Starting a business in European countries is a smart choice for many entrepreneurs. European countries welcome new businesses, offering a favorable business climate, a robust free-market economy, and a strong consumer-driven market.

The best European countries for starting a business are the United Kingdom and Germany. Both of these European countries have business-friendly laws and regulations with a highly skilled workforce and a wealthy population.

Why start a business in European countries?

Starting a business in Europe gives you instant access to some of the world’s wealthiest economies. With a population of almost 750 million, Europe remains one of the most attractive options for entrepreneurs from all over the world.

European countries have an outstanding infrastructure, making the idea of starting a business appealing. In addition, its highly skilled workforce and strong legal protections make starting a business in Europe a smart choice for business formation and international investment.

Before you decide which is the best European country to start a business, you should consider a wide range of factors. From attracting investment to hiring employees, there are many critical factors to weigh before you can decide where to start a business in Europe.

What makes European countries some of the best for starting a business?

Economic and political stability are some of the key factors that make European countries the best to start a business. European nations also have excellent governance with favorable policies that welcome business investment. And such a business environment actually encourages entrepreneurship and innovation.

The favorable business environment, coupled with the availability of disposable income of the local population and favorable trade agreements with other equally large markets around the world, make European countries perfect for business investment.

Our research offers you insights, tips and advice about the best countries to start a business in Europe. Now that we know what to look for in a European country to determine whether or not it is the best for doing business, let’s look at some of the best European countries on which you should further investigate (in no specific order):

What is the best European country to start a technology business?

Germany is one of the most technologically advanced countries in Europe. Moreover, its tech startup hub in Berlin makes Germany one of the best countries in Europe for starting a tech business.

In addition, Germany has the largest economy in Europe and the fourth largest in the world. Its business-friendly policies make this leading EU nation ideal for startups and mid and large-size business enterprises.

Why is Germany the best country in Europe to start a tech business?

Germany is one of the most innovative nations in Europe. It has a highly skilled workforce supported by a stable economy. Moreover, this country is politically stable and enjoys strong legal protections for investors and businesses entities.

Few other European countries can compete with the well-developed infrastructure in Germany. And with the largest and wealthiest consumer markets in Europe, Germany offers a favorable business environment for tech companies.

Which is the best European country to start a service business?

The United Kingdom is one of the best European countries to start a service business. Because of its ease of doing business, easier access to venture capital, large economy, and wealthy population, the UK is a great country for starting a service business today.

It doesn’t matter whether you are starting a business or a consumer service business; the United Kingdom has got a viable business climate to allow you to thrive.

Is Sweden the best European country to start a business in?

According to the World Bank and the World Economic Forum, Sweeden is one of the best European countries for starting a business. Its sizable, high-performing free-market economy makes Sweeden an excellent opportunity for entrepreneurs. As a result, this European Union member state remains one of the most powerful recipients of foreign investment.

According to the World Economic Forum, Sweeden ranks as the fourth most competitive economy in Europe. The country is known for its strong business climate and highly developed workforce.

What are the advantages of starting a business in Sweeden?

This Scandinavian nation has a GDP above $560 billion (PPP). The biggest boost to the Swedish economy comes from investment in construction ventures.

In fact, the World Bank ranks Sweden number 10 out of 190 economies for ease of doing business.

Online filing platforms simplify business formation, permitting, incorporation, taxes, and property transfer. Sweden offers some of the lowest corporate taxes in the European Union.

This Scandinavian country doesn’t have formal, thin capitalization rules and authorizes a total tax deduction for interest. Sweden is the largest market in the Nordic zone, providing businesses access to the Northern European market. The Scandinavian country can also provide businesses with advanced infrastructure and some of the most sophisticated research opportunities in the world.

Is Denmark the best country in Europe to start a business?

The Word Banks ranks Denmark first for ease of doing business in Europe. This European Union member state has an economic system similar to its neighbor Sweden.

What are the advantages of starting a business in Denmark?

Although Denmark is renowned for its strong welfare program, it ranks 7th for being the most welcoming country for capital investment. Denmark offers easy access for foreign investors.

Denmark’s flexible labor laws make the hiring and firing process extremely easy, allowing businesses to avoid most bureaucratic procedures commonly practiced in some European countries.

The European country is one of the world’s biggest food innovations, biotech, life sciences hub. A stable economy, low-interest rates attract companies to grow, expand, and start in Denmark.

