The global pandemic has also triggered a surge in the number of businesses being incorporated, with business formation applications in the USA up 82% in the three months to September 2021, compared with the same period last year.
But which cities around the world are going to offer the most accommodating and affordable environments for a new business to thrive and grow?
From researching the wealthiest cities and cheapest coworking spaces to looking at the destinations with the highest percentage of student populations and coffee shop locations; our loan experts reveal the best cities to launch a startup business in their new report.
If you’re in the process of starting your own business and are considering taking out a secured or unsecured loan to finance company growth or cover running costs, you can view our best business loans to suit your needs.
Copenhagen ranks as the best overall location for setting up a startup business, with a total score of 77.7/100 based on the key factors analysed.
The Danish capital is not only home to historical beauty and a picturesque harbour for those much-needed moments of calm and serenity any new business owner craves, it also ticks lots of boxes when it comes to new business processes. The city’s excellent transport links make travelling to one of its 166 co-working spaces effortless, with these affordable shared spaces rented out for as little as $110.00 per day for 10 people.
A strong work-life balance is highly regarded in Copenhagen. The city boasts an abundance of modern and historic landmarks, and a variety of restaurants serving nordic-inspired cuisine to visit after a long day in the office.
Aarhus, located a three hour train ride from Copenhagen, follows closely behind as the second best location for entrepreneurs to lay down the roots of their startup, scoring 73.7/100 on the leaderboard.
Co-working office spaces in Aarhus are available at just $58.30 per day for 10 members of staff, with the city also home to a large student population who may be looking for work at a fast-paced startup upon graduation.
Prague emerges in third place, generating a total score of 68.7 out of 100.
Amongst the stunning baroque buildings that overlook the Vltava river, the scenic Czech city also boasts all of the makings for a great destination for a business launch, including the second fastest average download speed of all cities analysed.
|Cities||Corporate tax rate score||Registration fee score||Coffee shops per person score||Cheapest office for one desk score||Average download speed (Mbps)||Student population score||World university ranking score||Social security rates score||Total score / 100|
|Prague, Czech Republic||0.861||0.737||0.974||0.974||0.974||0.816||0.079||0.079||68.7|
|Manchester, United Kingdom||0.861||1||0.158||0.763||0.737||0.184||0.789||0.632||64.1|
|London, United Kingdom||0.861||1||0.263||0.158||0.895||0.237||0.947||0.632||62.4|
|Brno, Czech Republic||0.861||0.737||0.842||0.553||0.684||0.974||0||0.079||59.1|
|Singapore City, Singapore||0.889||0.684||0.526||0||1||0.053||0.868||0.526||56.8|
|Seoul, South Korea||0.389||0.947||0.342||0.868||0.053||0.026||0.763||0.737||51.6|
|Los Angeles, United States||0.083||0.5||0.5||0.289||0.474||0.368||0.895||0.842||49.4|
|Busan, South Korea||0.389||0.947||0.053||0.342||0.789||0.105||0.421||0.737||47.3|
|New York City, United States||0.083||0.5||0.395||0.053||0||0.658||1||0.842||44.1|
|Tel Aviv, Israel||0.472||0.395||0.026||0.711||0.421||0||0.263||0.895||39.8|
If you’re starting up a new business and looking to keep your startup costs low, then it’s wise to choose a city in countries that will charge you the least amount of money when it comes to registration fees, corporate tax, and social security rates.
The low business registration fees in the United Kingdom make the booming cities of London and Manchester extremely appealing areas for entrepreneurs looking to get started. While London has many cosmopolitan benefits and networking opportunities, the high rate of existing Manchester startups and continual growth of the Northern city may well take the edge over the capital.
South Korea follows as the second most affordable country to set up a new business, with the business registration fees costing 52,000 KRW ($43.86). Those setting up in this large metropolis will also be neighbours with globally successful businesses such as Samsung, LG and Hyundai.
Cities analysed with the pricier expensive business registration fees emerged as Milan ($4794.41), Rome ($4518.17) and Antwerp in Belgium ($2,485.21).
