10 Best European Countries to Start a Business

Europe is a great place to start a business, with over 500 million consumers to tap into. The continent offers a strong infrastructure, helpful rules for businesses, and many incentives for entrepreneurs.

Moreover, Europe offers business owners the chance to benefit from competitive tax rates and access to skilled workers, which creates many opportunities for growth.

In this article, we’ll highlight the 10 best European countries to start a business, focusing on tax rates, benefits, drawbacks, and key cities that are ideal for entrepreneurs. Here is more of what we will cover:

• Why is Europe good for business?
• The 10 Best European Countries to Start a Business
• Benefits of Starting a Business in Europe
• What makes a country good for business?

Why is Europe a good place to start a business?

Europe is good place to start a business because it has strong infrastructure, a supportive regulatory environment, and access to a large consumer market. In 2023, the European Union had about 24.4 million small and medium-sized businesses (SMEs), employing nearly 85 million people. These businesses made up 99.8% of all companies in the EU, according to Statista.

The World Bank’s Ease of Doing Business Index also highlighted the appeal of countries like Denmark, Estonia, and Ireland, which are known for efficient business processes, low bureaucracy, and strong support for entrepreneurs.

Generally, reports show that Europe stands out as a great place for business due to competitive tax rates and strong innovation support. Countries such as Sweden and the Netherlands offer favorable tax regimes, but different nations thrive in sectors like tech, green energy, finance, and more.

The 10 Best European Countries to Start a Business

The countries listed below are some of the best European countries to start a business in because of their low tax rates and favorable labor laws. Some even offer residency by investment options. The list also features the investment index which is part of the comprehensive Global Citizen Solutions Global Passport Index.

The Investment Index shows the investment opportunities in other countries. These countries allow you to do business easily and take advantage of good tax regimes. Therefore, for people seeking second citizenship, getting a passport that supports investment can be a great way to protect your financial freedom while living abroad.

Ireland

• Corporate tax rate: 12.5% (one of the lowest in Europe)
• Investment Index ranking: 19
• Population: 5.28 million
• Key location(s): Dublin – tech hub with a multilingual workforce

Ireland is one of the best European countries to start a business due to its low corporate tax rate of 12.5% and pro-business environment. Known as a hub for technology and pharmaceuticals, it attracts global giants like Google and Pfizer. The Irish government actively encourages foreign investment through grants, tax credits, and support programs offered by organizations like IDA Ireland. Dublin is the primary location for business, as it offers excellent infrastructure, an English-speaking workforce, and access to the EU market.

Estonia

• Corporate tax rate: 0% on retained earnings; 20% on distributed profits.
• Investment index ranking: 37
• Population: 1.33 million
• Key location(s): Tallinn – a growing tech ecosystem with coworking spaces.

Estonia stands out with its 0% corporate tax on retained earnings and its innovative e-residency program, which allows foreign entrepreneurs to register and manage businesses remotely. This digital-first approach has made Estonia a top choice for tech startups. The country also has a government that actively supports foreign investment through startup grants, low administrative barriers, and a streamlined business registration process. One of the key cities for business is Tallinn which has coworking spaces and a growing tech ecosystem.

Germany

• Corporate tax rate: Around 29.8% (combined federal and municipal taxes).
• Investment index ranking: 16
• Population: 84.36 million
• Key location(s): Berlin (startups) and Munich (high-tech industries)

Germany, Europe’s largest economy, offers unparalleled business opportunities due to its industrial strength, central location, and highly skilled workforce. With a corporate tax rate of around 29.8%, Germany provides a stable and robust market for various industries, from manufacturing to tech. The government actively promotes foreign investment through programs like “Make in Germany” and regional grants for innovation and R&D projects. Thanks to its vibrant culture and access to international talent, Berlin is a top choice for startups, while Munich appeals to high-tech industries.

