Best EU country for business 2024
There is no single ideal jurisdiction in the world for starting a business that would suit everyone. But there are countries whose legislative and tax system is ideally suited to your particular case.
Very often we are approached by clients with the request “Quickly register a company in the EU and pay low taxes”. But during a consultation with a specialist it turns out that, for example, the client also wants to stay in the country of business for a longer period of time or permanently reside there with the possibility of obtaining EU citizenship, which means that it is necessary to additionally apply for a long-term residence permit abroad.
In view of this situation, we always recommend approaching the choice of a country for starting a business comprehensively, taking into account both corporate, tax and immigration laws together with the goals and objectives that the entrepreneur wants to achieve.
We offer company registration services in different European countries
Best European country for business
Which country in Europe to open a business in 2024 and pay low taxes
The number of companies set up in EU countries has increased markedly over the past few years.
It is directly related to the desire to work and do business in an economically stable and prestigious jurisdiction with access to the international market, with the opportunity to minimise taxes and obtain a long-term residence permit for the whole family through business immigration.
Registering a company in the EU in 2024 will be beneficial for both large companies and private entrepreneurs who want to optimise their business costs.
Why companies register in EU countries
- Stable legal protection.
Companies registered in the EU operate in an atmosphere of positive business reputation with the support of the state. Many European countries also have special subsidies, tax rebates and SME development programmes.
- Open a business in the EU and pay less tax.
Creating the right corporate structure in a particular country can save you and your company money. After all, it is important to optimise your tax burden and reduce the amount of tax you pay, not to avoid paying tax.
- Register a company and open a bank account in Europe.
It has long been known that the requirements and procedures for opening accounts in European banks are becoming stricter every year. Therefore, if you decide to register a
company in the EU, you will have a real opportunity to open a bank account in Lithuania, Spain, Switzerland, Portugal, Cyprus, Malta and other European countries.
- Business development and entering the international market.
Having a company in the EU is always prestigious. Foreign companies and counterparties favour cooperation with partners from more developed and economically stable countries that are not considered offshore.
- Access to grants and programmes for business development.
Many countries have special programmes for the development of start-ups, small and medium-sized businesses, as well as low business
- Open a company and get a residence permit.
Registration of a company is the basis for business immigration to European countries. If certain legal conditions are fulfilled, the entrepreneur and his family can obtain a long-term residence permit and move to the chosen country.
Advantages of registering a business in Europe
Running your own business in the European Union has many advantages, including the following:
- Low tax burden: in Europe, there are various regimes and incentives to minimise the tax burden;
- The possibility of not paying double taxes in most countries: thanks to treaties between countries, entrepreneurs who start a company in one of the EU countries often avoid double taxation of their income.
- Developed economic environment: entrepreneurs who start a company in Europe have access to a wide range of tools and services that allow them to effectively manage their finances, ensure liquidity and access credit resources;
- Overseas account: gives access to European banking systems, which are characterised by a high level of service, security, and confidentiality;
- Stable political and economic systems: this creates favourable conditions for business development;
- Prospects for a business visa or residence permit: many European countries have programmes that allow entrepreneurs to obtain different types of visas or residence and work permits;
- Internationalisation: registering a company abroad allows access to the European market, which is one of the largest and most developed in the world.
- Entrepreneurs can find new clients and partners, expand the geography of their business and increase its profitability;
- Prestige: the desire to register a company in Europe is associated with high quality products and services, innovation and social responsibility. You can always use this fact to enhance your company’s image and attract new customers or investors.
What you need to know before registering a business in the EU
When choosing a jurisdiction for business registration, we recommend that you consider the following criteria:
Taxes are always one of the main issues in choosing a country for starting a business, to which we pay special attention. It is advisable to choose a jurisdiction where taxation is efficient and transparent, or generally taxation is less than in the home country.
However, there are many factors to consider when choosing a country to start a company, including: incentives for newly established companies, use of double tax treaties, incentives for non-resident companies, incentives for certain types of companies (partnerships), and limited income incentives for small and medium-sized businesses.
And most significantly, you cannot forget what taxes will be paid by the business owner in the country where he is a tax resident.
Therefore, when choosing a jurisdiction, low-tax jurisdictions in Europe are now being considered, rather than offshore jurisdictions, which offer the greatest number of tax benefits for both the business and the beneficiaries (capital gains tax, dividends, interest and royalties tax).
Costs of business registration and further maintenance of the company
When choosing a country for business registration, it is important to be aware in advance of the minimum required authorised capital for different types of companies, the average salary for hiring employees, the cost of office rent, the cost of banking services, etc.
No foreign jurisdiction on blacklists
Blacklists are maintained by international organisations as well as individual countries. For example, if a jurisdiction is included in the EU blacklist or is considered offshore, it complicates the country’s financial relations with the EU. In this case, European banks will be forced to conduct additional checks when dealing with companies registered in EU blacklisted countries.
Fast and convenient air connections to the country of residence
This factor is also very important. For example, you decide to open a company in Hong Kong, Singapore or Seychelles and the remoteness of these jurisdictions may create certain difficulties for the entrepreneur.
