The best cities to launch a startup business revealed in new report
The world’s most entrepreneur-friendly cities have been revealed in a new report by the personal finance experts at money.co.uk.
- Copenhagen has been named the best city in the world for entrepreneurs looking to launch a startup
- Aarhus in Denmark is named the second best startup city, followed by the capital of the Czech Republic, Prague
- The UK emerges as the cheapest nation for registering a business, while Denmark tops the list for Employer Social Security Rates and Ireland is named the best location for low corporate tax
- Aarhus, Stockholm and Montreal offer the cheapest coworking spaces per desk, and Cork, Prague and Espoo boast the most coffee shops per resident
- The full Startup Cities Report can be found here: https://www.money.co.uk/business-loans/startup-cities
The Startup Cities report analysed the following eight factors to reveals which cities are the most appealing and affordable for setting up a business:
- Business registration fees
- Corporate tax rates
- Employer social security rates
- Number of coffee shops per resident
- Average broadband download speed (Mbps)
- The cost of renting one desk in a co-working space
- Percentage of students
- The City’s highest university ranking on the ‘Times Higher Education World University Ranking 2022’
Using a weighted ranking system, the study assigned a score to each country out of 100, to reveal the 10 cities emerging as the best for startups:
|Cities||Startup Cities Score / 100|
|3||Prague, Czech Republic||68.7|
|5||Manchester, United Kingdom||64.1|
|6||London, United Kingdom||62.4|
|10||Brno, Czech Republic||59.1|
Where is the cheapest place to launch a startup?
The United Kingdom ($16.40), South Korea ($43.86) and Ireland ($82.14) boast the lowest business registration costs, while entrepreneurs in Ireland (12.5%), Switzerland (14.93%) and Singapore (17%) benefit from the lowest corporate tax rates.
Denmark paves the way regarding social security rates, at 0%; with Switzerland (6.4%) and Israel (7.6%) following closely behind.
Which cities offer the most affordable co-working spaces to launch a business from?
Shared office spaces – particularly for startups – offer a much needed environment for creativity, allowing entrepreneurs to focus on making the most of their hired talent and growth.
Of the locations analysed, the most affordable cities to rent a desk per day are Aarhus ($5.83), Stockholm ($6.00) and Montreal ($10.00). At the other end of the price scale, the cities where coworking spaces charge the highest are Singapore ($52.00), Zurich ($39.00), and New York ($35.00).
Which cities offer the best infrastructure and lifestyle for startups?
Alongside finances, money.co.uk analysed the average broadband download speeds (Mbps) and the number of cafes per resident to find where in the world is most accommodating for new, agile businesses.
Singapore (256.03 Mbps), Prague (145.3 Mbps) and Bergen (120.1 Mbps) emerged as the locations with the fastest download speeds for time-strapped entrepreneurs.
While those setting up in Cork, Prague or Espoo are the least likely to have to wait too long in overcrowded queues for a caffeine fix, due to these cities boasting the highest number of coffee shops per resident.
Where in the world are entrepreneurs most likely to find emerging talent?
To determine the cities where startups can find emerging talent to assist in business growth, cities were ranked on the percentage of residents that are students.
Krakow (22.1%), Brno (16.37%) and Graz (15.81%) were revealed to be the most student-dense destinations analysed.
Population aside, each city’s top performing establishment and how high it features on the 2022 Times Higher Education World University rankings were also considered.
New York City ranks 11th, Zurich comes in 15th and London and Toronto place joint 18th as the cities where entrepreneurs are most likely to find the smartest and most qualified employees to hire.
Of the locations researched for the report, the 10 cities that showed to be the least accommodating for startups based on the criteria analysed were:
|Cities||Total Score / 100|
|5||Tel Aviv, Israel||40.5|
|8||New York City, United States||44.1|
Salman Haqqi, personal finance expert at money.co.uk, offers some guidance to any budding entrepreneurs looking to launch their own business:
“A business loan can be helpful to those without alternative sources of capital to secure their initial funding and start the ball rolling on achieving their entrepreneurial vision. They can also prove invaluable when dealing with temporary cash flow problems, or gaining access to funding for business expansion.
“As with any big financial decision, you will need to consider some key points before determining whether a business loan is the right option for you. Researching the different types of loans, such as unsecured, secured and peer-to-peer, will help you understand which one best suits your needs.
“It’s also important to remember that business loan interest rates are often based on a financial assessment that determines if you and your business are deemed high or low risk. The lender will likely consider factors such as credit rating, the amount you’re borrowing, the length of term you’re asking for, and how profitable the premise of the company is.
“Business loans can have a repayment period from as little as a month to as long as 30 years, so it’s essential to work out how much you can reasonably afford to pay back in monthly instalments. As with all loans, if you choose a longer loan term, your monthly repayments will be less but you’ll pay back much more overall due to the added interest.”