Netherlands

• Corporate tax rate: 19% on profits up to €200,000; 25.8% above that
• Investment index ranking: 17
• Population: 17.72 million
• Key location(s): Amsterdam – known for fintech and creative industries.

The Netherlands is a pro-business country with a corporate tax rate of 19% on profits up to €200,000 and 25.8% above that. Its strategic location and world-class logistics network make it a preferred base for businesses targeting Europe. The Dutch government is all for foreign investment and shows that through tax incentives, grants for innovation, and the Netherlands Foreign Investment Agency (NFIA). Amsterdam is the best location for startups, offering a multilingual workforce and thriving industries like fintech and creative sectors.

Sweden

• Corporate tax rate: 20.6%.
• Investment index ranking: 11
• Population: 10.51 million
• Key location(s): Stockholm – home to successful startups like Spotify.

Sweden, with a corporate tax rate of 20.6%, is known for its innovation, sustainability, and strong focus on research and development. The government supports foreign investment through tax incentives and funding for green technology and digital transformation projects. Stockholm is the best city for business, often referred to as the “Unicorn Factory” for producing successful startups like Spotify. Sweden’s strong economy, skilled workforce, and focus on innovation make it a highly attractive destination for entrepreneurs.

Denmark

• Corporate tax rate: 22%
• Investment index ranking: 11
• Population: 5.86 million
• Key location(s): Copenhagen – strong in green tech and life sciences

Denmark offers a corporate tax rate of 22% and a business-friendly environment supported by its “flexicurity” labor model, balancing employer flexibility and worker security. The government encourages foreign investment by simplifying business registration, offering R&D tax credits, and supporting startups through initiatives like Innovation Fund Denmark. Copenhagen is the best location for businesses, particularly in green technology and life sciences. Denmark has built its reputation as a country with the ease of doing business, and innovation attracts many foreign entrepreneurs.

United Kingdom

• Corporate tax: 25%.
• Investment index ranking: 13
• Population: 69.33 million
• Key location(s): London – global hub for finance and innovation

The United Kingdom remains a strong choice for starting a business, with a corporate tax rate of 25%. The UK has a well-regulated labor market with minimum wage requirements and protections for employees, including laws around working hours, sick leave, and anti-discrimination policies. Despite these regulations, labor in the UK is relatively affordable compared to other major European economies, especially in regions outside London. The government actively promotes foreign investment through programs like Innovate UK, which supports cutting-edge innovation, and the Enterprise Investment Scheme (EIS), offering tax relief for investors in early-stage companies. London is the best location for business, offering global connectivity, access to venture capital, and a diverse workforce.

Portugal

• Corporate tax rate: 21%
• Investment index ranking: 13
• Population: 10.22 million
• Key location(s): Lisbon – affordable and vibrant.

Portugal is an emerging hub for startups and entrepreneurs, with a corporate tax rate of 21% and a favorable tax regime for non-habitual residents. The government supports foreign investment through initiatives like Startup Portugal and grants for innovation projects. Lisbon is the leading business hub, offering a vibrant community and affordable living costs. Portugal’s Golden Visa program is also one of the most popular in Europe, granting residency to those who create jobs, or fund cultural and scientific initiatives. Even better, there is the Portugal D2 Visa, a residency visa designed for entrepreneurs, freelancers, and independent professionals who want to start or relocate their business to Portugal

Switzerland

• Corporate tax: Around 14.7% (varies by canton)
• Investment index ranking: 12
• Population: 8.86 million (2024).
• Key location(s): Zurich (finance, tech) and Geneva (international trade).

Switzerland, with an average corporate tax rate of 14.7% (depending on the canton), is a global leader in finance, pharmaceuticals, and technology. The Swiss government believes in foreign investment through regional tax incentives and support for innovation projects. Zurich is the best location for finance and tech businesses, while Geneva is ideal for international trade and organizations. While Switzerland does not have a Golden Visa, its high-quality infrastructure, political stability, and central location in Europe make it a top choice for businesses.