Best European countries to start a business in 2024
In today’s economic era, Europe offers a unique mix of stability, innovation and entrepreneurial opportunities. Considering where to start a business is a key step that can determine the future of your venture. The lawyers and tax advisors at Regulated United Europe would like to take an in-depth look at the countries in Europe that offer the maximum advantages for business people.
|Corporate Income Tax
|Value Added Tax (VAT)
|Personal Income Tax
|up to 40%
|5% – 35%
Opening a company in Bulgaria offers a number of advantages that make this country attractive to entrepreneurs and investors from all over the world. Here are a few key aspects that explain Bulgaria’s attractiveness for business:
- Low taxes: One of the most significant advantages is the low corporate tax rate, which is one of the lowest in the European Union. This reduces the overall tax burden on businesses, making them more competitive.
- Strategic location: Bulgaria is located at the crossroads between Europe and Asia, making it an ideal location for companies looking to expand their market in both directions.
- Simplified company registration procedure: The Bulgarian government has simplified the company registration process, reducing time and bureaucracy, making it much easier to start a business.
- Access to EU markets: As a member of the European Union, Bulgaria provides businesses with access to the huge EU market, which is a great advantage for export-oriented companies.
- Skilled labour: Bulgaria offers highly skilled and relatively inexpensive labour, making it attractive to companies looking for efficient workforce.
- Developed infrastructure and IT sector: The country continues to invest in infrastructure and technology development, especially in the IT sector, which is experiencing significant growth and offers many opportunities for technology start-ups and IT companies.
- Political and economic stability: Bulgaria demonstrates stability in political and economic relations, which creates a favourable environment for long-term investments and business development.
- Attractive investment climate: The country offers various incentives and support for foreign investors, including grants, incentives and other forms of support aimed at attracting foreign capital.
Overall, Bulgaria is an attractive option for starting and developing a business due to its combination of low taxes, strategic location, simplified company registration procedures, access to EU markets, skilled labour, developed infrastructure, political and economic stability, and an attractive investment climate. These factors make Bulgaria one of the most promising destinations for conducting and developing international business.
Estonia is known for its innovations in digital government and e-business. The country offers one of the most advanced IT infrastructures in the world, making it an ideal location for startups and technology businesses. Estonia, a small country in the Baltic region, has made giant steps in recent years in developing its economy and creating a favourable business environment. This has led to increasing interest from international investors and entrepreneurs in starting companies in Estonia. Let’s take a look at the key aspects that make Estonia attractive for business.
- Digital innovation and e-Residency: Estonia is a digital leader in Europe. It was the first country in the world to introduce the concept of e-Residency, which allows foreign entrepreneurs to register a company in Estonia and manage it remotely. This system ensures simplicity and transparency of business processes, minimising bureaucratic hurdles.
- Tax policy: Estonia offers a unique and favourable tax system where corporate tax is paid only when profits are distributed. This incentivises reinvestment of profits and company growth. This system is especially favourable for startups and technology companies focusing on development and scaling.
- Strategic geographical location: Located at the crossroads between Eastern and Western Europe, Estonia is a strategic point for accessing markets in Scandinavia and other Eastern European countries.
- Highly skilled labour force: Estonia offers access to an educated and multilingual workforce. The country has a high level of digital literacy, making it an ideal location for technology and IT companies.
- Stability and innovation in the business environment: Estonia demonstrates political stability, low levels of corruption and a commitment to innovation. The government actively supports business development, particularly in the areas of high technology and environmentally sustainable development.
- Support for start-ups and innovative projects:
Estonia has a number of support programmes for start-ups and innovative projects. This includes grants, funding and support at various stages of company development. The country also attracts the attention of venture capitalists interested in innovative enterprises.
- Developed infrastructure and technology: Estonia has a modern infrastructure and one of the most developed digital communication systems in the world. This provides companies with high speed and quality internet connection, which is critical for many modern businesses.
- Attractive investment climate: Thanks to its stability, innovative ecosystem and supportive business climate, Estonia attracts significant foreign investment. Investors appreciate the transparency and efficiency of the country’s economic environment.
By starting a company in Estonia, entrepreneurs gain access to an innovative economy, favourable tax system, skilled workforce and enhanced opportunities for business development on a European and global level. Estonia offers a unique combination of technological progress, stability and business support, making it one of the most attractive countries to start a company in Europe.
Special tax incentives are available to international companies in Cyprus. Low tax rates are also available to businessmen-citizens of Cyprus. These facts allow to call Cyprus a tax haven. Directly from offshore zones, tax havens differ in the fact that tax incentives in tax havens apply not only to foreign companies, but also to all local companies.
A company may be managed and controlled from an office in Cyprus and still be non-resident.
1.Tax on the company’s profits from domestic operations – 10%
2.Tax on the company’s profits earned outside the country – 0%
- VAT – 5-8% (the Company is exempt from VAT if the recipients of goods and services provided by the Company are non-residents of the European Union)
4.Tax on dividends – 0%
5.Income tax on profit from trading activities on the stock market – 0%
6.Capital gains tax – 0%
(A capital gain is when assets are sold at a higher price than was paid when they were acquired, or when they produce some kind of additional value, such as interest or dividends. Capital gains tax is only levied on the difference between the current value and the initial value)
- When registering a company, it is obligatory to pay a state fee of 0.6% of the declared authorised capital.
