Are these the five easiest European countries to start a business?

Are these the five easiest European countries to start a business?

Euronews Business takes a closer look at the five European countries that could be the best place to start a business.

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Starting a small or medium-sized company in Europe doesn’t have to be as daunting as most people think. Although some countries across the continent may have stricter regulations that can be difficult for non-EU citizens, others are very open and welcoming to both local and foreign investors and business people.

After the impact of COVID-19 and the energy crisis, Europe has done more to support and welcome SMEs. There are currently a number of funding and support schemes for small and medium-sized enterprises, such as the Single Market Programme, the Connecting Europe Facility (CEF) and Horizon Europe. It also has a number of knowledge tools such as Your European Business Portal, the European Enterprise Network and Erasmus for Young Entrepreneurs.

The EU is home to 24.4 million SMEs in 2023

According to statesman, in 2023, the European Union had around 24.4 million small and medium-sized enterprises (SMEs), employing nearly 85 million people. These accounted for about 99.8% of all businesses opened on the continent and were the backbone of smaller regions and cities.

How easy it is to do business in any country means considering several key factors. The World Bank’s Ease of Doing Business index classified these into 10 parameters. This includes:

  • Starting a business
  • Obtaining construction permits
  • Getting electricity
  • Property registration
  • Getting the loan
  • Protection of minority investors
  • Payment of taxes
  • Trade across borders
  • Enforcement of contracts
  • Bankruptcy settlement

Although not every country may be the best in every category listed above, here are some of the easiest places in Europe to start a business:

Ireland

The Republic of Ireland is one of the most popular choices for starting a business in Europe, as it is a high-income and highly digitally developed economy. According to 1Office, smartphone usage has reached 90%, with household internet access also touching 92%, laying a good foundation for businesses with technology and digital products. With Enterprise Ireland investing in around 200 startups each year, the country sends a very strong and welcoming message to entrepreneurs around the world.

According to the World Bank’s Doing Business in the European Union 2020: Ireland STUDY, several Irish cities rank highly for many of the above parameters. Businesses can quickly implement contracts and get electricity seamlessly in Cork. Dublin also does well in these two things, as well as starting businesses. Waterford is more efficient in issuing building permits, while Galway is best in registering property as well as starting a business.

As Ireland is a member of the European Union, the OECD and the Eurozone, as well as the use of the Euro and English as one of the main languages, are also very attractive factors for European entrepreneurs. This is due to increased ease of doing business, a larger market across the EU and cost savings in terms of no foreign exchange or translation fees.

Entrepreneurs from the UK, Iceland, Norway, Switzerland and the EU do not need any permits or visas to set up shop in Ireland. The country also facilitates the establishment and registration of remote companies for non-EU citizens. It also has one of the lowest corporate tax rates in the world at 12.5% ​​and a Double Taxation Treaty with around 72 countries so far.

Bulgaria

Bulgaria is a highly favored new business center in Eastern Europe due to the relatively low bureaucracy involved in setting up a company, which only takes a few weeks. Administration costs are also very low, compared to most of Europe, and corporation tax is only 10%.

Foreign companies have no legal restrictions on purchasing land in the country, and only have to pay operating costs after registration. EU entrepreneurs can also benefit from free labor, a highly skilled and multilingual workforce and a relatively low cost of living, while still having access to the European single market because Bulgaria is part of the EU. of.

Bulgaria’s geopolitical location in Southeast Europe also provides convenient access to other established markets such as Greece and Turkey, while opening up opportunities in Serbia and North Macedonia.

Bulgaria also allows remote company registration. However, corruption still remains an issue in the country, which must be taken into account when considering what type of business to set up and in which part of the country to locate.

Netherlands

According to World Economic ForumThe Netherlands is the fifth largest economy in the European Union, with a gross domestic product of about $990.6 billion (€918.7 billion), which accounts for about 5.96% of the EU economy.

Conveniently located in Western Europe, the Netherlands has an extremely cosmopolitan, highly educated and skilled workforce. The Dutch government offers a number of business support schemes and tax incentives for new businesses. Although the corporate tax rate is slightly higher than some other European options at 25.8%, a number of business owners may find it worth the price, for the location and market access.

Incentives include an entrepreneur’s allowance as well as a 30% decision. This allows employers to pay 30% of foreign talent’s wages tax-free. In addition, the government supports research and development as well as innovation by reimbursing a number of costs to companies that conduct scientific research or develop new innovative products, among others.

The Netherlands is particularly favored by entrepreneurs with technologically advanced companies such as robotics and artificial intelligence, as well as retail.

Sweden

With world-class infrastructure and technology, Sweden is ranked second in the Network Readiness Index 2020. This index measures how digital a country is and how ready a country’s people, businesses and government are to fully utilize technology. available.

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As such, Sweden is another startup and business hub for tech entrepreneurs around the world, with a very high number of early adopters of new technology. Prominent Swedish companies include Ericsson, Astra Zeneca, Volvo and Sandvik, as well as Klarna and Spotify among others.

With Sweden also being the largest Scandinavian economy, it also has a thriving construction sector, with excellent reach across Northern Europe, which also attracts construction entrepreneurs as well as contributing to sustainable infrastructure. Stable governance and low levels of corruption also add to the country’s charm.

United Kingdom

According to the British Business Bank, around 360,000 new businesses are created in the UK every year. Forming a company is also relatively quick, easy and cheap, with postal applications processed within eight to 10 days and online applications within 24 hours.

With one of the most diverse economies and workforces in Europe, the UK also has measures in place to support businesses in their early years when profitability is low. It also provides tax relief at the end of a business’s life, in relation to income earned on the sale of assets.

In addition, the UK has a strong tax and legal system, with efficient processes and a corporation tax rate of 25% for all limited companies. With a third of adults now having some sort of higher degree, the workforce is highly skilled and adaptable.

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A number of crowdfunding, venture capital and angel investment opportunities are also available to entrepreneurs, as well as government grants, funding and advice, through various government departments.

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