When it comes to the cities offering the lowest corporate tax rates to businesses, Ireland emerges as the most appealing location for startups, with owners who decide to launch in the likes of Dublin or Cork required to pay just 12.5%. This is followed closely by Switzerland (14.93%), Singapore (17%) and the Czech Republic (19%).
Of the countries analysed for the report, the most expensive territories for embarking on a startup journey when it comes to corporate tax rates were revealed as Germany (30%), the United States (27%), France (26.5%) and Canada (26.5%).
Denmark, a country whose social security system is financed primarily through ordinary tax revenue, comes out on top as the country with the lowest social security rates (0%). Switzerland once again ranks highly, with average social security rates of 6.4%; followed by Israel (7.6%) and the USA (7.65%).
It’s common knowledge that setting up a business from scratch takes endless hours of work, dedication and perseverance, with all rules regarding a traditional 9-5 work-life balance often being disregarded as you establish yourself in your chosen field.
It’s therefore only right that the location in which you decide to lay the foundations of your venture has an abundance of coffee shops and cafes. Not only will these offer a much needed caffeine boost during those 18 hour workdays, they will also provide a place to escape to and even work from when the four walls of your home office start making you feel a little claustrophobic.
The Irish city of Cork has the highest number of cafes per resident, at 0.000892 coffee shops per person, to cater to you and your employees.
Prague in the Czech Republic is the next best city to provide startup employees with a caffeine fix, with 0.000785 coffee shops per person.
Conversely, the cities you’re perhaps less likely to find a coffee shop without long lines and occupied tables emerged as Marseille in France, Tel Aviv in Israel, and Busan in South Korea.
Despite the majority of startups starting life from a spare bedroom or home office - particularly over the past year or so - there comes a time when founders look to establish their businesses by renting out an initial working environment for themselves and their early hires.
Co-working spaces are beneficial for a variety of reasons, not only are they ideally suited to startups with the potential to witness fast growth, they also make the most sense financially, as the world continues to adapt to a more flexible, hybrid way of working. So, which of the cities analysed in the report offers entrepreneurs the cheapest co-working spaces?
|City||Population||Number of co-working spaces||Cheapest office space to rent one desk||Cheapest office space to rent five desks||Cheapest office space to rent ten desks|
|Seoul, South Korea||9,967,677||178||$12.00||$60.00||$120.00|
|Manchester, United Kingdom||2,750,120||104||$13.00||$65.00||$130.00|
|Tel Aviv, Israel||4,263,745||156||$15.00||$75.00||$150.00|
|Prague, Czech Republic||1,312,199||108||$15.00||$75.00||$150.00|
|Brno, Czech Republic||378,754||21||$18.00||$90.00||$180.00|
|Busan, South Korea||3,465,946||15||$22.00||$110.00||$220.00|
|Los Angeles, United States||3,983,540||305||$25.00||$125.00||$250.00|
|London, United Kingdom||9,425,622||284||$27.00||$135.00||$270.00|
|New York City, United States||8,230,290||262||$35.00||$175.00||$350.00|
|Singapore City, Singapore||5,991,801||136||$52.00||$260.00||$520.00|
The historically-rich city of Aarhus in Denmark is the cheapest place to find a coworking space for your business. Choose from 59 co-working spaces and a variety of price options, costing as little as $5.83 a day for a desk.
Stockholm in Sweden, already established as a pioneer for flexible working practices, is the next most affordable city to set up your business with co-working spaces costing $60.00 a day for 10 desks. With 163 co-working spaces on offer throughout the city, you might even be lucky enough to snap one up with a view of the city’s iconic city hall.
Unsurprisingly, the most expensive cities to rent co-working spaces include the business and finance hubs of Singapore City, where entrepreneurs could pay as much as $520.00 a day for 10 desks, as well as Geneva ($390.00), and New York City ($350.00).
It’s a given that when choosing the right location for your startup business, access to reliable and fast broadband speeds is an absolute necessity.
