Prague, Czech Republic – Although few people know it, the Czech Republic, thanks to a robust economy, a business-friendly environment and a bustling entrepreneurial scene, ranks among the top 5 best country in Europe for startups.
According to a study conducted by NimbleFins, that identifies the top 12 out of 50 countries in Europe for start-ups, the Czech Republic ranks as the 6th best country in Europe for start-ups. The findings are based on data from the World Bank, the OECD, the Word Economic Forum or UNESCO, as well as previous studies by Deloitte or PWC.
Several criteria were taken into account, gathered in four categories: the country’s economic health, the cost of doing business, the business environment and labor force quality, to give an overall score to each country (the lower the score, the better).
According to the study, Germany ranks as the best country in Europe for start-ups, with a composite score of 5.5: the country mixes a favorable business climate, good access to venture capital, relatively low corporate tax rates and a well-educated workforce. Germany is followed by the United Kingdom (score of 5.9), Ireland (score of 6.2), mostly due to the country’s low corporate tax rates, as well as Switzerland in the 4th place while Estonia completes the top 5.
With a robust composite score of 6.6, the Czech Republic ranks as the 6th best country for startups in Europe.
“The Czech Republic ranked particularly well in the Cost of Doing Business category, driven by lower costs of living and expected salaries – plus the 19% corporate tax rate is one of the most attractive in Europe. The Czech Republic was the weakest of the top 12 in terms of Business Climate, weighed down by less trust in the justice system, more difficulty starting a business and a market already dominated by fewer players, as judged by OECD and World Bank data”, NimbleFins founder and CEO Erin Yurday told Kafkadesk.
It ranks first is the “cost of doing business” category, but last (of the top 12) in the business climate field, with the study identifying a particularly low trust in the justice system among the population and difficulties to start a business.
The Czech Republic also ranks last of the top 12 in the labor force quality: despite having the highest rate of adults with at least an upper secondary education (90.2%), it reports the lowest rate of adults with tertiary education (only 20.2%, compared to more than 30% in most other countries in the ranking).
Finally, the Czech Republic ranks a strong 7th in the “economic health” category, thanks to the lowest unemployment rate in Europe (2.9%) and a robust GDP growth rate of 4.3% at the time. Current indicators however point to an imminent slowdown of the Czech economy, and a slight increase in the Czech unemployment rate – whereas growth of neighboring Slovakia, for instance, is expected to skyrocket in the next few years.
The other countries making up the top 12 best European destinations for start-ups are Sweden, Norway, Finland, the Netherlands, Austria and Denmark.