New Zealand has been ranked the second-best country in the world in which to do business by commerce website Forbes, behind Canada and ahead of the UK and US.

According to Forbes’ Kurt Badenhausen, New Zealand’s economy has held up well during the global recession.

"Over the past 20 years the government has transformed New Zealand from an Agrarian economy dependent on concessionary British market access to a more industrialised, free market economy that can compete globally,” Badenhausen writes.

Australia just missed out on the top 10, finishing 11th.

New Zealand was third in last year’s rankings, which take into account factors like property rights, red tape, and stockmarket performance.

The bottom three countries were Burundi, Zimbabwe and Chad, ranked 132, 133 and 134 respectively.

The top 10 (with last year’s rankings):

1. Canada (4)

2. New Zealand (3)

3. Hong Kong (2)

4. Ireland (6)

5. Denmark (1)

6. Singapore (5)

7. Sweden (7)

8. Norway (8)

9. United Kingdom (10)

10. United States (9)