Staying as connected as possible to your stake-holders, employees and potential clients through email, video chats and instant messaging platforms are the key to a smoothly run startup, but which cities take the lead with the fastest broadband speeds?
The digitally-focussed Singapore City takes first place as the city with the fastest broadband, with an average download speed of 256.03 (mbps). The city renowned for its business destination status is fully equipped to accommodate your startup’s internet requirements.
Prague in the Czech Republic secures itself in second place with its fast 145.3 (mbps) average download speed that provides a quick and smooth running internet connection for businesses operating in the city.
The cities with the slowest broadband speed and therefore posing the most potential issues in terms of connectivity are New York City (24.2 mbps), Stockholm (26.1 mbps) and Seoul (26.5 mbps).
If you’re searching for staff to join your startup, it’s worthwhile considering that students are much more likely to accept a job offer in a new business than those with more established careers that have mortgages, monetary commitments, and financial dependents.
So, which cities are likely to have the largest amount of graduate talent from the highest ranking universities that could fit well into the company culture you’re looking to create?
The cultural city of Krakow in Poland takes the title of the city with the highest approximate percentage of students as residents (22%). The destination is not only a popular hot spot for tourists looking for a fun city break, but clearly a great place for startups looking to recruit talent straight out of university.
Brno in the Czech Republic is another city with a large student population (16.7%). The city is the second largest city in the Czech Republic and a growing business hub with advanced employment opportunities. It also has a great geographic location in Central Europe, perfect for if your business expands and you need to make the most of its great transport options.
The cities with the smallest student populations, and therefore technically offering startups fewer recruitment opportunities are Tel Aviv in Israel (1.17%), Seoul (1.19%), and Singapore City (1.76%).
As a renowned Ivy League school, Columbia University in New York City emerged as the highest ranking of the cities polled, making it to 11th place on The Times Higher Education’s World University Ranking 2022.
Closely following behind was the Swiss Federal Institute of Technology Zürich (ETH Zurich), ranking 15th in the prestigious table.
Alternatively, the universities receiving the lowest scores on the World University Ranking 2022, and statistically the less popular choices to hire future employees include; Masaryk University Brno in the Czech Republic (801-1000th place) and the University of Warsaw in Poland (601-800th place).
|Cities||Highest ranking university in city||World university ranking|
|New York City, United States||Columbia University||11th|
|Zurich, Switzerland||Swiss Federal Institute of Technology||15th|
|London, United Kingdom||University College London||18th|
|Toronto, Canada||University of Toronto||18th|
|Los Angeles, United States||University of California, Los Angeles (UCLA)||20th|
|Singapore City, Singapore||National University of Singapore||21st|
|Paris, France||Paris Sciences et Lettres – PSL Research University Paris||40th|
|Montreal, Canada||McGill University||44th|
|Manchester, United Kingdom||The Universty of Manchester||50th|
|Seoul, South Korea||Seoul National University||54th|
|Amsterdam, Netherlands||University of Amsterdam||65th|
|Rotterdam, Netherlands||Erasmus University Rotterdam||72nd|
|Berlin, Germany||The Charité – Universitätsmedizin Berlin||73rd|
|Copenhagen, Denmark||University of Copenhagen||96th|
|Ghent, Belgium||Ghent University||96th|
|Helsinki, Finland||University of Helsinki||101st|
|Aarhus, Denmark||Aarhus University||104th|
|Oslo, Norway||University of Oslo||119th|
|Hamburg, Germany||University of Hamburg||132nd|
|Vienna, Austria||University of Vienna||137th|
|Antwerp, Belgium||University of Antwerp||143rd|
|Dublin, Ireland||Trinity College Dublin||146th|
|Busan, South Korea||Youngsan University||151st|
|Stockholm, Sweden||Stockholm University||176th|
|Gothenburg, Sweden||University of Gothenburg||185th|
|Graz. Austria||Medical University of Graz||196th|
|Geneva, Switzerland||University of Geneva||197th|
|Rome, Italy||University of Rome La Sapienza||197th|
|Bergen, Norway||University of Bergen||201-250th|
|Espoo, Finland||Aalto University||201-250th|
|Tel Aviv, Israel||Tel Aviv University||201-250th|
|Cork, Ireland||University College Cork||251-300th|
|Jerusalem, Israel||The Hebrew University of Jerusalem||301-350th|
|Marseille, France||University of Aix-Marseille||301-350th|
|Milan, Italy||Politecnico di Milano||351-400th|
|Prague, Czech Republic||Charles University||501-600th|
|Krakow, Poland||Jagiellonian University||501-600th|
|Warsaw, Poland||University of Warsaw||601-800th|
|Brno, Czech Republic||Masaryk University||801-1000th|
Unsecured business loans
This type of loan involves your business borrowing money without using any of its assets as security.