Poland

• Corporate tax: 19%; small businesses pay 9% on profits up to €2 million
• Investment index ranking: 24
• Population: 37.78 million
• Key location(s): Warsaw (corporate hub); Krakow (tech and outsourcing)

Poland offers a corporate tax rate of 19%, with small businesses benefiting from a reduced rate of 9%. It is known for its cost-effective business environment, low wage costs, and skilled workforce. The government promotes foreign investment through the Polish Investment and Trade Agency (PAIH), offering grants and incentives for projects in special economic zones. One of the best locations for business is Warsaw which has access to talent, while Krakow is a hub for tech and outsourcing. Poland offers affordable business setup costs and a growing economy which attracts many foreign entrepreneurs.

Benefits of Starting a Business in Europe

1. Access to a large market

Europe offers access to over 500 million consumers within the European Union (EU), one of the world’s largest trading blocs. Free trade across EU countries allows businesses to sell products and services without tariffs or significant restrictions.

2. Diverse opportunities

Europe has a wide range of industries, from technology and finance to tourism and manufacturing, providing opportunities for various types of businesses. The cultural and economic diversity across countries allows businesses to target different markets and needs.

3. Strong infrastructure

Well-developed transportation networks, advanced technology systems, and reliable utilities make it easy to set up and run a business. Digital connectivity is high, especially in countries like Estonia, which is known for its tech-friendly environment.

4. Skilled workforce

Europe has a highly educated and skilled workforce with strong expertise in fields like engineering, technology, and business. Many countries also offer programs to help businesses hire international talent.

5. Ease of doing business

Some countries, like Ireland and the Netherlands, have business-friendly regulations, low taxes, and simple company registration processes. Several European countries provide incentives for foreign investors and entrepreneurs.

6. High standard of living

Setting up a business in Europe often means enjoying a high quality of life, with good healthcare, education, and safety standards. A stable political environment in most countries ensures long-term business security.

7. Access to global markets

Europe’s central location makes it a gateway for trading with other major markets, including Asia, Africa, and North America. Other countries have free trade agreements beyond the EU, providing more opportunities for global business.

Requirements of Starting a Business in Europe

These are the general requirements for starting a business in Europe.

1. Choose a business structure: Common types include sole proprietorship, partnership, limited liability company (LLC), or corporation. The structure determines taxation and liability.
2. Register your business: File with the national or local business registry in the country of operation and provide necessary documents such as business name, legal structure, and purpose.
3. Tax Identification: Get a tax identification number (TIN) for paying taxes and complying with VAT regulations.
4. Open a business bank account: Most countries require a local bank account for financial transactions and initial capital deposits.
5. Meet capital requirements: Some countries have minimum capital requirements, depending on the business structure (e.g., €1 for German GmbHs, €3,000 for French SARLs).
6. Acquire necessary licenses: Check for industry-specific licenses or permits (e.g., food, healthcare, or manufacturing).
7. Comply with employment laws: Understand local labor laws, including employee contracts, benefits, and social security contributions.
8. Follow EU and local regulations: Comply with General Data Protection Regulation (GDPR) if dealing with customer data. Adhere to local trade, zoning, and environmental regulations.
9. Secure insurance: Many businesses need mandatory liability or industry-specific insurance.
10. Social Security contributions: Register for Social Security if hiring employees or as a self-employed entrepreneur.

Things to Consider Before Starting a Business in Europe

Starting a European business can be a great idea because it offers access to a large market, a strong economy, and skilled workers. The European Union makes it easy to trade across many countries, and some countries provide helpful benefits like tax breaks or funding for new businesses. However, to succeed, you must plan carefully and consider important factors like the market, local laws, and finances.