- At the end of August 2011, the Cyprus Parliament voted to amend the Companies Law. The outcome of the vote was the introduction of an annual fee of €350 to be regularly paid to the Registrar of Companies. This fee is required for companies to remain in “good standing” and on the Register.
A company registered in Cyprus provides audited financial statements to the Tax Authority and the Central Bank of Cyprus.
- Cyprus company is very suitable for investing. There are many offshore banks available to investors, which are not taxed on the interest rate.
- The confidentiality of offshore account holders of offshore banks, trusts and international companies is strictly guarded in Cyprus offshore.
- Holding companies are not subject to dividend tax and capital gains tax on the sale of subsidiaries.
- The Republic’s status as a serious financial centre, and combined with EU membership and the highest standard of service.
- There is no exchange control.
(Currency control is an integral part of the currency policy of the state in the field of organisation of control and supervision over compliance with the legislation in the sphere of currency and foreign economic operations:
– control over the movement of currency valuables across the customs border; – control over currency transactions; – control over the fulfilment by residents of their obligations to the state in foreign currency).
- Tax treaties with more than 50 countries.
The main advantages of a double taxation treaty:
The amount of tax on dividends 5% or 10% (if less than $100,000 is invested in the subsidiary), interest (0%) and royalties (0%) remained unchanged.
Exchange of information with other countries
The agreement allows for the exchange of information between other EU countries and Cyprus, even if the information is not required for tax purposes of these countries. However, the country from which the information is requested is not obliged to provide the information if it is a violation of the law or public interest of that country. It is also not allowed to request information that is not publicly available in that country.
It should be noted that the Cypriot tax authorities in most cases do not have information on the beneficiaries of private companies or any other information material. For these reasons, Cypriot companies registered through nominees and information about the real owners is confidential.
In this regard, persons whose information is withheld must be properly accumulated in the files of the registration agents. Professional secrecy cannot be used as an excuse for not providing information about these persons.
However, the conditions under which professional secrecy may be lifted will depend on state law. Thus, disclosure will not be a simple automatic administrative procedure, but will require the intervention of local government officials.
Opening a company in Cyprus can be a powerful step to expand your business and explore new markets. Because of its unique advantages, Cyprus offers great opportunities for growth and success in international business. However, success depends on careful planning, an understanding of the local business culture and effective resource management.
Ireland has established itself as Europe’s leading technology hub. The country attracts many international corporations due to its low corporate tax, highly skilled population and close ties with the European Union, the UK and the US. Ireland has become one of the most attractive places to do business in Europe over the past decades. There are several key reasons why many international companies and entrepreneurs choose Ireland to start their business:
- Low corporate tax rate: Ireland offers one of the lowest corporate tax rates in the European Union, making it attractive to international companies.
- Access to the European market: As a member of the European Union, Ireland provides businesses with access to the EU single market, which facilitates trade and expansion into European markets.
- High level of education and skilled workforce: Ireland is known for its high level of education and skilled and multilingual workforce, which is a key factor for many companies.
- Stable economy and political system: Ireland has a stable economy and a democratic political system, which creates a favourable environment for doing business and attracting foreign investment.
- Well-developed infrastructure: The country has a well-developed infrastructure, including modern transport and technology networks, which is important for operational business.
- Government support and investment incentives: The Irish government actively supports business by offering various investment incentives, grants and tax breaks, especially for high-tech and export-oriented industries.
- Friendly business climate: Ireland has a reputation as one of the most business-friendly countries in the world, making it easy for foreign companies to establish and expand their businesses.
- Strong focus on innovation and technology: Ireland is actively developing sectors related to high technology, research and development, making it attractive to technology start-ups and research companies.
These factors combine to make Ireland one of the most attractive places to start and grow an international business, particularly in the high-tech, financial services, pharmaceuticals and IT sectors.
Companies incorporated in this jurisdiction are widely used to set up holding companies and investment funds as they are exempt from major income, property and dividend taxes.
The registered office of the “offshore” company must be located in Luxembourg.
- The offshore company is obliged to pay 5% of its profits to a reserve fund in Luxembourg. This is not a permanent payment: it will be made until the total amount reaches 10% of the issued capital.
- An annual fee in the form of state duty shall be paid in the form of 0.2 % of the authorised capital.
- Non-resident companies pay corporate tax only on profits from domestic operations. Foreign profits of companies are not subject to tax.
The corporate tax rate consists of three parts. The general income tax rate is 21%. The contribution to the unemployment fund is calculated at 4% of the general rate, i.e. 0.84%. The municipal tax rate is set by the municipality. For example, in the capital it is 6.75%. Thus, the total corporate income tax rate of a Luxembourg city taxpayer is 28.59%.
- Outgoing dividends are generally subject to a 5% withholding tax. A different withholding tax rate may be stipulated by a double tax treaty.
Dividends distributed by Luxembourg holding companies, investment funds or securitisation undertakings are not subject to withholding tax.
Also, no withholding tax is withheld if the shares have been held by the dividend recipient for at least one year and their value is at least €1.2 million. The dividend recipient must be a resident of Luxembourg, the EU or a fully taxable resident of Switzerland.
- Dividends received from abroad by a resident company are exempt from taxation if the participation in the capital is at least 10 per cent or the purchase price of the shares is at least EUR 1.2 million.
