The best country to start a business in Europe

If you’ve decided to expand your business into Europe, it’s likely that you already have an idea of where you want to move. However, this can often be influenced by preconceptions and misconceptions about the most prestigious place to be rather than the best place for your business. In actual fact, there are numerous factors you should consider before you move.

From funding to taxes to the availability of talent, there are many factors which go into deciding on the best country to start a business in Europe. Here’s an overview of the best countries based on a number of factors, and a breakdown of just what it is that each country does well - and could potentially offer to your expanding business.

Doing Business ranking

The Doing Business ranking is a value attributed to almost every country in the world by the World Bank organization. The World Bank take a number of factors into account when deciding on the best place to start a business, including the legal and structural barriers to starting and operating a business. A bad Doing Business ranking isn’t terminal, particularly if the issue is with starting a business, as a formation agent can guide you through this. However, it is something to consider alongside other factors.

What’s interesting about the Doing Business rankings is that they don’t always correlate with which economies are largest, or have the most prestigious global reputations. Instead, the rankings look at how easy it is to start and run a business in these countries. Instead of making your mind up, the Doing Business report is a good source of alternative locations to start a business quickly and easily - perfect for testing the water ahead of a big European expansion.

The top ranking countries in Europe are:

1. Denmark

Denmark is ranked as the best country in the world for trading across borders, with simple regulation and an ideal position at the heart of Europe. It also ranks 4th worldwide for construction permits, 6th for resolving insolvency, 9th for paying taxes and 11th for registering property - and is frequently cited as having some of the best living standards in the world.

2. Georgia

Georgia ranks as the 2nd easiest country in the world in which to start a business, and the 2nd best for protecting minority investors. It ranks 4th for registering property and 8th for enforcing contracts. With a European cultural heritage and position on the Asian border, it’s also ideally positioned for intercontinental trade.

3. Norway

Norway is the 3rd best country in the world for enforcing contracts, and the 5th best for resolving insolvency. Seven of the other eight ranking factors are in the top 30 worldwide, making it a great all-rounder, while its position in Northern Europe is ideal for further expansion. It’s also a very wealthy and stable country, with high education standards and well-developed infrastructure.

4. United Kingdom

As a culturally similar nation to the United States with one of the lowest corporate tax rates in the G20, the United Kingdom is particularly accommodating to businesses. The UK ranks 7th for getting electricity, 15th for protecting investors, 17th for dealing with construction permits and 19th for starting a business. While Brexit has introduced some uncertainty, it remains an attractive geographical location and business destination.

5. North Macedonia

Perhaps a surprise entry in the top five, North Macedonia has made great strides to attract investment, and is now an excellent location for expanding businesses. Positioned on the Balkan peninsula, the newly renamed country is 7th for protecting minority investors, 12th for getting credit and 13th for dealing with construction permits. It remains a relatively poor country, but this can have benefits for businesses on a lean budget.

Talent and infrastructure

While it’s possible to hire talent in your country of origin and bring them with you, it’s usually not advisable. By hiring locally, you gain a wealth of knowledge that’s specific to the local area, helping to avoid awkward mistakes with translation or cultural faux pas. You’ll also help to endear yourself to the local population, and make yourself feel more like a local business.

As such, the availability of talent in your European country is crucial. While all EU nations benefit from the free movement of European talent, some countries boast more local talent than others. As well as looking at the proportion and reputation of universities, it may also be relevant to look at hubs for different industries, where talent will often be pooled.

The best country to start a business in Europe FranceFrance

France is increasingly becoming known as the home of tech startups outside Silicon Valley, and for good reason. Under forward-looking President Emmanuel Macron - previously the country’s Digital Economy Minister - France has continued to invest heavily in the creation of tech hubs and promotion of tech talent under the ‘La French Tech’ program.

France sends the largest non-American delegation each year to the famed Consumer Electronics Show and now boasts dozens of tech hubs around the country, featuring one of the world’s best startup campuses in Paris’ Station F. It’s also home to thriving agricultural and chemical industries, as well as precision engineering and manufacturing concerns.

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Netherlands

Similar to France, the Netherlands has thrived since consolidating its efforts under the Startup Delta banner. The Netherlands benefits from an extremely well-educated populace - many graduates speak three or four languages at a conversational level - and almost unrivalled connectivity.

As well as having some of the highest internet speeds in Europe, the Netherlands is also connected directly to the UK, Germany and Belgium by train, and features one of the world’s busiest airports in Schiphol. With English fluency above 90%, it’s also proved an ideal spot for relocation after Brexit - and could be the perfect location for your business too.

Portugal

Portugal is a fantastic place to live, which naturally attracts all sorts of talent you can utilize. The major cities of Porto and Lisbon both have thriving student and expat populations which have proved to be lucrative sources of talent. The country is also well-connected to the rest of Europe with a range of major ports and airports as well as road connections to Spain.

Portugal was traditionally not the easiest place to start a business but huge strides have been made in recent years. A concerted effort to attract foreign investment has seen an overhaul of the registration process and a focus on creating spaces for new startups. Lisbon is now home to a variety of startup spaces and a new tech visa opened for application early in 2019.

Finland

You may not realise it, but Finland has quietly become one of the global epicentres for tech success. As of 2019, around 10% of all startup acquisitions are Finnish companies, while Helsinki ranked as the best place in the world for networking in the 2018 Global Startup Ecosystem report. Local startups benefit from a strong ecosystem, generous R&D funding and an extremely high quality of life.