Here are five key things to consider before starting your business in Europe:

1. Market research

• Understand your target audience’s needs and preferences through surveys, focus groups, or market data.
• Study competitors’ strengths, weaknesses, pricing, and marketing strategies.
• Research market trends, including consumer behavior, technological changes, and regulatory updates, to assess your product or service demand.

2. Legal structure & regulations

• Select a legal structure (e.g., sole proprietorship, LLC, or partnership) based on liability, taxes, and ownership goals.
• Obtain required licenses or permits, such as health permits for food businesses or certifications for tech startups.
• Understand tax obligations, including corporate taxes, VAT, and regulations for operating in multiple countries.

3. Location

• Some European countries, like Ireland, the Netherlands, and Estonia, offer business-friendly environments with tax incentives and low bureaucracy.
• Evaluate costs such as office rent and living expenses, as major cities like London and Paris can be pricey, while smaller cities or rural areas might be more affordable.
• Consider proximity to your target market and availability of skilled labor, with cities like Berlin being known for tech talent and London for finance expertise.

4. Taxation & financials

• Understand corporate income tax rates, VAT, and startup tax incentives, like R&D deductions or investment credits.
• Set up accounting systems to ensure compliance and track financial health. Be aware of mandatory financial reports and disclosures required by local regulations.
• Explore funding options such as government grants, bank loans, and venture capital. Numerous European countries offer grants for innovation, green tech, or job creation.

5. Labor market & hiring

• Understand labor laws, including contract terms, working hours, minimum wage, paid leave, and employee benefits. These laws vary by country and affect payroll costs and operational flexibility.
• Research the local job market to determine the availability of skilled workers, especially in fields like tech, finance, or healthcare. Consider language requirements and the impact of hiring from abroad.

Explore Global Citizenship: Key Insights and Options

Navigating the complexities of citizenship, passport acquisition, and immigration can be a daunting task. Whether you're considering a move for business, personal, or security reasons, understanding your options is crucial. At Global Citizen Solutions, we specialize in providing clear, comprehensive guidance in these areas. Our expertly crafted articles offer deep insights and comparisons to help you make informed decisions.

• Exploring Citizenship by Investment: For those interested in acquiring citizenship through investment, our guide on citizenship through investment breaks down the process, benefits, and key considerations, helping you understand how this path might suit your personal and financial goals.

• Comparing Citizenship by Investment Programs: Choosing the right program is vital. Our comprehensive comparison of CBI programs worldwide provides a clear, side-by-side look at what each country offers, aiding you in finding the perfect match for your needs.

• Top Citizenship by Investment Programs: To further assist your decision-making, we've curated a list of the best citizenship by investment programs available. This resource is invaluable for anyone looking to understand which programs offer the most value, security, and benefits.

At Global Citizen Solutions, we're committed to helping you navigate the path to a new citizenship with ease and confidence. Explore our resources to gain a clearer understanding of your options and embark on your journey towards global citizenship.

Frequently asked Questions about the Best European Countries to Start a Business

Which European country has the best business environment?

Estonia, Denmark, and Ireland are known for their business-friendly environments, with low bureaucracy, competitive tax rates, and strong startup support systems.

What are the tax rates for businesses in Europe?

Tax rates vary: Ireland has a corporate tax rate of 12.5%, while Sweden and France have higher rates, ranging from 20% to 30%. Countries like Estonia offer favorable tax policies for startups.

What are the pros of starting a business in Europe?

Europe offers access to a large consumer market (500+ million people), competitive tax rates, skilled workers, and strong infrastructure.

What are the cons of starting a business in Europe?

High taxes in some countries, complex regulations, and expensive cities like London and Paris can be challenges.

Which cities are best for entrepreneurs in Europe?

Berlin, London, and Amsterdam are top cities for startups, while cities like Lisbon and Tallinn are emerging with lower operational costs.

What are the requirements for starting a business in Europe?

Generally, you’ll need to register with local authorities, obtain licenses, and follow tax regulations. Some countries, like Estonia, offer easier online registration.