Types of registered foreign companies and their taxation peculiarities:
SOPARFI is a financial holding company. Luxembourg holding companies are not subject to double tax treaties.
Zero tax on dividend payments applies to dividends paid to a subsidiary/parent company in the EU. Dividend payments to non-EU countries are always subject to a certain income tax rate, which for comparable taxable income corresponds to the Luxembourg corporate tax rate, but the tax can be reduced through a tax treaty exemption (in practice, usually a minimum of 15%).
Interest payments are not subject to source tax.
SIF – Specialised Investment Fund A specialised investment fund based in Luxembourg is in principle exempt from income tax. The subscription tax is 0.01% per annum. The basis for calculating the subscription tax is the total net asset value of the specialised fund. The company is liable to a one-off capital tax of €1,250 payable on incorporation. SICAR – company with risk capital investments (Authorised capital of at least EUR 1mn) Annual capital turnover tax of EUR 1,250. Corporate tax 29.63%. There are no restrictions under double tax treaties. Profit distributions are not subject to source tax. Income from securities is exempt from tax. Proceeds from the liquidation of a company are not taxed (for non-resident participants)
Luxembourg does not tax profits generated by offshore bank accounts. An offshore Luxembourg bank account is a guaranteed means of capital protection. All information in offshore bank accounts in Luxembourg is considered confidential and may not be disclosed without the express authorisation of the bank account holder.
Luxembourg offers unique business opportunities due to its stable economy, favourable tax system, strategic location, quality financial services and high standard of living. These factors make it an attractive location for international investors and entrepreneurs seeking to expand their operations or enter the European market.
However, business success in Luxembourg requires careful planning and understanding of the local environment. This includes choosing the best legal form for the company, strategic planning, complying with regulatory requirements and proactively engaging with local partners and regulators.
Overall, Luxembourg offers a favourable environment for business development, backed by a highly skilled workforce, an innovative economy and a stable legal system. This makes it one of the most favoured destinations for international business and investment.
In Malta, it is possible to incorporate a closed and a public limited company. The minimum share capital of a public company is €46600 and €1200 for a private company. At the time of incorporation, at least 25 per cent of the capital of a public limited company and 20 per cent of the capital of a private limited company must be paid up.
Profits earned by a resident company, whether in Malta or abroad, are subject to income tax at the rate of 35%. However, Malta does not impose tax on dividends, interest and royalties remitted abroad (no withholding tax) and Malta has no transfer pricing or thin capitalisation rules.
(transfer pricing-the sale of goods or services to interdependent persons at intracompany, non-market prices. They allow the redistribution of the total profits of a group of persons in favour of persons in lower tax states. This is the simplest and most common scheme of international tax planning aimed at minimising taxes paid;
thin capitalisation – when the company’s activities are financed by borrowed funds).
Value Added Tax is levied on the sale of goods, works and services in Malta. The VAT rate on the island is 18%. Some goods are subject to preferential rates of 5% (e.g. printed publications, hotel services) and 0% (medicines and foodstuffs). There is no property tax and there is no turnover tax on the transfer of shares in companies owned by non-residents. Malta also has no exchange control legislation and a Maltese company can conduct its economic activities in any currency in the world.
It would seem that Maltese taxation is quite severe and the corporate income tax rate does not suggest that Malta is a low tax jurisdiction. However, this is not the case. The fact is that non-resident companies in Malta are entitled to a refund of taxes paid, which allows us to talk about the lower level of taxation in Malta compared to most countries in the world.
In order to claim a corporate income tax refund, a foreign company must be registered in Malta as a trading or holding company (deriving its income from trading activities or from participation in other organisations, respectively).
In the tax accounting of a Maltese company, the income earned by it must be recorded in one of four tax accounts: “foreign profits”, “Maltese profits”, “profits from immovable property”, “non-taxable income”. Each type of income is taxed according to its own rules. The final amount of tax is recorded in the fifth account “final tax”.
Example. Consider the two most common cases: a Maltese company derives profits from trading activities abroad and from participation in other companies. In either case, these profits are subject to statutory tax at 35 per cent, but the Maltese shareholders are entitled to claim a refund of the tax taken from the dividends distributed. The refund rules differ for different types of income.
If a Maltese company derives income from trading activities outside Malta (and the term “trading” includes both the direct purchase and sale of goods and the provision of services), its shareholders are entitled, upon receipt of the dividend, to apply for a refund of 6/7th of the tax previously paid in Malta. Therefore, the effective income tax rate will be 5 per cent.
A Maltese company receiving dividends from shareholdings or capital gains (interest, royalties) may declare the profits and pay tax at the rate of 35 per cent. Once the dividends have been distributed to the shareholders, the latter can apply for a full refund (100 per cent) of the Maltese tax previously paid.
In order for a Maltese company to qualify for the exemption, the so-called “qualified participation” criterion must be met. A company is considered to be a qualified participant if it holds at least 10 per cent of the shares in a foreign enterprise.
Since 2007, the tax refund system has been extended and is now applicable to all shareholders, regardless of their residence or domicile;
Malta’s tax legislation has been harmonised with EU legislation. A Maltese trading company may now trade in Malta provided that the income from that trade does not exceed 10% of the company’s total turnover/income. Consequently, 90% of the company’s total turnover/income must originate from overseas sources. Following the refund of the tax described above, the shareholders of the Maltese company are left with a globally effective income tax rate of 5%.