Local universities and colleges produce much of the talent on offer, with well-established pathways into Finland’s many successful tech companies. Nokia are still a major player, but they’ve been superseded by companies including Rovio (Angry Birds) and Supercell (Clash of Kings) - two of the world’s most popular mobile game developers.

UK

The UK would traditionally dominate this category, and in many senses it still does. As well as an array of world-leading universities, the UK has a highly developed startup ecosystem, with the ‘Silicon Roundabout’ in London and growing startup campuses in the North of England and Scotland. The country also boasts some of the world’s largest airports, deep sea ports and strong rail links to the rest of Europe.

However, Brexit has upended these benefits in many respects. Talent will be somewhat harder to come by with the end of free movement from the EU, at least in the short term. And it’s likely that trade across borders will be interrupted by increased customs checks, particularly in the event of a hard Brexit. The UK remains a strong candidate for a move to Europe, but it may be best to see how Brexit pans out (deadline October 2019) before settling on a move.

Prestige

Arguably as important as the mechanics of running your business is the appeal of being based in a given country. Aspects such as the prestige of a country or city, the standard of living and the size and variety of the local economy could have a major impact on your decision. The right location could enhance the value of your products, attract better talent and improve your employees’ quality of life.

Europe is not short of superb places to live and work, and includes many of the world’s largest economies by GDP, including major players in finance, manufacturing, pharmaceuticals, tech and more. Here are five of the most popular and prestigious countries in Europe to start a business, based on a combination of the factors above:

Germany

Known internationally for precision and efficiency, Germany is a great location for businesses which want to emphasise the quality of their products. With a number of industrial centers, the renowned ‘Mittelstand’ of thriving SMEs, a legacy of industrial success and easy access to business visas for non-EU nationals, Germany is a strong candidate for the most business-centric country in Europe.

What Germany also offers is a strong, stable economy and a high quality of life. While there is not much to separate its many major cities, Berlin is particularly attractive to international businesses and employees. As well as English being widely spoken, Berlin is also world-renowned for its nightlife and culture, and is a hotbed of young talent. Frankfurt is also a major business hub and is well on its way to being the new home of European finance.

Ireland

Ireland may not strike you as the most prestigious location for businesses, but its star is growing by association. Thanks to generous tax policies and English proficiency, Ireland has attracted a host of major businesses, with European headquarters including Google, Microsoft, Facebook, Paypal, eBay and LinkedIn. It also has extremely good internet connections, and sitting at the westernmost point of Europe, is an ideal place to host data centres.

As a result, Ireland is quickly growing into a prime destination for tech startups. Cork, Galway and Limerick all feature local universities and Ireland’s natural beauty, but Dublin is the epicentre of this startup growth. This growth is only set to continue as Ireland benefits from a ‘Brexit bounce’, and continues to attract businesses and talent from the UK.

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The best country to start a business in Europe France 2France

France is renowned for artisan goods, with a particular reputation for great food, drink and clothing. Basing businesses in these industries in France - and particularly in Paris - will grant you a significant amount of prestige. Naturally, these locations are also ideal for sourcing talent within these industries, and attracting talent from outside of the country.

Related article: Start A Business In France in 8 Steps

Paris in particular is one of the most desirable cities in the world, and a great place to live and work. It also needn’t be prohibitively expensive: it’s generally cheaper to rent in than neighboring London, and features a number of budget options in coworking spaces and startup campuses. France also benefits from the many tech hubs and networking opportunities, as well as the presence of precision and specialist manufacturers, who can bring your products to life.

UK

Despite the impact of Brexit, the UK remains a popular option for businesses expanding to Europe. London still holds substantial prestige for a range of business types, and is a desirable place to live and work. It also has a well-developed startup ecosystem, with the highest level of startup funding anywhere in Europe, and a range of resources and support networks.

Businesses can play on the history and culture of the UK for their products, ranging from ‘classy’ or big-ticket brands to more modern exports, such as music, movies and comedy. London is also the home of European fintech, although it remains to be seen whether this continues after Brexit. The UK is bigger than England, of course, and Scotland, Wales and Northern Ireland also have their own specialities, from whiskey to machinery to filmmaking.

Sweden

One of the less heralded business hubs in Europe, Sweden has refashioned itself in recent years. While it’s still the proud home of Ikea and Volvo, the 6th best European nation in the Doing Business rankings (and 12th worldwide) has rebranded as a home for tech startups. The capital, Stockholm, now boasts at least half a dozen major startup hubs and venture capital firms, with talent drawn from several great universities.

Arguably beginning with the IPO of Candy Crush developer King in 2014, Sweden has become known for its extremely high level of startup exits. The number of companies being bought or floated more than doubled between 2016 and 2017, making it the single most successful startup hub in Europe that year. That trend has continued apace, with a $27 billion IPO for Spotify and the $2.2 billion acquisition of iZettle last year.

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While we hope the points above have been informative, this is only an overview of the most popular countries to expand to, and may not precisely match up with your plans or ambitions. From the nature of your product to your industry or funds, there are numerous factors that go into choosing which European country to start a business in, only some of which we could cover here.

We’ve helped businesses open up and expand to more than 30 countries worldwide, and can make your dream of starting a business in Europe into a reality. If you need more information on company and branch formationregistering a business addressopening a bank accounttax advice or help in finding a chartered accountant, please click on the links, and either call us directly on 0033 (0)1 53 57 49 10 or email us from our contact page.  We also offer free in-depth guides to starting a business in France and starting a business in Ireland which you can download above.