Tourism-Friendly Isn't Business-Friendly: Where Hospitality Business Really Thrives!

Low taxation can help a hospitality business, but tax alone does not fill hotel rooms, resolve labour shortages or create a stable investment environment. In this research-informed opinion piece, I consider ten comparatively favourable and ten particularly challenging countries for hospitality operators and ask how much their prospects depend on taxation, government support, regulatory stability, market potential and operating conditions.

The real cost of running a hospitality business

When I ask hospitality operators what makes a country attractive for investment, taxation and rates quickly enters the conversation.

I do agree that corporate tax matters. VAT can be an even more immediate concern for restaurants and hotels trying to keep their prices affordable without losing their margin. Payroll taxes, property taxes, tourism levies and licensing fees can leave very little at the end of the month, even when the business looks busy.

But taxation is only part of the story.

A country may offer a very low corporate tax rate but lack sufficient visitor demand, reliable infrastructure or access to skilled employees. Another may have higher taxes but make running the business easier through reliable transport, effective destination marketing, clear rules and a steady flow of domestic and international visitors.

Hospitality is also a business in which government decisions quickly reach the kitchen, reception desk and payroll. Changes to VAT, business rates, alcohol licensing, employment law, visas, short-term rental regulations, planning rules and tourism taxes can force an operator to rethink the budget almost overnight.

The best country in which to establish a hospitality business is therefore not necessarily the country with the lowest headline tax. For me, the more useful question is whether an operator can attract customers, recruit people, meet the bills and plan ahead with some confidence. 

There is also a distinction worth drawing early: a government can promote tourism enthusiastically while still making life difficult for the hotels, restaurants and other businesses that serve the visitors it attracts. Being tourism-friendly and being hospitality-business-friendly are not the same thing, and the real test, to my mind, is not how little government takes from the sector but whether the wider environment lets a hospitality business set up, operate and grow. 

As such I have carried out research that is not a validated model because it is not easy to define what a hospitality business is and true cultural context ALWAYS matters. So please do take my thoughts and research on this topic with a grain of salt. It is meant as an opinion piece to generate debate when we often complain how bad it may be in one country or the other…perhaps misery does like company after all.

How I approached the comparison

None of the sources I used here answers the precise question: where is it easier or harder to run a hospitality business once taxation, government support and changing rules are considered together? I have therefore drawn on four sources to inform a qualitative comparison:

1. The World Economic Forum Travel & Tourism Development Index 2024, which evaluates 119 economies across 17 pillars, including business environment, labour, infrastructure, tourism prioritisation, openness and price competitiveness (World Economic Forum, 2024).

2. The World Bank Business Ready framework, which assesses regulatory frameworks, public services and operational efficiency across the lifecycle of a business (World Bank, 2025).

3. The World Justice Project Rule of Law Index 2025, particularly evidence concerning regulatory enforcement, corruption, government accountability and civil justice (World Justice Project, 2025).

4. The OECD Corporate Tax Statistics database, supplemented by government tax authorities and PwC Worldwide Tax Summaries where OECD coverage was incomplete (Organisation for Economic Co-operation and Development; OECD, 2026; PwC, 2026a, 2026b).

I organised the comparison around five questions. These are the considerations guiding the discussion, not components of a calculated index.

The countries were selected purposively to illustrate contrasting business environments, rather than through an exhaustive assessment of every country. No five-point scores or weighted totals were calculated. Their placement reflects editorial judgement informed by the sources, not a statistically validated ranking. It is also worth being precise about what is being compared: ease of setting up a business, ease of operating one, general investment attractiveness and the likelihood that a hospitality business will thrive overlap considerably, but they are not the same test, and I have tried to say which one I mean where the distinction matters for a particular country.

The tables offer a starting point for discussion and further investigation. They do not establish that these are the world’s ten best or ten worst countries for hospitality investment.

Ten countries with a favourable case to make

Note. Tax rates are indicative headline rates. Effective liability depends on company size, ownership, location, exemptions, surtaxes and the treatment of distributed profits. Positions reflect the ordering of this opinion piece, not calculated scores. Sources: OECD (2026), PwC (2026a, 2026b), United Arab Emirates Government (2026a, 2026b), Inland Revenue Authority of Singapore (2026) and AICEP Portugal Global (2026).