Companies incorporated in Malta must file an annual financial statement with the Registrar of Companies. The names and addresses of the company’s directors and shareholders are publicly available information.
Malta has double tax treaties with 41 countries. In order to obtain tax exemption under a bilateral treaty, a company must prove to the tax authorities that its income is derived from foreign sources and that it has already been taxed abroad.
Malta offers unique business opportunities due to its favourable tax system, strategic location, progressive regulatory environment and high standard of living. Overall, Malta represents a promising location for international business development and investment, especially for companies looking to expand into the European and Mediterranean markets.
With all these advantages, Malta emerges as an attractive jurisdiction for international business, offering a unique combination of financial advantage, strategic location and quality business environment. This makes the decision to incorporate a company in Malta strategically justified for those businesses seeking dynamic growth and international development.
Advantages of registering a business in Europe
A business registered in a European country has a number of undeniable advantages. Favourable conditions are supported by many factors.
- The company will operate in an economically stable and prestigious country with a high business reputation. Governments in many EU jurisdictions offer various subsidies. Companies in authoritarian states in Europe are not questionable;
- A well-developed system of state support for business: effective company development programmes, tax incentives, grants and loans on good terms;
- The possibility of offshoring is excluded, but it is possible to open accounts in European banks, including Swiss banks;
- Tax planning opportunities – tax rates in many countries have been reduced to acceptable levels. When considering options, one should be interested in incentives for new companies, the existence of double tax treaty practice, partnerships, and the prospects for medium and small businesses;
- Preference should be given to low-tax states that are interested in the inflow of foreign entrepreneurs and provide the maximum number of benefits for them;
- The prestige of the company will become a real advantage – a European company is more trusted in many countries. The market and partnership with the EU increases your credibility in the international environment;
- The laws of most countries provide for the granting of residence permits and even citizenship to persons who successfully develop a business.
Before starting a business abroad, it is important to consider many factors. Start by choosing a country. Make sure it is possible to enter the country of registration for a long term or permanent residence. Start-up capital will not always be required immediately – some jurisdictions simply require you to confirm that you have the necessary funds.
When thinking about what kind of business to open in Europe, study the industries of the countries you are interested in, which need development and support. This will allow you to choose the most favourable option for doing business in Europe.
Requirements for starting a company in Europe
Each country has its own conditions based on regulations and legislation, but there is a set of general rules that will have to be considered regardless of jurisdiction.
- company name, registered and unique;
- documents on business registration in your home country;
- a list of the company’s officers;
- the name and address of the representative in the selected country;
- list and number of shares, if such item is provided for;
- Company format and authorised capital in accordance therewith;
- additional financial information (assets and other);
- articulated goals and direction of the company;
- confirmation of the company’s good reputation;
- Some countries will require a certificate of no criminal record in the country of residence.
The applicant pays the fees in the amounts stipulated by law and waits for the decision for the time specified in the regulations. It is also necessary to either study local laws on your own or consult a lawyer – this will help to avoid violations.
Tax legislation requires special attention, especially if you have plans to provide services not only in the country of registration. It is important to know in advance at what rates VAT will be charged.
How to register a company in Europe in 2024
When selecting a country, you need to look in detail at the main factors that will affect the success of the venture:
- political and economic stability;
- relation to intellectual property rights;
- desirable lines of business;
- local mentality and business etiquette.
Registering a company in Europe can be done in several steps, each of which is accompanied by a study of the legal aspects of the chosen country. It is also important to collect and correctly draw up a number of documents, the list of which varies from country to country. Errors and inaccuracies in the collected documents may lead to prolongation of the process and additional difficulties.
Is it profitable to open a business in Europe
The policy of the EU states is aimed at creating optimal conditions for foreign entrepreneurs, who not only earn money themselves, but also boost the growth of the economy of the chosen country. The benefits of starting a business in the EU are described in more detail below:
- Reducing the tax burden. The fiscal system is usually considered as the most important factor when looking for a country to start a company. Small and medium-sized businesses benefit from lower tax rates and various incentives from the government. Bulgaria, for example, has a corporate income tax rate of only 10 per cent, which is why many people consider it for business immigration.
- State support. The EU provides funding in the form of loans and grants to a wide range of projects and programmes in areas such as education, health, consumer protection, humanitarian aid and others. The beneficiaries (persons receiving support) may vary depending on the key areas of each project and the priorities set by a particular member state. The purpose of funding is to motivate job creation, develop business competitiveness, stimulate economic growth and improve the quality of life of citizens.
- The European Union makes a significant contribution to the global economy, being the largest market and leading trading partner for 80 countries. In comparison, just over 20 nations work with the United States. Because of this, registering a business in the EU contributes to revenue growth, given that a company can be based in one country and from there expand its influence throughout the EU.
There are also certain complexities to consider when deciding to open a company in Europe:
- Availability of start-up capital. Some European countries require a foreigner to confirm that he has enough money to develop his own business in the EU. Some European Union states require that the authorised capital be paid in full when registering a European company.
