What is best country to start an IT business

What is best country to start an IT business

When considering the best country to set up an IT business: check Bahrain, Germany and the US. And of course there is a big potential of expanding IT business in Ukraine even during a war.

IT is a consistently expanding and evolving sector that is worth billions to the global economy, making it a lucrative business to try and attract for many countries. Though places such as the US and China have a traditional reputation as the hubs of the industry, new contenders are emerging when it comes to deciding where is the best country to set up an IT business, as highly skilled workforces and innovation expand around the globe.


Ranked as the third fastest-growing IT start-up location in the Middle East, and making a steady rise up the global IT rankings, Bahrain has become an established hub for the high-tech industry.

Though regional neighbours Saudi Arabia and the UAE are known for burgeoning business opportunities, Bahrain is emerging as a hub for the IT sector.

Boasting a business-friendly environment, its start-up ecosystem includes a range of organisations that can assist with start-up funding, management expertise and advice on how to scale up in the years after starting a company.

With numerous existing fintech companies, seven e-commerce and retail firms, seven accelerators in the sector, and a growing number of shared IT workspaces and collaborations as of the start of 2023, Bahrain is becoming a genuine option when considering what is the best country to set up an IT business.

Companies including US outfit Teamshield, Menaflow and PaySay are just a few IT leaders that have opened operations in Bahrain.

Seeing this kind of investment in the country showcases how it has become firmly established as an IT hub for both start-ups and expansions.

The US

From Silicon Valley to the financial centre of New York City, the US is a global powerhouse when it comes to business and finance.

Though there are other global hubs to consider, when deciding what is the best country to set up an IT business, the US is always a contender.

As well as the home-grown companies, the opportunities for foreign investors, especially those looking to start a new IT business, are far-reaching and fiscally supportive.

Numerous states and cities offer incentives to start-ups, with elements such as low taxes and financial support designed to attract new businesses.

When looking for the best country to set up an IT business, the state and federal tax credits and lower commercial real estate taxes for foreign investors are a genuine draw.

IT investors also value the US as having some of the most advanced technological innovations in the world, something that can enhance their business production and worldwide communication potential.

Add to this the grants, government support, employee and corporate tax breaks, and support when starting up a business, and the US becomes a prime choice for IT investors, entrepreneurs and business start-ups.

With more than 4,000 colleges and universities and some 800,000 foreign students in the US, the workforce is also vast, making the start-up hiring potential significantly propitious.


As the financial powerhouse of Europe, Germany is ideally positioned both financially and geographically. It has the largest national economy in Europe, the fourth-largest by nominal GDP in the world, and the fifth by GDP.

With a large social market economy, a highly skilled labour force, a large capital stock, and high levels of innovation, Germany is always in the conversation when it comes to the best country to set up an IT business.

Alongside motoring, manufacturing, finance and the automotive industry, German has a thriving technology sector. According to reported figures, the industry now has an annual turnover of approximately €178bn, making the IT industry a powerful economic force within the economic landscape.

Forecasts for the sector include sustained growth, with both tax and business support incentives from regional and national governments making the country an attractive option for starting an IT business.

Beyond the business potential, starting up an IT business in Germany offers the benefit of an established industry ecosystem and a potential employee pool of more than 1.3 million skilled workers.

Already the second largest industrial employer in the country, the IT sector is attracting significant foreign investment as the growth forecasts remain strong.

With support from the Digital Hub Initiative, setting up an IT company in Germany offers collaboration and connection options for SMEs and larger companies.

This drive towards technological advancement and innovation includes involvement from scientific and start-up communities at 12 centres of excellence across the nation.


Before Russia began its war of aggression against Ukraine in February, the country’s IT industry had become one of the largest exporters of IT services in Europe, with annual growth of 25-30 per cent. Export revenues accounted for more than four per cent of Ukraine’s GDP.


Exports by Ukraine’s IT industry earned $7.34 billion for the Ukrainian economy in 2022, referring to data from the National Bank of Ukraine.

According to the agency, the industry’s volume of exports export increased by $400 million compared to the pre-war year 2021.

The figure of more than $7 billion from the export of IT services is also a unique one, because of it being the largest indicator in the entire history of the Ukrainian IT industry’s existences.

Such indicators had been expected for the IT export sector, as companies have been successfully implementing measures to support business continuity and creating conditions for the safe work of IT professionals.

As of Jan. 1, 2023, the amount of taxes and fees paid by the IT business to the consolidated budget of Ukraine was UAH 32.2 billion ($880.5 million). This figure is UAH 4.4 billion ($120.3 million) or 16% more than the previous year.

At the same time, the number of self-employed taxpayers providing IT services also increased.

Since the very beginning of the war, Ukraine’s IT firms have demonstrated a key ability to adapt to new realities. Continuity plans were implemented, and teams relocated, either in other parts of Ukraine or sometimes abroad. Around 309,000 people are still employed in IT in Ukraine. The five leading IT companies in Ukraine remain unchanged: EPAM, SoftServe, GlobalLogic, Luxoft and Ciklum.

Ranking TOP-50 largest outsourcing IT companies in Ukraine

As a result of the full-scale invasion, 70.8 per cent of IT companies relocated at least partially; a quarter of them relocated in full.

Around one in six firms relocated abroad, to locations as diverse as Poland, Germany, the US, Portugal, Bulgaria, Czechia, Romania, Moldova, Spain, and Canada. The vast majority (81.5 per cent) plan to return their business to Ukraine once hostilities are over.

From the first days of the War, the IT industry has been actively helping the Ukrainian Armed Forces and the government. In 70 per cent of companies, professionals serve in the Armed Forces of Ukraine, while a separate track is the industry’s support of the strong volunteer movement, which today is represented by the 200,000-strong IT army. Indeed, 95 per cent of companies have at least one IT professional who has joined the cyber army.

Fundraising and volunteering have also become an integral part of the day-to-day activities of IT firms. Almost all of them regularly transfer funds to help the government purchase the equipment necessary equipment to bring victory over Russia closer.

IT companies continue to work and implement projects even during blackouts, pay their taxes on time, increase their presence on the global market and attract new customers.

A key factor for the further growth of the industry – even during wartime – is the synergy between business and the government, the development of joint mechanisms and initiatives that will allow the industry to make maximum use its potential.

The IT industry has all the prerequisites to become the main driver of the reconstruction of Ukraine after our victory.

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