1. United Arab Emirates

The United Arab Emirates stands out in this comparison because competitive taxation sits alongside investment in destinations and international connectivity.

The general federal corporate tax rate is 9 per cent on taxable income above the applicable threshold, while VAT is 5 per cent. Large multinational groups may face additional treatment under international minimum-tax provisions (International Monetary Fund [IMF], 2026; United Arab Emirates Government, 2026a, 2026b).

Dubai and Abu Dhabi have become globally connected hospitality markets supported by aviation, events, property development and sustained destination marketing. The UAE improved from 25th to 18th in the World Economic Forum’s tourism-development ranking between 2019 and 2024 (World Economic Forum, 2024).

That does not make it a cheap place to operate. Prime rents, salaries, employee accommodation and the cost of attracting customers can be substantial. Operators still have to win business in a crowded market, and regulatory requirements differ between emirates and economic zones.

2. Singapore

Singapore’s appeal is the prospect of getting on with running the business, supported by efficient administration and clear procedures.

Its corporate income tax rate is 17 per cent, with exemptions and rebates available to qualifying businesses. The Singapore Budget 2026 also introduced a corporate tax rebate intended to help businesses manage cost pressures (Inland Revenue Authority of Singapore, 2026).

The country combines political stability, excellent air connectivity, digital public services and efficient business administration. Singapore has also performed particularly strongly for operational efficiency within the World Bank’s Business Ready evidence (World Bank, 2025).

The difficulty is paying for that environment. Property, labour and utilities are expensive, while the domestic leisure market is relatively small. I would therefore see a stronger case for premium hotels, international restaurant concepts, regional headquarters and technology-enabled hospitality businesses than for a business competing mainly on low prices.

3. Portugal

For an independent operator considering Europe, Portugal deserves a close look.

It has an established tourism market, strong city-break and leisure markets, EU access and comparatively supportive conditions for setting up a business. The mainland corporate income tax rate is 19 per cent, although municipal and state surtaxes can increase the effective burden for larger businesses (AICEP Portugal Global, 2026).

Portugal ranks 12th in the World Economic Forum’s Travel & Tourism Development Index, reflecting its connectivity, tourism resources and established infrastructure (World Economic Forum, 2024).

The practical questions are familiar: how long will approvals take, who will staff the business and what happens when the main season ends? These matter particularly in resort regions.

4. Estonia

Estonia will appeal to operators who want less time spent on administration and more time spent running their business.

It offers highly developed digital public services and strong institutional performance. Its corporate-tax structure has traditionally supported reinvestment by taxing profits when they are distributed.

However, favourable treatment of reinvested profits does not mean low taxes across the board. Estonia’s standard VAT rate increased to 24 per cent in July 2025, with different rates applying to particular categories of supply (Estonian Tax and Customs Board, 2025).

The other question is demand. An efficient place to establish a company is not automatically a place with enough customers to support its expansion.

5. Georgia

Georgia’s appeal lies in comparatively low operating costs, its treatment of distributed profits and the relative ease of setting up a business.

The country has performed well in World Bank (2025) assessments of business location and operational efficiency. Its wine, food, mountain and cultural tourism give smaller operators something distinctive to build a business around.

That opportunity needs to be considered alongside geopolitical exposure, currency risk, uneven service standards and less institutional predictability than Western European markets.

6. Spain

Spain is a useful reminder that customers matter as much as tax rates.

It is not a particularly low-tax jurisdiction, but it ranks second globally in the World Economic Forum Travel & Tourism Development Index (World Economic Forum, 2024).

Spain offers international demand, substantial domestic tourism, excellent airports, rail connectivity, established supply chains, culinary identity and globally recognised destinations.

Its challenges include employment costs, regional differences, planning restrictions, water pressures and increasing intervention in overtourism and short-term accommodation. For a well-positioned hotel or restaurant, however, access to those customers may justify the higher costs.

7. Cyprus

In Cyprus, hospitality is part of an established tourism economy, with EU membership and comparatively competitive corporate taxation adding to its appeal.

Its corporate income tax rate increased from 12.5 to 15 per cent in January 2026 (PwC, 2026a). English is widely used in business, tourism infrastructure is established and the island has extensive experience in resort operations and international property investment.

Before committing, an operator still needs to account for seasonality, a small domestic market, dependence on air access and environmental pressures involving water, energy and coastal development.

