There are a lot of expenses to consider when you’re starting up your own business, whether it’s paying your staff, finding the perfect office space, or even just keeping the lights on.
But how does the cost of setting up a business vary around the world? We’ve studied a range of common business costs to highlight the cheapest and most expensive places to run your own company.
Cheapest for average salaries:
The city with the lowest average salary that we looked at was Mexico City, where the average person is paid around Mex$362,000, which works out at just over £13,000.
Cheapest for average office costs:
Your workspace is one of the most important initial costs to bear in mind when setting up a business, and the market for office spaces varies wildly, from just over £15 per square foot in Palma de Mallorca, up to as much as £159 per square foot in New York.
Cheapest for electricity:
While it’s generally known as being one of the more expensive cities to live and work in, the cost of electricity actually works out the cheapest in Seoul, at just 6p per kWh.
Cheapest for internet:
A strong and affordable broadband connection is vital to any modern business, with Warsaw working out as the cheapest place for this essential utility, at £138.24 per year.
Cheapest for Corporate Tax:
Tax systems are more difficult to compare around the world, with countries often charging other fees on top of basic business taxes. However, the city with the lowest tax rate that we looked at was Budapest, where businesses pay at a rate of just 9%.
We began with a list of key cities in OECD countries, giving each a normalised score out of 100 on the following five factors, before taking an average overall score across all five factors.
Average Salary
According to PayScale.
Average Office Cost
The average prime office occupancy cost per square foot per annum, according to CBRE’s 2019 Global Prime Office Occupancy Costs.
Electricity Price
Average electricity price for businesses per kWh according to GlobalPetrolPrices.com.
Annual Internet Cost
The average annual cost of internet (60 Mbps or more, unlimited data, cable ADSL), according to Numbeo (monthly estimate multiplied by 12).
Corporate Tax Rate
The corporate tax rate according to the Tax Foundation (US cities were calculated based on state-level taxes too, also from the Tax Foundation).