- Tax codes and issues of compliance with them. Setting up a legal entity abroad implies studying taxation peculiarities, European and regional rules of doing business. For example, in some countries, opening an office for more than 6 months may require the entrepreneur to file an income tax return before the established period, and otherwise a fine is imposed.
- Business licences and business permits. To be able to start a business in Europe, you should familiarise yourself with the requirements for foreigners carrying out business activities. There are the most common licences and permits that are required for all businesses and without them the business owner risks administrative or criminal liability.
How to open a business in Europe in 2024
In order to start a business in an EU country, a foreigner will need:
- familiarise yourself with the current regulations for business activities and requirements for business immigrants, visit the webpage of the relevant national contact point for setting up a company in a specific European country;
- choose a country for starting a business and its legal form;
- prepare and submit documentation for an EU business visa to the embassy/consulate of your place of residence;
- fulfil the requirements for registration of a European company.
Forms of companies for starting a business in Europe
The foreigner should choose the legal form of business that suits his/her strategic and operational objectives. In Europe, the most popular are sole proprietorship, partnership and limited liability company.
Individual entrepreneur (IE)
This is the easiest way to start a business in the EU. Registration is simple and the foreigner only needs to keep basic financial records. The sole proprietor receives all profits less taxes, but is personally liable for all debts. Each EU state has developed its own laws, regulations and administration rules for sole proprietors.
This form of entrepreneurship is established by signing a formal agreement between two or more parties (legal entities and individuals) planning to conduct business together. The partnership agreement clearly specifies the scope of authority, principles of profit distribution and obligations between the participants. There are 2 types of partnership: general (full), where all partners assume responsibility for possible losses, debts and other obligations of the company, and limited (limited partnership), where some of the participants are only investors without the right of control and responsibility.
Limited Liability Company (LLC)
This form of business can be chosen by different types of business entities such as trusts, corporations, and individuals. LLCs do not put the assets of their shareholders at risk by separating personal liabilities from those created by the company. The establishment of a limited liability company in Europe often requires the preparation of incorporation documents, the deposit of a minimum share capital, and registration with the Commercial Register. The management of the LLC is usually entrusted to the members (directors and shareholders), but in some cases the decision-making power in the company may be delegated from the founders of the business to hired managers.
Opening an LLC in Europe offers many advantages, the most attractive of which is the limited liability of the owners. This means that in case something goes wrong, the owner will be liable for the company’s debts up to the amount of the authorised capital. Another important advantage of choosing a limited liability company is the capital that is required at incorporation. Many European countries have reduced the authorised capital requirements for this type of company. One of the best examples in this case is the Netherlands: those who want to open a Dutch limited company only need €1 as authorised capital. Of course, the total costs will be higher, but the Netherlands remains one of the cheapest European countries to start a company.
It is also useful to know that the requirements for registering such a company are virtually the same in all European countries and relate to the number of shareholders, the management of the company and the residency of the directors. The minimum number of shareholders is usually 1 or 2, as the directors do not necessarily have to be residents of the country in which the company is registered.
Which form an entrepreneur chooses will depend on his business goals. Liability, taxation, control and capital increase are just some of the issues that a foreigner needs to study before deciding to start a European company. The assistance of a professional lawyer is necessary to assess all the factors on which the choice of business organisation is based.
Documents required to open a company in Europe
To open a company or start production in Europe, a foreigner will need the following documents:
- copies of the applicant’s foreign and national passports;
- business visa;
- certificate of incorporation of the company;
- letters of recommendation from the bank where the foreigner has an account;
- business licence;
- CV and photo of the applicant;
- legal address lease agreement.
The exact documentation that a foreign entrepreneur needs depends on the chosen European country and the form of business organisation.
The procedure for setting up a company depends on the chosen European country, but there are some common points. Company registration usually takes 1-2 weeks. Opening a business in Italy, Denmark, the Netherlands, Poland and Portugal on a personal visit takes 1-2 days depending on the field of activity. Most countries also have a centralised body that handles all administrative procedures. For example, Denmark has the Danish Business Authority and France has a registration centre (Centre de Formalités des Entreprises, or CFE). One important aspect of registering a company is choosing a unique name. Special authorisations may be required for the use of certain words. For example, in the Republic of Italy, words such as “Italy” and “international” need to be approved. A foreigner will also need:
- obtain a registered office in the country where the business is to be conducted;
- to open an account in a European bank, through which the payment of the authorised capital of the company will be made if necessary;
- verify the need to obtain a business licence to operate;
- to register with the trade register of companies.
If the foreigner is not sufficiently familiarised with the process, company registration becomes a time-consuming task for him/her. If the application to set up a company in Europe is not properly completed, the relevant authority will contact the foreigner and request additional documents, which will slow down the process. This delay may hinder the intended plans, especially if the founder of the business in Europe is abroad. Therefore, it is advisable to contact local law firms or international business consultants who can register a company by proxy without the need for clients to be present, saving a lot of time, energy and money.
Buying a ready-made business in Europe
In addition to setting up a new company, it is also possible for a foreigner to acquire an existing company. This option has its own advantages:
- a company with a positive financial history has a better chance of winning a government tender or obtaining a loan;
- large corporations mainly co-operate with long-established enterprises whose previous operations can be verified;
- In some European countries, such as Germany, buying a ready-made company is easier and faster than starting a new one.
