Top European Countries for New Businesses and Why Entrepreneurs Are Choosing Them

As the business world becomes more globalised, entrepreneurs are seeking locations that not only provide favourable conditions for their companies but also offer a high quality of life. Europe, with its diverse range of countries and varying economic climates, is a prime destination for business ventures. In this post, we’ll explore some of the top European countries for new businesses and why entrepreneurs are increasingly drawn to them.

Key Factors to Consider When Choosing a Country for Your Business

When deciding where to establish your new business, it’s essential to consider several factors:

Business Climate: Taxation, ease of starting a business, and regulatory environment.
Access to Talent: Availability of skilled labour and a well-educated workforce.
Funding and Financial Incentives: Government grants, venture capital, and business-friendly policies.
Strategic Location: Proximity to key markets and regional stability.
Quality of Life: Cost of living, lifestyle, and work-life balance.

With these in mind, let’s take a look at some of Europe’s best business destinations.

1. Portugal

Portugal is rapidly becoming one of Europe’s hottest destinations for entrepreneurs due to its attractive tax incentives, digital infrastructure, and quality of life. The country offers the best of both worlds: a thriving business environment and a relaxed Mediterranean lifestyle.

Why Entrepreneurs Choose Portugal

Digital Hub: Lisbon, Portugal’s capital, is renowned for being a thriving digital hub, attracting remote workers and digital nomads from all over the world. The city is home to numerous co-working spaces and a diverse community.
Entrepreneur-Friendly Visas: The Portugal D2 Visa, which is designed for entrepreneurs, makes it easy for foreign nationals to start or relocate their business in Portugal. There are no minimum investment requirements or job creation conditions.
Tax Incentives: Portugal offers a relatively low cost of living while still providing access to the European Union. The country is ranked 7th on the Global Peace Index, making it a safe and attractive place for business.
Quality of Life: Portugal’s Mediterranean climate, affordable living costs, stunning coastline, and rich cultural heritage make it an attractive place to live and work. With cities like Lisbon, Porto, and Faro offering vibrant living conditions, entrepreneurs can enjoy a great work-life balance while running their businesses.

2. Cyprus

Cyprus has become an increasingly popular destination for entrepreneurs thanks to its low corporate taxes, strategic location, and cost-effective residency programs. The country offers a favourable business environment, with a strong focus on innovation and entrepreneurship.

Why Entrepreneurs Choose Cyprus

Low Corporate Tax Rate: Cyprus offers a corporate tax rate of just 12.5%, one of the lowest in the EU, alongside a variety of tax incentives for foreign investors.
Attractive Residency Programs: Cyprus is an appealing choice for foreign entrepreneurs seeking EU residency. The Cyprus Permanent Residency Program allows individuals to gain EU residency with an investment of just €300,000 in real estate. The program is straightforward, and residency can be obtained in a few months.
Tax Incentives for International Investors: Cyprus offers numerous incentives for foreign investors, including a 0% tax on profits from the sale of securities, capital gains from foreign properties, and dividend income. Cyprus is a preferred destination for holding companies because there is no tax on dividends or capital gains arising from the sale of subsidiaries.
Business-Friendly Environment: Cyprus is known for its investor-friendly laws, with no dividend tax and no capital gains tax on profits from subsidiaries.

3. Ireland

As a business hub and key player in the global economy, Ireland’s reputation as a prime location for entrepreneurship is bolstered by its low tax rates, access to top talent, and strong trade relations with both the EU and the US.

Why Entrepreneurs Choose Ireland

Low Tax Rates: Ireland’s corporate tax rate of 12.5% is among the most competitive in the world. This has attracted many multinational corporations, particularly in industries such as tech, pharmaceuticals, and finance. In addition, Ireland has a network of double taxation treaties with over 70 countries, further enhancing its appeal as a business base.
Skilled Workforce: Ireland boasts a young, highly skilled workforce, particularly in sectors like tech, pharmaceuticals, and software.
Trade Agreements: As an EU member and English-speaking country, Ireland benefits from strong trade relationships with the US, the UK, and other EU countries, making it a prime location for international companies.
Strong Start-up Ecosystem: Ireland has a thriving startup ecosystem, particularly in Dublin, which has become a global hub for tech and innovation. There is a wide range of government grants, funding options, and incubators supporting new ventures. The Irish government actively encourages innovation, particularly in sectors like fintech, biotech, and clean energy.

5. Malta

Malta, a small but highly strategic island in the Mediterranean, has earned a reputation as one of Europe’s most attractive destinations for business incorporation, particularly for those seeking tax advantages and international access.

Why Entrepreneurs Choose Malta

Low Tax Rates: Malta boasts a corporate tax rate of 35%, but the country offers a highly advantageous tax refund system. Foreign-owned Maltese companies can apply for refunds that bring the effective tax rate down to just 5%, the lowest in Europe. This makes it a prime choice for international businesses looking to optimise tax liabilities.
Investment Incentives: There is no withholding tax on dividends, and foreign-owned holding companies can enjoy tax exemptions, making Malta an attractive option for international businesses.
Strategic Location: Malta’s location in the heart of the Mediterranean gives it access to European, North African, and Middle Eastern markets.
Residency and Citizenship Programs: Malta offers attractive residency and citizenship programs, including the Malta Individual Investor Program (IIP), which allows individuals to obtain citizenship through investment. Additionally, the Malta Residence and Visa Program (MRVP) provides a pathway to EU residence for entrepreneurs willing to invest in real estate or government bonds.

6. Germany

As Europe’s largest economy and the world’s third-largest exporter, Germany offers a wealth of opportunities for entrepreneurs, particularly in innovation-driven sectors like technology, automotive, and engineering.

Why Entrepreneurs Choose Germany

Strong Economy: Germany is Europe’s largest economy and the fourth-largest in the world, with a robust infrastructure and a highly skilled workforce.
Innovation and R&D: Germany is a leader in innovation, particularly in industries like automotive, machinery, and renewable energy. The country invests heavily in research and development (R&D), making it an attractive location for startups and businesses that are focused on high-tech innovation.
Strategic Location: Germany’s location at the heart of Europe makes it an ideal place for businesses looking to expand into the EU market.
Export Opportunities: As the world’s third-largest exporter, Germany offers excellent opportunities for businesses that are looking to enter global markets. With established trade agreements, the country provides a solid foundation for businesses seeking to export goods and services worldwide.
Government Support and Funding: The German government offers a variety of funding programs to support business expansion and innovation. Companies that are starting, relocating, or expanding in Germany can access support from the European Regional Development Fund, as well as numerous grants and tax incentives.

Conclusion

Europe offers a wide range of opportunities for entrepreneurs looking to start a business. Whether you’re looking for tax incentives, a favourable business climate, or a strategic location, there’s a European country that aligns with your goals. Whether you’re drawn to Ireland’s low corporation tax, Portugal’s vibrant digital hub, or Germany’s innovation-driven economy, the continent is rich with options for new businesses.

If you are interested in learning more about forming a company in any of the above locations, contact the Vireon team today. Give us a call at +48 (0) 732 070 326 or fill out our contact form.