business
Best country to start a business
The most ridiculous thing I have read in the mass media lately is the a list of the best countries to start a business or to do business. The is absurd. They list countries like Norway and Canada and Denmark and Switzerland as top.
This is crazy. They talk about stable law and tax codes etc. This is pure madness. Let me explain. The people writing the articles are journalists at best. I only have a masters in Economics but I am an entrepreneur. I am running my own business. The last place I would go is a high cost, high tax area, regardless of how stable the tax laws are.
The best place to start a business - Poland
The highest cost of connected starting or setting up any business is labor. In Poland you have people with PhDs and Masters that will work hard, with creative minds for 3 Euros an hour. Will anybody do that in Canada or Denmark or soft France? Poland’s tax rate is 19% on business, with tax breaks for new and foreign businesses, while the USA, Britain, France, Germany its 40%. Other countries are upset with Poland as they have not “harmonized” their tax rates with the west. Absurd. Low taxes are good, high taxes bad.
What about Scandinavia, even higher taxes and higher labor costs. Maybe five times the rate of Poland, and these western countries haved a worker shortage, while Poland and Eastern Europe has a worker surplus and a capital shortage. Read Adam Smith when there is free movement of labor and capital and a condition like this exists. Then you will figure out where the best country to start a business is.
What about infrastructure, Internet etc. Everything is new in Poland. Everyone is plugged into the internet, Poland is being pumped with EU money to rebuild its infrastructure.
What about accounting and laws. Very easy. Its called an accountant. Hire an accountant. Laws are EU laws. Accountants are pennies in Poland. Same laws, better labor for 1/5 the price. Very cheap. To start a company it could take one day and a few hundred dollars. Language-English is the second language in Poland, no language problem.
If anyone, wants to argue with me I am here. Can you honestly say that entrepreneurs are running to high priced Denmark to start a company? Why is Google and other major firms opening in Poland and not Norway? Price. Cost of labor. What is the best country to start a business? Poland. When you see these articles about the best place to start a company, do not believe them unless they tell you the best place to start a company is in Eastern Europe.
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Tags: best country to start a business, business, country, entrepreneur, law, Poland, tax
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August 24, 2008at 7:10 am
YOU choose bad country to start business, i know because Im from Poland
If you want run business it takes you ages ,procedures and not friendly people in counciles make your start very hard(mentality from comunism yet and corruption, no efficient systems)
Tax ok but You dont know for example about that:
If you start business in Poland you must pay big incurance ZUS (50% average salary in Poland) doesnt metter you earn money or not you pay tax from start in many countries you are free from tax ion start(I dont think about huge investors but that diffrent history) registration the smallest business takes 1 months minimum
you pay for everything
and
what is the most important the interior market is poor
for example businesses like cleaning etc doesnt exist there
Country good for huge investors like FIAT for example they have special economy
zones
Engineers are cheap, close to european union market
but not for private small investors
The best is USA, AUstralia and Canada to start business
There is business culture and rich interior market
and in Poland doesnt exist a bankrupt institucion if you are bankrupt you can go to jail:-(
best regards
August 24, 2008at 12:52 pm
I do not know why Polish people like to complain about their own country when foreigners get rich there? I know I am American that lives in Poland. 50% taxes? Ok the US corporate tax rate is 39% +7 % sales + other taxes and things and you do not even get medical coverage. It adds up to over 50%. In Poland now you can start a business in 1 day. My friends have done this. Maybe you are a 1990s guys. It takes a lot of running around but in Krakow people do it. Or on the internet. The Zus you are talking about is about 400 dollars a month. But this covers your insurance and pension. In the USA you have to pay for this yourself. Also for the first two years its only 100 dollars a month. In the States its much more complicated. In Poland you can be bankrupt as long as you do not cheat you will not go to jail, your just talking. If anything Polish law is too liberal and many people who do financial crimes walk the street. In the USA they do not mess around. Also Poland still gets a lot of EU money and if you are clever you can leverage your investment with this capital legally. Poland has a very cheap labor force that words very hard. Only after the South Koreans and the Czech in terms of hours in the whole world. Polish workers are highly sought after all over Europe. Set up a business in the UK or Norway if you like, with very high cost of labor and social costs also high. In Norway a bread rolls cost about 12 dollars, so good luck ‘entrepreneur of the year’ starting a business in the west unless you have a bank roll. USA, well everyone is singing the blues, your chance of to start a business is about 1 in 10, however, I would put the USA near the top of the list in terms of business if it was not for the cost of labor. Poland at this time is the best country to start a business.
September 10, 2008at 8:44 am
Mark, I can only imagine that you are joking when you were writing this article. I’ve lived and worked in Poland for 9 years now and started my own company 1 year ago. Eric is right, starting a business in Poland is a bureaucratic nightmare and not at all rewarding despite the 50% reduction in ZUS (social taxes and healthcare) that you are given for the first two years. Should you have a bad couple of months you can’t escape paying your ZUS contributions and if you miss the payment date by one day (easy to do when many of the accountants you pay “pennies” for, don’t perpare your paperwork on time) you are not able to claim any medical costs for the next 3 to 6 months) As for your comment that friends have opened companies using the internet! In one of the SIX offices I had to visit last week to change ONE of the items on my ‘comany description papers’ they explained that even there thay have to use two seperate computers in the office because their computers cannot talk to each other and the opperating systems are not compatible. There is NO information available over the internet to set up a company electronically. Everything must be done in person and don’t forget evrything (including your school certificates form 25 years ago) needs to be translated by a government approved translator. I love this country very much and plan to stay here but believe me it would heave been far far easier and totaly legal to have set up my company in the UK and simply work here as a foreign investor!
