Qatar Gulf News presents its exclusive analysis of the world’s most attractive countries for business according to 2013-14 data.
Hong Kong again tops the list, thanks in part to the low cost of starting a business there. Canada jumped from sixth place to second largely because of the receptivity of its consumers, measured by the size of its middle class, household consumption and GDP per capita. The US fell from second to third place, as the cost of setting up a business there increased considerably relative to other countries.
Brazil jumped from 61st place to 38th; Russia went from 56th to 44rd place; and India climbed from the 54th position last year to the 48th slot this year. But China continued to slide, dropping from the 19th position in the ranking’s first year to a rank of 28 this year, its score on less-tangible costs the 46th lowest among the 50 countries.
To rank the 50 best countries, QGN analyzed 157 countries on six broad criteria. They were: the degree of economic integration; the cost of setting up a business; the cost of labor and materials; the cost of moving goods; less tangible costs like inflation and the amount of corruption; and the health of its consumer base.
The full methodology appears as below.
Qatar Gulf News identified the best countries for business based on their overall business, commerce and trade climate. Countries and sovereigns were ranked on the following six weighted factors for a combined score from zero to 100:
1. Degree of economic integration (weighting of 10%)
Includes membership in the World Trade Organization, most-favored nation tariffs, co-dependence with the global market, market concentration and reach of global market research.
2. Cost of setting up a business (20%)
Includes the costs, steps and time required, as well as financing a business and foreign direct investment.
3. Cost of labor & material (20%)
Includes cost of labor (productivity, compensation, health expenditures and size of labor force) and cost of material (natural resource rate of depletion and natural resource rent).
4. Cost of moving goods (20%)
Includes import and export efficiencies, transportation efficiency, logistics performance, liner shipping connectivity and quality of port infrastructure.
5. Less-tangible costs (20%)
Includes Corruption Perception Index, International Property Rights Index, inflation, various taxation concerns and accounting adaptability.
6. Readiness of the local consumer base (10%)
Includes size of middle class, household consumption, tariff on imports and GDP per capita.
Scores for each factor were calculated using a percentage of the maximum for index-based and qualitative criteria and a percentage rank for the quantitative criteria. Of the 214 countries and sovereigns evaluated, 157 had sufficient data to be ranked.
Source: QATAR Gulf News – Research & Analysis