Start-ups are counted as 'engine' for innovation, especially in developing countries. However, in developing countries, bureaucratic barriers and costs are main impediments for start-ups. In this paper, the main barriers and costs are examined within panel data analysis framework in the developing countries indicating whether there are barriers and costs for start-ups between 2004 and 2012. Panel data analysis which has corrected robust standard errors for heteroscedascity and autocorrelation is used in this paper for researching start-ups condition in 61 developing countries. The results were obtained show that there are bureaucratic barriers and costs are main impediments for start-ups and innovation in the developing countries. (C) 2014 The Authors. Published by Elsevier Ltd.