The escalating trade tensions between the EU and the US, as well as the EU and China have led to rising business, economic and financial volatility in the last several months.
Sticky-high inflation and relatively high interest rates have also contributed to the increasing uncertainty, while the ongoing cost of living crisis being seen in several parts of Europe has eroded start-up capital.
As such, choosing which European country to set up a new business can feel like an especially daunting task at the moment.
However, there is still a silver lining for founders, as the EU has been focusing more on ramping up its domestic production of goods and services, in an attempt to reduce its reliance on foreign countries.
This involves welcoming more small and medium enterprises (SME) by offering a number of financing and support schemes such as EIC Accelerator, Horizon Europe, Women TechEU, EIC STEP Scale Up, Connecting Europe Facility (CEF) and more.
The EU also has several knowledge tools such as the Your Europe Business Portal, Enterprise Europe Network and Erasmus for Young Entrepreneurs.
According to the European Commission, the EU has around 35,000 early-stage start-ups in 2025.
How easy it is to conduct business in any country means taking a few key factors into consideration. The World Bank’s Ease of Doing Business index has classified these into 10 parameters. These include:
Euronews looks at where in Europe founders could have a relatively easier time setting up a business in the current economic environment.
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Estonia has been one of the most welcoming EU countries for foreign founders, offering a very pro-business legal and economic framework, while also being highly digitised.
Its e-residency programme lets non-residents register their companies online, while taking care of their business needs digitally. It also allows them to make use of several Estonian government services from anywhere in the world.
Other business transactions such as tax filings and banking transactions can be carried out online as well.
It takes 15 minutes to set up a company, with 98% of businesses being set up online, according to Invest in Estonia.
The country’s tax system encourages reinvestment while also charging no tax on retained profits. Estonia also has relatively low bureaucracy, which makes it even easier to set up a business, while taking advantage of the EU’s single market and being strategically located for both Baltic and wider European markets.
Given the ongoing geopolitical turbulence being seen at the moment, having a location-independent business could prove to be a major advantage for new founders.
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The Republic of Ireland is another popular choice for starting a business in Europe, due to it being a high-income, very digitally developed economy. According to 1Office, smartphone usage has hit 90%, with household internet access also touching 92%, setting a good foundation for businesses with tech and digital products.
With Enterprise Ireland investing in about 200 start-ups every year, the country sends out a very strong, welcoming message to entrepreneurs worldwide.
According to the World Bank’s Doing Business in the European Union 2020: Ireland study, several Irish cities rank highly on many of the above parameters. Businesses can very rapidly enforce contracts and get electricity smoothly in Cork. Dublin also does well regarding these two things, as well as starting businesses. Waterford is most efficient in issuing construction permits, whereas Galway is best at registering property, as well as starting a business.
Ireland being a member of the European Union, OECD and eurozone, as well as using the euro and having English as one of the main languages, offers very attractive factors for European entrepreneurs.
Entrepreneurs from the UK, Iceland, Norway, Switzerland and EU do not need any permits or visas to set up shop in Ireland. The country also facilitates the remote company set-up and registering 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 about 72 countries so far.
Although Ireland has been struggling with a housing crisis lately, which has impacted businesses and foreign workers as well, the country still has a lot to offer new entrepreneurs.
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Bulgaria is a highly-favoured new business hub in Eastern Europe due to the relatively low bureaucracy involved in setting up a company, which takes only up to a couple of weeks. Administration costs are also very low, compared to most of Europe, as well as the corporate tax being only 10%.
Foreign companies have no legal restrictions on buying land in the country, and only have to pay operational costs after registration. EU entrepreneurs can also avail of lower cost labour, highly-skilled and multilingual labour and a relatively low cost of living, while still having access to the European Single Market due to Bulgaria being part of the EU.
Bulgaria’s geopolitical location in the South East of 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 needs to be taken into account while considering what type of business to set up and which part of the country to be based in.
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According to the World Economic Forum, the Netherlands is the fifth largest economy in the European Union, with a gross domestic product of about $990.6 billion (€918.7 billion), accounting for about 5.96% of the EU economy.
Located very conveniently in Western Europe, Netherlands has an extremely cosmopolitan, highly educated and skilled workforce. The Dutch government provides a raft of business support schemes and tax incentives to new businesses. Although the corporate tax rate is a little higher than some other European options at 25.8%, a number of business owners could find it worth the price, for the location and market access.
Incentives include an entrepreneur allowance, as well as a 30% ruling. This allows employers to pay 30% of foreign talent’s salaries without tax being deducted. Furthermore, the government supports research and development, as well as innovation by refunding a variety of costs for companies conducting scientific research, or developing new innovative products, amongst others.
The Netherlands is especially favoured by entrepreneurs with technologically advanced companies such as robotics and artificial intelligence, as well as retail.
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Denmark is another country where founders can set up a business with relative ease. It is consistently ranked highly by the World Bank in terms of ease of doing business, often bagging one of the top 5 spots worldwide.
Registering a company in Denmark is relatively simple, with founders able to complete the process online. The process is quick and can sometimes take only a few hours.
Denmark also offers a stable economy, along with a highly-skilled workforce and robust infrastructure. The labour market is relatively flexible, with lower hiring and firing costs.
The country is reputed for its trust-based business culture, which can slash transaction costs, as businesses can cut down on complicated verification processes, extensive legal contracts and security measures.
Denmark has an attractive corporate tax rate as well, set at 22% for most organisations.
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According to the British Business Bank, about 360,000 new businesses are set up in the UK every year. Forming a company is also relatively quick, easy and cheap, with postal applications being processed within eight to 10 days and online applications, within 24 hours.
With one of the most diverse economies and workforces in Europe, the United Kingdom also has measures to support businesses in their first few years, when profitability is low. It also provides tax relief at the end of a business’ life, with regards to the revenue gained from selling assets.
Furthermore, the UK has a strong taxation and legal system, with efficient processes and a corporate tax rate of 25% for all limited companies. With a third of adults now having some kind of higher degree, the workforce is highly skilled and adaptable.
A number of crowdfunding, venture capital and angel investment opportunities are also available for entrepreneurs, as well as government grants, funding and advice, through various government departments.
