Here Are the 3 Best Countries to Start a Business In. The U.S. Isn't One of Them

Starting a business is one of the most thrilling and rewarding experiences. It's the dream of many to break free from the 9-to-5 grind and improve their personal finances by becoming their own boss, but starting a business is challenging.

RELATED: Best Banks for Small Business

One of the biggest obstacles is determining the best country to base your operations. While the United States used to be the go-to country for entrepreneurs, for the past several years, it has not reached the top three best countries to start a business in.

The last time the U.S. was in the top three was in 2019 when it took the third spot. Since then, it dropped to No. 10 for three consecutive years until climbing up to No. 9 in 2023. So, which countries currently dominate the global business landscape?

Rankings based on four competitiveness factors

The International Institute for Management Development (IMD) evaluates countries using four criteria across various sub-factors:

1. Economic performance
2. Government efficiency
3. Business efficiency
4. Infrastructure.

Under economic performance, IMD considers factors such as the domestic economy, international trade, international investment, employment, and prices.

Government efficiency is assessed based on public finance, tax policy, institutional framework, business legislation, and societal framework.

Business efficiency is determined by factors such as productivity and efficiency, the labor market, finance, management practices, and attitudes and values.

Lastly, infrastructure is evaluated based on basic infrastructure, technological infrastructure, scientific infrastructure, health and environment, and education.

With all that in mind, here are the three most competitive countries when running a business, according to the 2023 World Competitiveness Ranking.

1. Denmark

Denmark maintains its top position in global competitiveness due to its consistent success in all four measured factors. It excels in business efficiency, ranking first, and infrastructure, ranking second.

Plus, Denmark has shown slight improvement in government efficiency, moving up from sixth to fifth place.

2. Ireland

Ireland climbs five positions to secure second place in the rankings thanks to its strong economic growth, moving from seventh to first. This impressive achievement can be credited to several factors, such as increased foreign investment and a thriving tech industry.

What's more, Ireland demonstrates notable progress in government and business efficiency, rising from 11th to third in both areas.

3. Switzerland

Switzerland is a global leader in competitiveness, retaining third place due to its impressive performance across all measured factors. The country excels in government efficiency and infrastructure, taking the top spot in these areas.

While business efficiency rankings have declined slightly, Switzerland still ranks highly in seventh place. Most notably, Switzerland has made significant improvements in economic performance, rising from 30th to 18th place.

For 2023, European countries have dominated the business competitive landscape, with five economies in the top 10. The U.S. dropped from third in 2019 to ninth in 2023 due to its decline in infrastructure and government business efficiency.

Best way to start a business

Regardless of what country you're in, starting a business can be exciting and daunting at the same time. Many aspiring entrepreneurs may wonder what the best way to start a business is.

The key to a successful business always begins with a well-thought-out business plan. It's important to research your target market and develop a unique value proposition that sets you apart from the competition. Finding the right legal structure and obtaining the necessary permits and licenses is also vital.

In addition, you should have a solid financial plan for sustaining your business operations. Finally, reaching out to potential customers, building your brand through targeted marketing efforts, and consistently delivering high-quality products or services can help you establish your business and propel it to success. By following these steps, you can give your business the best chance of success and minimize the risks involved.

Starting a business is not an easy task, but choosing the right country to start your business in can make it easier. Based on the latest report, Denmark, Ireland, and Switzerland are the three best countries to start a small business in right now. All three countries excel in the categories of business efficiency, government efficiency, and infrastructure metrics.