We often hear the rallying cry that entrepreneurs are the backbone of the economy. Stories of garages turned into global empires fill our business magazines, fueling a universal narrative: if you have a good idea and the grit to see it through, you should start a company. But what this narrative quietly ignores is that for millions of people around the world, this dream is not just difficult—it’s a mathematical absurdity. In many countries, starting a legitimate business isn’t a test of innovation; it’s a gauntlet of pointless hurdles that ultimately tells bright minds to sit back down.
The trouble begins at the very conception. Imagine you have a skill—you bake incredible bread, you code elegant solutions, you can fix anything with an engine. Your natural thought might be to formalize that skill, to build something small and sustainable. But then you encounter the bureaucratic mountain. The process isn’t merely about filling out a single form. It is a labyrinth of disconnected government offices, each requiring its own pilgrimage. You will need certificates from departments that barely communicate, stamps from officials who are never in, and approvals that reference obscure regulations written decades ago. The sheer time cost, measured in weeks or months of lost productivity, becomes the first silent tax on your ambition.
Then comes the financial trapdoor. Official registration fees might look manageable on a government website, but that’s rarely the full story. There are often hidden, unofficial costs—the “facilitation payments” required to move your file from one pile to another, or the mandatory legal translation services from a single approved firm that charges ten times the market rate. For someone using their life savings, this gray economy of bureaucracy transforms startup capital from fuel for growth into a toll paid just to enter an empty road. You haven’t bought inventory or launched a website; you’ve simply purchased the permission to exist, penniless.
But permission to exist is not permission to operate. The regulatory environment in such places is not designed for clarity or safety; it is a dense fog of contradictory rules. Compliance isn’t a straightforward path but a constant, looming risk. You could be fully licensed and still fall afoul of a municipal ordinance you’ve never heard of, resulting in fines that shutter you overnight. This environment doesn’t foster careful business planning; it fosters paranoia and a powerful incentive to stay in the shadow economy, where you have no protection but also face fewer arbitrary chokeholds.
All of this culminates in a crushing psychological reality: the risk-reward calculus is completely broken. The potential upside of your small business—a modest livelihood, a few employees, a respected local service—is wildly outweighed by the guaranteed downside of lost time, consumed savings, and legal vulnerability. When the system is designed this way, the rational choice is not to play the game. The brilliant baker stays a home baker, the talented mechanic fixes friends’ cars for cash, the software developer seeks a remote job with a foreign company. The local economy loses the innovation, the jobs, and the tax revenue. A cycle perpetuates where only the already-monied or well-connected can navigate the maze, stifling competition and entrenching stagnation.
This isn’t about the universal struggle of entrepreneurship. That struggle involves market risks, product development, and competition. This is about artificial, state-created friction that exists only to gatekeep. It tells citizens with passion and talent that their contribution is not welcome unless they can first bleed themselves dry navigating a system designed to be opaque. The great irony is that these countries often speak loudly of economic growth and innovation while maintaining structures that systematically crush its first green shoots. The dream isn’t dead there; it’s been made mathematically unsound, the most effective deterrent of all. The true loss isn’t a few businesses that never were; it’s a future that never gets built.