There are also certain risks when buying a ready-made business in Europe. When buying a company, a foreigner should be cautious and carefully check the company’s history for outstanding debts or pending litigation. Below are 6 basic steps to take when buying a business.
- Obtaining professional advice. Qualified support is important during the process of negotiating with the seller, valuation and purchase of the company, so it is advisable to consult a local lawyer first.
- Request for Information. To analyse, request financial records from the current owner of the company; lists of employees sorted by salary and length of service, customers and suppliers, equipment and other business assets; details of all major contracts; and data on debts and liabilities.
- Conducting an analysis. Before providing details of the business, the seller may insist on a non-disclosure agreement. Any documents that the foreigner is asked to sign at this stage should be shown to a lawyer to ensure that they do not imply unspecified obligations. When researching company details, available government databases can be used to verify information. Checking public sources will show, for example, whether there are any liens on business assets, unpaid taxes, pending litigation or human rights complaints, and whether the seller actually owns the property being disposed of.
- Agreeing the terms of the transaction. It must be clearly stated who the buyer and seller are, whether shares or assets will be acquired, what the value is, when and how payment is to be made.
- Discussion of additional clauses. The buyer may propose to include separately agreed clauses in the contract, the number of which will depend on the risks associated with the business. For example, insist on signing a “Non-Competition Agreement” to avoid the seller setting up a similar company later.
- Preparation of legal documentation. The buyer is usually responsible for putting together a package of documents that is sent to the seller’s lawyer for review before finalisation. There is a fairly simple basic document used to record the main aspects of the transaction at an early stage – the “Letter of Intent” or “Schedule of Terms”. This document helps prevent misunderstandings and avoids revising any clauses in the agreement on the eve of the sale. The main legal document is called the “Contract of Sale”. It deals with everything related to the purchase, is based on the contents of the “Letter of Intent” and includes all the details of the transaction. The most important parts of this document for the buyer are the seller’s representations and warranties and a description of the business assets and business-related obligations.
How to find a business partner in Europe
There are 3 sources that will be useful to a foreign entrepreneur when looking for a reliable European partner.
- In most European countries, companies can contact the government department responsible for trade, information and resources. This agency has databases of foreign experts on business, investment and technology. The department offers advice on exports and other market entry strategies. Enterprise Europe Network (EEN) is the largest network in Europe with an online database providing trade services to companies.
- Foreign diplomatic representations. In some EU countries, such as the Netherlands, you can contact embassies in foreign capitals, consulates in key economic centres and business support offices (NBSOs) in other regions. They are familiar with the local market, allocate resources and provide practical advice.
- Business associations. This association of business representatives includes industry organisations, chambers of commerce and councils established to promote commercial activities with specific target countries. They serve as sources of information for the aspiring entrepreneur, as many of them maintain industry statistics and lists of members.
Advantages of partnership with European companies
- bridging the expertise gap – a good partner can share expertise that is lacking or additional skills for business development;
- cost savings – having a business partner will allow the foreigner to share the financial burden of the costs and capital investment required for entrepreneurship;
- capital increase – the more partners there are, the more money can be available from their combined resources to invest in the business.
Best countries to open foundations and trusts in Europe
In the context of international asset management, choosing the right jurisdiction to register funds and trusts is a critical decision. Europe offers many attractive options, each with its own unique advantages and peculiarities. In this part of the article, we present an analysis of the best European countries for opening funds and trusts, taking into account aspects such as tax policy, legal stability, financial infrastructure and asset protection.
The best countries for opening trusts and foundations are Switzerland and Luxembourg. The legislation of these countries provides unprecedented protection for beneficiaries, the registration of trusts is the most flexible, and risks are minimised. Let us remind you that according to the Global Competitiveness Index, Switzerland is among the 10 best countries for financial investments. This country is the largest centre of trust administration, and in 2007 Switzerland ratified the Hague Convention on trust legislation.
Best Jurisdictions in Europe for Funds and Trusts
- Tax incentives: Luxembourg offers significant tax incentives for investment funds, including exemptions from income and capital tax.
- International Recognition: As one of the leading financial centres, Luxembourg enjoys a high degree of trust and international recognition.
- Regulatory Environment: Progressive fund and investment legislation harmonised with European directives.
- Privacy and Asset Protection: Switzerland has traditionally been regarded as one of the most reliable jurisdictions for asset protection and privacy.
- Stable Economy: Extremely low political and economic risks.
- International Standards: Swiss foundations and trusts comply with international standards and regulations.
- Attractive Tax Policy: A favourable tax system, including tax refund opportunities for foreign investors.
- Flexible Regulation: Malta’s investment fund laws are adaptable to cater for different investment strategies and needs.
- EU and Eurozone: Malta’s membership of the EU and Eurozone provides additional advantages in terms of trade and investment opportunities.
- Asset Management Centre: Ireland is recognised as a leading European hub
In addition, the company is also involved in asset management, attracting large international funds.
- Tax Advantages: Competitive tax environment, including low corporate tax rates and tax incentives for investment funds.
- Supportive Regulatory Environment: Transparent and flexible regulatory structure in line with international standards.
- Strategic Location: Convenient geographical location for asset management in the European market.