8. Mauritius

Mauritius deserves consideration from operators looking at resort and luxury hospitality in the Indian Ocean.

The headline corporate tax rate is 15 per cent. The country also has established investment-promotion institutions and a successful international resort sector. Mauritius ranks 57th globally in the World Economic Forum index but is the highest-ranked Eastern African economy (World Economic Forum, 2024).

The business plan must allow for the realities of island operations: long-haul access, imported supplies, climate risks and a limited pool of employees.

9. Saudi Arabia

Few governments are investing as visibly or ambitiously in tourism and hospitality as Saudi Arabia.

Vision 2030, new airlines, major events and large-scale destination projects have created opportunities across hotels, restaurants, entertainment and luxury tourism. Saudi Arabia improved from 50th to 41st in the World Economic Forum ranking between 2019 and 2024 (World Economic Forum, 2024).

Foreign investors are generally subject to corporate income tax of 20 per cent on their relevant share of profits, while VAT is 15 per cent (IMF, 2026; OECD, 2026).

Saudi Arabia makes this list principally because of the scale of its tourism ambitions and government backing. It is not a low-tax choice across the board. An operator needs to understand the regulations, local hiring requirements and cultural context, and ask how much the proposed business depends on government-led projects being delivered.

10. Croatia

For a smaller hotel or boutique operation, Croatia offers an appealing combination of established coastal destinations, European demand and EU membership.

Summer demand is a clear attraction. Its weaknesses include extreme seasonality, workforce shortages, rising property prices and pressure on coastal infrastructure.

The question I would ask is simple: what will keep the business going beyond July and August?

Ten markets that demand particular care

A country can attract millions of visitors and still be difficult for the people running its hotels and restaurants. The following markets illustrate different pressures, from tax complexity to the cost of keeping the lights on. Their inclusion is a reason to investigate carefully, not a recommendation to avoid them.

Note. This is an editorial selection, not a measured global bottom ten. Tax rates are indicative headline rates, not effective rates for every operator. PwC (2026a) supports the tax-rate information; the wider assessments were based on qualitative research adapting numerous reports and newspaper articles.

1. Argentina

Argentina’s appeal as a destination does not remove the difficulty of planning a business when financial conditions change.

The corporate income tax rate can reach 35 per cent and the standard VAT rate is 21 per cent (PwC, 2026a, 2026b). Inflation, exchange-rate movements, currency controls and recurring changes in economic policy make purchasing, pricing, investment appraisal and profit repatriation extremely challenging.

A full restaurant or busy hotel does not necessarily mean that its earnings will retain their value.

2. Nigeria

Nigeria offers access to a large domestic market, but the practical costs of operating deserve close attention.

Multiple taxes and levies, currency volatility, security requirements, inconsistent electricity supply and infrastructure weaknesses can considerably increase the real cost of doing business. The tax bill tells only part of the story if the business must also pay to secure reliable power and protect its premises.

The World Economic Forum ranked Nigeria 112th of 119 economies in its 2024 tourism-development assessment, despite improvement since 2019 (World Economic Forum, 2024).

3. Brazil

Brazil’s food, culture and visitor appeal make a compelling case. Understanding what the business will owe, and to whom, is another matter.

The combined headline corporate burden is commonly reported at approximately 34 per cent, before considering the wider interaction of federal, state and municipal taxes (PwC, 2026a).

Licensing, payroll costs, indirect taxation and slow legal processes add further complexity. Good local legal and accounting advice should be part of the budget from the outset.

4. Turkey

Turkey has considerable hospitality experience and visitor appeal. For an operator, the difficult question is how confidently next year’s costs can be estimated.

Inflation and exchange-rate volatility can rapidly change food, energy, wage and financing costs. The standard corporate tax rate is 25 per cent and VAT is 20 per cent, although particular hospitality supplies may receive different treatment (PwC, 2026a, 2026b).

Strong bookings are encouraging, but the assumptions behind the budget still need regular checking.

5. India

India’s domestic travel market is a major attraction. However, an operator needs to understand the particular state and municipality in which the business will trade.

Operators may need to navigate central and state taxation, food regulation, alcohol licensing, planning permissions, fire certification, employment requirements and local administrative practices.

GST treatment varies by category, with rates ranging from 5 to 28 per cent and a general rate of 18 per cent on many goods and services (PwC, 2026b).

The opportunity deserves attention, and so does the local knowledge needed to make it work.