Is the Netherlands the best European country for starting a business?

The Netherlands is well known for its favorable business climate and openness towards foreign entrepreneurs. There are no restrictions or special conditions for foreign direct investment and foreign entrepreneurs (including foreign companies) are allowed to have 100% ownership over a Dutch company.

Tax incentives and investment aid are available in the Netherlands. These include loans, grants, and direct subsidies, typically awarded for R&D projects and those businesses that help create jobs. A special “innovation box regime” (for corporate tax reduction) and a “30 percent ruling” (for hiring foreign employees) apply in the country.

The two most employed business forms in the Netherlands are the BV and the NV company (the private limited liability company and the public company). The main differences between these two include the ability to sell shares and list on the Stock Exchange (only for the NV) and the requirements for a minimum share capital.

Companies incorporated in the Netherlands are taxed on their worldwide income. The corporate income tax rate in the country is 20% on the first 200,000 EUR of taxable profits and 25% on profits that exceed this amount. Foreign businessmen interested in starting companies in the Netherlands are invited to try this Dutch tax calculator in order to find out the taxes they must pay for their businesses in this country.

An expert working at a law firm specialized in corporate matters in the Netherlands can help answer any questions you might have about opening a Dutch company and the special requirements, according to the selected business type.

What makes Ireland the best European country for starting a company?

One of the main reasons why start a business in Ireland include a favorable and welcoming business climate, that operates based on a pro-business framework. The country is an attractive location to base the company’s regional European headquarters.

Foreign investors are welcomed and there is no difference in their treatment, compared to local entrepreneurs. Ireland has a low corporate tax, nevertheless, the country also uses a generous research and development incentive scheme. Government incentives are mainly focused on foreign investments that provide high-skilled jobs.

Investors can open a public or a private limited liability company in Ireland, a partnership, sole proprietorship or a branch of a foreign company. The type of business entity is selected according to the available capital, the size of the business, the number of investors and other criteria.

start a business in Ireland

Ireland has a low corporate income tax rate of 12,5% for trading income and 25% for non-trading income. There is no capital duty, no payroll tax, and no net wealth taxes. Ireland has a broad double tax treaty network, allowing for the avoidance of double taxation on income for companies that derive income both from a source in Ireland and from another country.

If you want to establish a business in Ireland, you can talk to a local company incorporation specialist for assistance during the company formation procedure.

Is the Czech Republic or Czechia the best country in Europe to start a business?

The Czech Republic is one of the best European countries for starting a company. It’s a rising star for branches of international companies, start-ups, and established businesses. As a European Union member state, the Check Republic offers an exceptional strategic location in the continent’s center.

What makes Czechia one of the best places for starting a business?

Its sophisticated transportation system is one of the highest-rated in Central and Eastern Europe. This makes the Czech Republic a key European hub for connections, links, and transitions with Central, Eastern and Western Europe.

What are the advantages of starting a business in the Czech Republic?

The Czech Republic offers one of the lowest tax rates in the EU for business owners. Entrepreneurs can reduce the flat tax rate by up to 60% using the lump sum, reducing the effective tax rate to about 6-9%.

The low cost of office space is another advantage of starting a business in this European nation.

Success depends on several key factors, among which investors should not overlook the location of their new business. Each country has its own laws for foreign investments, taxes, and tax incentives as well as bureaucratic hurdles.

Who can help you find the best country in Europe for starting a business?

Many people and companies can help you decide on the best European countries to start a business. Attorney, tax professionals, local business professionals and entrepreneurs can help you decide where in Europe to start your business.

Don’t rule out a European country just because it has higher corporate taxes than another. Before you decide where in Europe to start a business, weigh ease of market access, market size, and ease of doing business.

Before you decide which is the best European country for starting a business, consider the following:

  • Language – If you don’t speak the local language, it greatly complicates dealing with the daily complexities of starting a company.
  • HR laws – For example, France may have a large, wealthy consumer base, but its nightmarish labor laws may rule it out as a European country for starting a business.
  • Competition – One European country may offer a more business-friendly environment, which also means more competition for your new business venture.
  • Regulations – The over-regulated European business environment makes starting a manufacturing business difficult.
  • Taxes – A low tax environment is not the most important factor for finding the best European country for starting a business. Having to deal with taxes is (almost) a good problem to have. The first priority is to make sure your business survives. And your business can and will survive for many other reasons before it fails due to higher taxes.