September 10, 2008at 9:26 am
KH,, First I am very sorry you had so much trouble. I know that at times it seems like a maze. I think your Polish is pretty good so you know what you are doing and it was not a language issue, but rather a paperwork issue. Further, I know where you are coming from, as Poles like to complain about how bad their country is and living in Poland it can be contagious. But my friend started a company in 1 day on the internet, in Krakow. And further the ZUS payment you talk about is about 250 pln per month for the first 2 years, after that you can do something else. But that means your is only about 55 GBP a month for full insurance for your family is you are a sole owner of the business.WOW full Wow,for Insurance and pension etc, that is cheap. I do not think you can do it for about 600 GPB anywhere, for your family for a year. Also the flat tax is 19%. Wow, in the States and the UK although progressive its 40% on business. Maybe you have a large company which is staff intensive or a different organizational structure that I am not aware of but the people I know said its no problem. However, I respect you being 100% legal, that is the way I did it here and I had to run around a lot and translate things but I just paid friends to help me with that. If you get all your paper in order legal translations will take a day to 3 days. I think the most important thing is to get someone who has done it before several times to help you. Wages are low relative to the west and it should not cost a lot. Your a business guy you do not want to do everything yourself, just pay someone to do it for you, this is what my friends do and you focus on your core business. If you do that that Poland is the best country to start a business.
September 10, 2008at 3:30 pm
Well thanks for the speedy reply and your positive attitude is a welcome relief… But… I just paid this month’s ZUS, there are 3 parts to it for everyone: Invoice 51- social fund 100.57zl, invoice 52- health care 205.87 and invoice 53- 10zl (this one varies from 0- about 10zl) and thats at half rate as you mentioned. Full ZUS, which I will have to pay from next year, is now about 750zl per month. (unless you are a farmer in which case you pay 30zl a month - why that is considered fair, I don’t know.) Yes Income Tax is only 19% for me but that’s because I’m a self-employed small business if my earnings cross a barrier of Xzl (I can’t remember the figure but I think it’s about 36,000zl) then my tax will increase to 40%!! I don’t have a family so I don’t see any benefits there either. And please bear in mind that Poland is now attempting to pass a law that will make pensions availiable only to people that have worked for 45 years. A 52-year-old Polish friend of mine has worked out that in order to get back from the government the monies that he will have paid in by the time he retires, he will need to live to the age of 127! And what am I getting from all this? Last year I was mugged and left unconcious with a broken leg, a good samaritan took me to the nearest hospital where, because I had no documents, they demanded that I pay 2000zl before they would give me an x-ray. I never got it back. The governments victims fund has never replied to my requests for compensation. I had to continue paying my ZUS even though I was unable to work because I hadn’t paid in enough. I am already 42years old so I don’t think I’ll manage the proposed 45 years of work to qualify for a pension. And, if I should ever be seriously ill, I would return to the UK for treatment there.
Poland is a great country and I don’t hear many complaints for the Poles here. In fact they are amongst the most patriotic people I have met in 20 years of world travel so I can’t support your comment about them complaining. I also am happy to be here and have no plans to move anywhere else but life here is complex and demanding for Poles and ex-pats alike. you have to learn to go with the flow that’s all.
Finally, please tell you friends in Krakow to publish the details of the web site they used to set up their business. It would be a great help to many others. There is certainly nothing like it in Lodz!
September 11, 2008at 12:02 pm
Sorry you are having so many problems here. I am very sincere about this. Really, living as an ex pat is hard as you are far from home and it might not feel the same for you. Its hard, but hats off to you for doing it. I have lived in Poland for many years and it is easy for me, I feel like home. But many of my friends have trouble feeling at home. My rebuttal is, I have gone to the doctor and hospital many times never a problem, nor any of my friends. No one ever asked for a bribe or anything. If you are covered by medical its your right, I would have called the police. Really. Its in the constitution in fact. Look at the Polish constitution. The law is the law. I would have really raise an issue. I do not know your situation. Sorry to hear about your mugging, Poland has one of the lowest crime rates in Europe, almost none existent. The UK is number 1 for violent crimes and other crimes, this is according to “the guardian”, a UK newspaper. Many Brits are coming to Poland for dental and cosmetic work etc. That 45 years of work is just not true. Show me the law. Like in the UK there are different levels of social security based on years of work and age of retirement. But that 45 years is not true. I will look up the internet site where you can set up a business online. 19% is cheap for tax rates (Wiki), and when Poland gets the Euro in 2011 (Forbes) they are trying to pass a more universal flat tax. UK has a 21 to 28 % on corporate tax, compared to Polish 19%. Slovakia has a 19% for everything which I think is great also another great place to start a business. The ZUS amounts you quote are in z?oty, z?otys are z?ot. nothing, 50 gbp 100 gbp. Low taxes, very safe and legal society, low wages (you can hire someone for a 1 time contract for 19% tax, no zus), highly educated population, in fact all of Europe seeks the ‘Polish worker’. Poland is a great place to have a business. I owe you that internet site where you can set up a business online in Poland.
September 11, 2008at 12:39 pm
No sarcasm intended, What you do you think is the best country to start a business? I am open and will to change my opinion and post.
September 16, 2008at 2:15 pm
One thing you have to keep in mind. The biggest cost of doing business in any country is labor. Cost of labor, not translation of documents or filling out paperwork. Its really the cost of labor/value of labor. Lets say we are comparing apples to apples and say a UK worker works as hard as a Polish worker. Well wages are 800% higher in the UK than Poland so I think there is no way you can make an argument that starting a business in Canada, UK, or Denmark or France for example can compare to Poland. That is why are so many firms from large US banks to google to pharmaceuticals starting a business in Poland and pulling up roots from the west? Hands down even with some paperwork, that you pay someone to do, Poland is the best country to start a business.