6. South Africa

South Africa has much to offer visitors. For operators, the question is what it costs to deliver a reliable experience every day.

The corporate income tax rate is 27 per cent and VAT is 15 per cent (PwC, 2026a, 2026b). Backup power, security, insurance and gaps in municipal services all need to be considered alongside staffing and the tax bill.

The favourable exchange rate can support international tourism but also makes imported equipment and products more expensive.

7. Colombia

Colombia’s food, culture and growing visitor appeal offer reasons to invest, although corporate taxation is a significant consideration.

Administrative complexity, security differences between regions and changing tax policy can make long-term planning difficult. The country may still offer excellent opportunities in Bogotá, Medellín, Cartagena and selected nature-based destinations, but I would want to assess the particular city and location before drawing a conclusion about the country as a whole.

8. Greece

Greece reminds us that a successful tourism destination is not necessarily an easy place to run a hospitality business. Taxation, social-security costs, bureaucracy and fragmented licensing still matter to the operator.

The corporate income tax rate is 22 per cent and the standard VAT rate is 24 per cent, although reduced rates apply to qualifying categories (PwC, 2026a, 2026b).

Planning restrictions, island logistics, seasonal labour and recurring regulatory interventions create additional pressure. Visitor numbers do not tell us how much is left after a business has paid its people, suppliers and taxes.

9. Italy

Italy’s appeal to visitors is clear. The administrative demands facing an operator deserve equal attention.

Its headline corporate income tax rate is 24 per cent, but the overall burden can be higher once regional and other taxes are considered. The standard VAT rate is 22 per cent (PwC, 2026a, 2026b).

Payroll costs, municipal differences, heritage restrictions, slow legal processes and complex approvals can delay development. Even where demand is strong, turning it into a sustainable profit takes more than a desirable address.

10. United Kingdom

The United Kingdom is institutionally stable and ranks seventh globally in the World Economic Forum tourism-development index (World Economic Forum, 2024). So why include it here?

My concern is the accumulation of costs facing operators: 20 per cent VAT on most hospitality sales, corporation tax of up to 25 per cent, business rates, higher labour costs, employer contributions, expensive energy and high property costs (PwC, 2026a, 2026b).

Government support has frequently been described by operators as reactive or temporary, while operators have faced continuing changes involving employment, immigration, tipping, packaging, food regulation and local licensing. The discussions and debates on LinkedIn are too many to list.

The distinction matters. Clear rules and dependable institutions are valuable, but they do not, by themselves, make the sums work for a small hotel, restaurant or pub.

Exclusions

I left out Afghanistan, Haiti, Myanmar, Sudan, South Sudan, Yemen and similar jurisdictions entirely. All appear on the World Bank’s list of fragile and conflict-affected situations (World Bank, 2026), and judging them by tax rates and licensing requirements would miss what actually matters there. That is not a comment on whether hospitality has a place in these countries, or in their recovery - it is simply a different assessment from the one this piece is trying to make.

I was equally cautious in the other direction. Small jurisdictions offering very low or zero corporate tax did not automatically qualify for the favourable list. A 0 per cent headline rate is a reason to look closer, not a reason to stop asking about customers, flights, staff, land and supplies, and several such places attach sector licences, import duties, ownership rules or international minimum-tax provisions that quietly close the gap the headline rate seems to promise. I have not assessed them systematically here, so their absence is a gap in this piece, not a verdict on them.

The sources behind this piece do not cover identical groups of countries either: the World Economic Forum’s index runs to 119 economies, the World Justice Project’s to 143, and the World Bank’s Business Ready programme is still being rolled out country by country. An absence of comparable data is not evidence of a poor business environment - it simply limits what I can responsibly claim.

Limitations and how to read the lists

A few things are worth keeping in mind as you read. The country is only the starting point: operating in Dubai is not the same as operating in Fujairah, and a restaurant in London faces different property and labour economics from one in Newcastle. City, region and property type can matter more than the country on the cover.

The headline tax rate is rarely the final bill. What a business actually pays depends on its size, ownership structure, deductions, how and when profits are distributed, municipal taxes, property charges and sector-specific VAT treatment.

An announcement is not the same as help arriving. A government can promise billions for tourism and still leave the independent hotel or restaurant down the road to fend for itself.

