Cities like London, New York and Hong Kong are synonymous with business, but these locations are also extremely competitive and expensive. Here are a three entrepreneurial hubs to consider when growing your business
Business knows no boundaries. Choosing where to do business is just as important as deciding what kind of business to do. Simply starting your business in the city or country that you happened to be born in is rarely the best business move.
It is often much cheaper to run a business abroad than it is in the UK. Resources, taxes, rental costs and wages, all of these expenses can be reduced considerably by setting up in a business-friendly city in a different part of the world. We’ve examined three low-cost cities that small business owners need to know about:
Perks: The English tabloids tend to portray anywhere east of Essex in a negative light, but Poland is full of skilled workers that are supported by a stable infrastructure that is comparable to what we have in the UK. As Poland is a member of the EU, Warsaw has access to the European Single Market. This means that moving an established business to Warsaw becomes easier as you don’t have so much red tape to deal with. Poland’s proximity to home means that you can often fly from Warsaw to London quicker than you can drive from London to Newcastle!
In Warsaw, you’ll find an abundance of labour at a low price for Europe. In particular, you’ll have access to skilled web developers coming out of the University of Warsaw. The city is also seeing a massive rise in small businesses and startups, with a growing international community attracting more and more business to the region.
Cost: Tax in Poland is similar to what we see in the UK, in fact, VAT is a hefty 23 per cent. However, if look behind these basic numbers, you’ll find high savings in other areas. City centre property rental is roughly £20 per square foot per month, compared to £50 for the same space in central London. Outside of business property, you’ll see rate reductions of roughly 50 per cent or higher on everything from personal property rental, to basic services like electricity, gas and water.
Kuala Lumpur, Malaysia
Perks: The Malaysian economy is booming, and much of the region’s new wealth is found in Kuala Lumpur. This means more opportunities for investments and backers and a growing community of businesses teeming with potential partners or resource providers.
Given its location, Kuala Lumpur is also perfectly suited for international business, within easy reach of China, India, Japan, Korea, Australia and Singapore. What’s more, the country has strong ties to the UK and the Queen’s English, reducing the language barrier substantially.
Malaysia recently introduced the GSD (goods and service tax) which is similar to VAT. Coming in at 6 per cent, however, it is significantly cheaper than both Poland and the UK. Conversely, corporation tax is high, standing at 25 per cent. This high corporation tax is offset by the cost of doing business and living in the country, as office property in Kuala Lumpur comes in at a mere £2 per square foot per month. The other business costs in Malaysia are also well below anything that you might find in Europe.
Perks: Bangalore is famously known as the Silicon Valley of India due to its abundance of tech and software companies; there’s more here than anywhere else in the world. This is great for networking and collaboration, as well as local access to the resources needed by any tech startup. The high number of software companies in Bangalore also brings experts and graduates to the region, although competition can push up wages.
You definitely won’t struggle for employees in the engineering sector either, and if it needs building or designing, Bangalore has the personnel for you. The city is home to twenty-one engineering universities, with plenty of hungry graduates looking to bring their skills into the working world.
For all startup brands looking at the fashion market, you’ll find Bangalore to be the fashion capital of Asia, with influence and community comparable to Paris. It is also worth noting that with a population of over eleven million people, Bangalore dwarfs both London and New York.
Cost: With VAT at 5 per cent and corporation tax at a staggering 35 per cent, you might wonder why we would include Bangalore at on a low cost cities list. Well, when the cost of business upkeep over the month is 2p per square foot of property, the potential for business savings are enormous. Residential properties are also a steal, being around ten times cheaper than London on average.
Heather Darby works at Momentous Relocation.