Cutting Incorporation Bureaucracy
You would think that it would be easier to start a business in the United States than elsewhere in the world. In fact, the U.S. ranks eighth out of 183 nations in terms of ease of registering a new company, according to the World Bank, trailing New Zealand, Australia, and Singapore. In fact, in top-ranked New Zealand, people can register a business with one filing and be legal and legit in a day; in the U.S., it takes about six steps and six days.
Sure, it could be worse. It takes 37 days to register a business in China and 120 days in Brazil. But the U.S. needs to do a lot better. A 2009 paper by the World Bank looking at new-business registrations in 115 nations from 2000 to 2009 showed cheaper, more efficient new-business procedures were linked to higher levels of entrepreneurial activity. Fortunately, some U.S. states have figured this out. In Hawaii, for example, entrepreneurs can go online and be walked through the entire new-business registration process, including filings with the state's tax and labor departments. Every state needs to have a similarly speedy process.
Bottom Line The U.S. needs to make it easier for founders to register their start-ups.