Some of the evidence is closer to opinion than measurement. The indices behind this piece mix administrative data with executive surveys and expert judgement, and a country’s rule-of-law score does not tell you how often its hospitality-specific rules change.

There is also no such thing as one hospitality business. A luxury resort, a pub, a contract caterer, an independent restaurant and a digital hospitality platform carry different labour, property and tax exposures, even within the same country.

None of this is a verdict to avoid a market. Brazil, India, Italy and the UK all sit in the second table, and all four offer real opportunities; a different operator, with different priorities, would draw up a different list entirely.

Finally, this is a snapshot rather than a single moment frozen in time - the sources behind it date from different years, and taxation and regulation move quickly enough that any real decision needs current, jurisdiction-specific advice rather than this article.

Final thoughts: low tax is not enough

On the evidence considered here, I see a strong case for looking closely at the UAE, Portugal and Singapore, although for different reasons. That is a judgement to investigate, not a verdict that applies to every business.

Argentina, Nigeria and Brazil raise different questions about financial planning, infrastructure and tax administration. Grouping them together should not obscure those differences.

What matters most to me is what governments can learn from the comparison.  Hospitality businesses do not simply need governments to tax them less. They need governments to understand how hospitality works.

They need long-term tourism strategies, reliable infrastructure, sensible immigration systems, proportionate licensing and regulations that do not change every time an operator has finally adapted to the previous ones.

Operators need to know what is expected of them, what it will cost and how much time they have to adapt. That is a reasonable expectation for anyone employing people and committing their savings to a business.

Perhaps that should become the real test of a hospitality-business-friendly country: not simply how little government takes from the sector, but how consistently it helps the sector create employment, experiences, investment and lasting benefits for the communities it serves.

Taxation and regulation are only part of the operating risk a hospitality business carries. For those wanting to look at another growing threat cyberattacks, data breaches and ransomware targeting hotels, restaurants and tourism operators, ICHARM's Cyber Risk and Resilience Quarterly turns recent incidents into practical guidance:  https://www.uwl.ac.uk/research/research-centres/ICHARM/projects-publications#cyber

References

AICEP Portugal Global. (2026). Corporate income tax. https://www.portugalglobal.pt/en/investment/doing-business/taxation/corporate-income-tax/

Estonian Tax and Customs Board. (2025). VAT rates and supply exempt from tax. https://www.emta.ee/en/business-client/taxes-and-payment/value-added-tax/vat-rates-and-supply-exempt-tax/standard-vat-rate

Inland Revenue Authority of Singapore. (2026). Corporate income tax rate, rebates and tax exemption schemes. https://www.iras.gov.sg/taxes/corporate-income-tax/basics-of-corporate-income-tax/corporate-income-tax-rate-rebates-and-tax-exemption-schemes

International Monetary Fund. (2026). Taxation in the Middle East and North Africa: Prospects and possibilities. https://www.imf.org/-/media/files/publications/books/2026/english/tmenaea.pdf

Organisation for Economic Co-operation and Development. (2026). Corporate Tax Statistics 2026: Statutory corporate income tax rates. https://www.oecd.org/en/publications/corporate-tax-statistics-2026_73af6222-en/full-report/statutory-corporate-income-tax-rates_ce84abb9.html

PwC. (2026a). Worldwide Tax Summaries: Corporate income tax rates. https://taxsummaries.pwc.com/quick-charts/corporate-income-tax-cit-rates

PwC. (2026b). Worldwide Tax Summaries: Value-added tax rates. https://taxsummaries.pwc.com/quick-charts/value-added-tax-vat-rates

United Arab Emirates Government. (2026a). Corporate tax. https://u.ae/en/information-and-services/finance-and-investment/taxation/corporate-tax

United Arab Emirates Government. (2026b). Value added tax. https://u.ae/en/information-and-services/finance-and-investment/taxation/vat/valueaddedtaxvat

World Bank. (2025). Business Ready 2025. https://www.worldbank.org/en/businessready/publications

World Bank. (2026). Classification of fragile and conflict-affected situations. https://www.worldbank.org/en/brief/2026/07/01/classification-of-fragile-and-conflict-affected-situations

World Economic Forum. (2024). Travel & Tourism Development Index 2024. https://www.weforum.org/publications/travel-tourism-development-index-2024/

World Justice Project. (2025). WJP Rule of Law Index 2025. https://worldjusticeproject.org/rule-of-law-index/