Secured business loans
For this type of loan, your business will need to have assets that they can use as security for the lender before you can borrow any money.
Peer to peer loans
A peer to peer loan means that you will borrow money from an individual instead of a bank or organisation, which can be done through a P2P lending platform.
The business loan interest rate you’re offered is based on a financial assessment of your business that determines whether you’re deemed high risk or low risk. This is calculated by looking at:
Your business’s credit rating
The amount and term you’re asking for
The age of the business
How profitable the business is
It’s important to be realistic about the amount of money you need to actually borrow via your business loan. Is the money you require for a business priority?
Work out how long you’re going to need to repay your business loan and how much you can afford to pay in monthly installments. Many business loans can have a short repayment period from as little as a month to longer periods of time like 30 years.
It’s important to consider that if your loan term is longer, your monthly payments will be lower, but you’ll have to pay more in interest overall.
Be clear that the business loan you are signing up for doesn’t have any additional conditions, such as lenders attaching a personal guarantee.
Below, money.co.uk has included the methodology for the campaign.
Seed list of cities - The two most populated cites were taken from this Bloomberg on the most innovative countries in the world
Business registration rates - Using the World Banks 'Doing Business 2020 Report', the cost of incorporating a business in each city analysed was totalled in its own currency, then translated to USD ($) on 21/09/2021
Coffee shops per resident - Using city population figures from https://worldpopulationreview.com/world-cities and using Tripadvisor to search for the number of cafes in each city, money.co.uk were able to determine which destination is home to the most coffee shops/cafes per person to work from for startup owners. Data collected on 21/09/2021
Cheapest co-working spaces - Using city population figures from https://worldpopulationreview.com/world-cities , money.co.uk used Google My Business to search for 'co-working spaces' in each city analysed. They also used www.desksnear.me and other manual research (sites listed below) to determine which city currently has the cheapest co-working office space for 1 worker, 5 workers and 10 workers (in USD $) per day *Data collected and figures converted from countries currency to USD ($) on 17/09/2021
University comparisons of city - Using city population figures from https://worldpopulationreview.com/world-cities , University information from www.unipage.net on the number of Universities/ higher education colleges in each city, and manually researched information on approximate students living in the area* (listed below), the team determined the approximate % of students living in each city, and therefore the most likely places to have graduates looking for roles in startup companies.
Using the 2022 World University Ranking from The Times Higher Education - www.timeshighereducation.com/world-university-rankings - the team also ranked cities based on which has the highest to lowest ranked university on the table *student totals that aren't linked have been calculated by compiling student figures from https://www.unipage.net (Data sourced 16/09/2021)
Corporate tax rates - sourced from https://home.kpmg/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html
Social security rates - sourced from https://home.kpmg/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/social-security-employer-tax-rates-table.html
Salman is our personal finance editor with over 10 years’ experience as a journalist. He has previously written for Finder and regularly provides his expert view on financial and consumer spending issues for local and national press such as The Express, Travel Daily, and The Daily Star.
Salman is our personal finance editor with over 10 years’ experience as a journalist. He has previously written for Finder and regularly provides his expert view on financial and consumer spending issues for local and national press.