India is the 3rd most challenging places to launch startup. Really?

Can this be believed that India, which has the third-largest startup ecosystem worldwide and is home to 115 unicorns with a cumulative valuation of over USD 350 billion, has been ranked among the most challenging countries to launch a startup. Yes, AI website Business Name Generator’s (BNG) recent study has placed India as the third most challenging country for launching a start-up.

Among other criteria, the AI-powered website analysed business tax rates, GDP growth, and the cost of startup procedures to determine the optimal location to start a business. 

What is BNG Study?

Business Name Generator is a Global Startup Index by Adaline Lefe which has analyzed 50 countries considering business tax rates, economic GDP growth, and the cost of startup procedures to determine the optimal location for a startup. 

The study also looks at each country’s happiness score, the cost of living, and quality of life to find out where is home to the most content employees, helping drive productivity and growth. 

Why BNG study?

According to BNG, the study is to help businesses select the ideal site for their business.

Why is India the 3rd Most Challenging country for launching startup?

The BNG study reveals that despite the availability of low-cost labour, India ranks lowest in terms of happiness (3.8) and quality of life (118). This could greatly impact job satisfaction, productivity, and overall well-being in the workplace. Additionally, the country’s 30% business tax rate may offset some of the savings gained from affordable labour costs.

Who are the top rankers for launching startups?

 If we go by the BNG study, its Europe which bags all the credit for being home to top ten countries for launching startups. The Czech Republic is at the top spot followed by Finland, Sweden, Estonia and Slovakia to make up the top five in that order.

Nordic countries frequently rank highly in surveys that prioritize happiness and quality of life. Also, Europe is luring tech talent with its remote working and digital nomad visa policies.

According to the study, the Czech Republic is the greatest nation to launch a startup. Despite having the lowest quality of life rating among the top ten, it is one of the least expensive countries to start a business because it only costs 1.1% of GNI (gross national income) per capita. The cost of labour is relatively affordable, with monthly salaries of around USD 1,800. Companies can benefit from a very low corporate tax rate of just 19%.

Where does United States position for Startups in the BNG report?

Surprisingly, America, which is home to Silicon Valley, is ranked outside of the top 10 by BNG and placed as the 17th best country to launch a startup. In 2022, the capitalist market economy experienced a low GDP economic growth rate of 1.6% – the third lowest overall. Though business tax rates differ by state, on average, startups can expect to pay 25.8% on capital generated. 

Despite this, the US remains a popular destination for entrepreneurs due to its large market, well-developed infrastructure, and supportive legal system for protecting intellectual property.

Where does Asia stand in the report?

The analysis also showed that, with one exception, all five of the nations where it is hardest to create a successful business is Asia. The Philippines has the unfortunate distinction of being last on the list, followed by Egypt, India, South Korea, and Vietnam, in that order.

Which are the best countries to work as an employee?

Working for a startup can be rewarding but also demanding, therefore, it’s crucial for entrepreneurs to prioritize the happiness, health, and well-being of their employees. 

The study says Netherland offers the best quality of life for startup employees followed closely by Luxembourg and Denmark respectively.

Finland scores 7.84 out of 10 for the happiness of its people, which is higher than any other country in the world.

Egypt’s cost of living is the lowest in the world (excluding rent) which means after an average salary of $1,200 per month, workers will have $927.40 left as gross disposable income. 

India and Argentina follow as the two countries with the next most affordable cost of living, however, their average monthly salary means workers will have less than 300 USD disposable income. 

To trust or not to trust?

In the past decade, the Indian startup ecosystem has experienced exponential growth, with a significant increase in the number of startups.It is hard to believe that India is ranked amongst most challenging destinations for startups as the Boston Consulting Group Survey recently showed that India had 100X growth in number of startups launched from 2005 to 2022- highest rate in the world.

Not only this, according to recent Nasscom-Zinnov research, India will have 200 unicorns by 2025.

In fact, according to a 2022 World Economic Forum report on the top nations for entrepreneurs, India came in at number 17 out of 50.

According to Invest India, with over 77,000 firms, India has the third-largest startup ecosystem worldwide. India experienced a 15-fold growth in startup funding, a 9-fold increase in investors, and a 7-fold increase in incubators between 2015 and 2022. A total of 107 unicorns worth USD 340.79 billion are also found in India.