- Tax Incentives: Availability of favourable tax structures and double tax treaties.
- Strong Financial Infrastructure: Well-developed financial system and availability of qualified financial professionals.
Key factors for a successful choice of jurisdiction for opening a foundation or trust in Europe
Analysis of Tax Policy
It is important to thoroughly research the tax policies and possible incentives in the chosen country, as well as consider international tax planning.
Understanding Regulatory Requirements
An assessment of the regulatory environment and requirements for funds and trusts in each jurisdiction will ensure compliance with international standards and laws.
Consideration of Political and Economic Stability
Choosing a jurisdiction with a stable economic and political environment minimises risk and promotes sustainable asset management.
Assessment of Reputation and International Recognition
A jurisdiction with a good international reputation will foster investor and partner confidence.
Availability of Qualified Resources
The availability of qualified financial and legal professionals in a jurisdiction is an important factor in the effective administration of foundations and trusts.
Choosing the right European jurisdiction to incorporate foundations and trusts requires careful analysis and planning. Luxembourg, Switzerland, Malta, Ireland and the Netherlands offer unique advantages including tax benefits, regulatory support and political stability. These countries represent the optimal jurisdictions for asset management and investment initiatives on the European continent. It is important to consider individual needs and strategic objectives when selecting the most appropriate jurisdiction for registering funds and trusts.
If you are planning to open your business in Europe, but do not know which country is the best choice for company registration, take advice from the lawyers of Regulated Unied Europe. Our experienced staff from various European countries will choose the best option for you, taking into account the specifics and objectives of your business, taxation conditions and other nuances.
As you can see, the choice of European countries for starting a business is quite large, so the experts from Regulated United Europe would recommend you to pay your attention to the following:
The size of the statutory income tax rate. When doing business, a low rate of corporate tax (Bulgaria, Cyprus, Ireland) or no mandatory corporate tax (Estonia) will be an undeniable advantage and will contribute to the legal optimisation of your company’s taxation in Europe
Ease of doing business. In some European countries opening a company takes only a few hours and does not require your personal presence (Estonia, Ireland), while in others it is a complicated bureaucratic procedure that requires a personal visit, obligatory deposit of the company’s authorised capital and takes up to two months. We also recommend that you familiarise yourself with the conditions for foreigners to do business in your chosen country – in some European countries it may be difficult to use only English to conduct business.
Cost of starting and maintaining a company. If you are planning to start a micro-business with a small number of employees or run your business on your own, countries with high start-up and maintenance costs (Switzerland, Luxembourg, Liechtenstein) are unlikely to be the best choice for you. In addition to the cost of starting a company, it is also important to consider the costs of maintaining it: the cost of accounting services, the obligation to undergo an audit, the need for local employees and the need for a physical office in the country of incorporation.
Company control. Before starting a business in Europe and choosing a country to open a company, it is worth paying attention to the corporate legislation of the country you have chosen – in some European countries (Switzerland, Bulgaria) a company with foreign ownership has an obligation to have a local director who is a resident of the country. For some types of business this may be an insignificant and easy to fulfil requirement (you have a partner, a resident of the country in which you fully trust), but for other types of business it can be a significant problem and it is better to try to solve it at the earliest stage, choosing a European country to open a business in which there is no such obligation.
Confidentiality of information about the company’s beneficiaries. If inaccessibility of data on company beneficiaries is critical for your business, Cyprus and Switzerland will be the preferred choice for opening a company in Europe. It should be borne in mind that in some European countries information on all company members is freely available (Estonia), while in others it can be ordered for a small fee from the Commercial Register or from a private company that has such information.
Your business partners and their country of incorporation. In case you already have key business partners from a European country, it would be advisable to initially consider it for starting a business in Europe. In this way you will simplify further co-operation with your existing business partners and protect yourself from additional questions from banks and tax authorities.
The need to employ employees. If the activity of your European company involves the employment of a large number of employees and, consequently, the lease/purchase of business premises, European countries with the highest standard of living will not be the best choice. For such business activities, it is worth paying attention to European countries with low wage levels and at the same time taking into account the possibility of employing the necessary number of specialists from the chosen sector.
Using a bundle of companies. In recent years, this option of doing business in Europe has become the most popular – international entrepreneurs use a bundle of two or three companies thus maximising the advantages of each of the chosen jurisdictions
FREQUENTLY ASKED QUESTIONS
The best country for starting a business in the European Union (EU) depends on various factors, including your business type, industry, target market, and personal preferences. Each EU country has its own set of regulations, tax structures, and business environments.
Companies choose to register in European Union (EU) countries for various reasons, and these reasons can vary depending on the nature of the business, industry, and specific goals of the company. Some common reasons why companies register in EU countries include stable legal protection, business development, access to various markets, low tax frameworks, and easy bank account opening.
Yes, our banking specialists at Regulated United Europe can assist you in opening a bank account both physically and remotely, depending on your needs.
Absolutely, non-residents have the opportunity to register a company in Europe. The EU embraces foreign investors and entrepreneurs, encouraging them to establish businesses.
Yes, it is possible to register a company in the EU remotely. Most EU countries allow for online submission of documents, enabling entrepreneurs to initiate and complete the registration process without being physically present.
RUE customer support team
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