Brazil Ranked 66th Among Best Countries to Open an Online Business

RIO DE JANEIRO, BRAZIL – The list was compiled by Best Accounting Software, an organization that evaluates systems for small-sized companies, and used criteria such as connectivity, internet speed, proportional number of social media users, banked people, and time needed to open a company, among others.

Over 200 countries were assessed, but only 99 are listed due to unavailability of data with respect to some nations. Nonetheless, Brazil fell behind countries where internet access is controlled, such as China or Saudi Arabia, or much smaller economies, such as Uruguay and Vietnam.

All of the ten best-ranked are developed countries, with Denmark leading the list, followed by Switzerland, the Netherlands and the United States. But none of them stand out in every aspect. The United Arab Emirates, for instance, is the best in internet speed for mobile devices. New Zealand, on the other hand, is the most outstanding in terms of a good environment to launch a startup.

“There isn’t a single challenge that affects most countries. For instance, those with a higher gross national income tend to have better connectivity and practices to start a business, but entrepreneurs are often faced with high corporate taxes,” explains researcher Rebecca Moody, who led the survey.

Locaweb’s marketing director Victor Popper points out the difference in the importance of each point depending on the service provided.

“If you want to be a small entrepreneur, the lack of talent for hire should not prevent you from opening a business, provided you are the talent. You can operate locally to escape the logistic obstacles, for instance”, he says. “Now, if you want to grow, you have a set of factors that will hinder your ability to scale-up the business, among them the tax burden to hire professionals, and the very lack of professionals, which will ultimately push the market.”

Moody also agrees with the difference. “Businesses that still depend on physical spaces face even greater challenges. For instance, an e-commerce that depends on a warehouse to stock products still needs to deal with rent, electricity bills, etc.”

In all, 20 different categories were analyzed. In addition to those already mentioned, the researchers looked at very specific aspects, such as the number of co-workings available in a country.

To assess them, researchers used public documents from organizations such as the World Bank and the Tax Foundation. Each criterion then was scored between 0 and 100, and each country was scored according to its position in relation to the others. Denmark, the best ranked, has 78.46 points. Haiti, at the bottom of the ranking, has 14.93.

Moody considers that Brazil’s poor position, below the average of countries in the second half of the ranking, is mainly due to the population’s poor internet access and infrastructure. However, the researcher points out the national potential to foster the emergence of startups.

Popper considers that Brazil’s position in the ranking is not a cause for concern, since it is not a case where “everything is missing”.

“Brazil has a huge universe of natural-born entrepreneurs. We are survivors, people who operate their businesses as true entrepreneurs, but without the required knowledge for digital transformation,” he says.

He stresses the significance of training as an investment. “We have to act at the base. We lack professionals and there are plenty of opportunities for the creative and surviving Brazilians to act.”

Danilo Castro, CEO of MondoDX, a startup that brings part of the physical store experience to the online world by using virtual reality, also remarks on the Brazilian position.

“I didn’t see any incoherence in the research, the Brazilian indexes are actually good, it is very easy to build a business in Brazil, for instance, but the rate of the population with no internet access will ultimately lower the average”, he says. “It is necessary to look to each criterion and see if your product is adherent.”

Without mentioning the pandemic, deemed responsible for the demise of many businesses in 2020, as well as the boost of others, the survey refers to the growth of the sector last year and highlights 2021 as the year to set up an online business.

Global online sales are expected to reach US$6.5 trillion by 2023, representing 22% of retail. Currently, it barely reaches 15%.

“What we can expect in the long-term regarding the true impact of the pandemic is uncertain and is still to be felt, since we are still halfway through it all. But having an online presence has become a priority for many businesses whose physical stores have been impacted by the lockdown,” adds Moody.