The Best Countries to Start a Business in the European Union
Are you planning to start a business in the European Union but not sure where to begin? With 27 member states offering varying levels of opportunity, taxation, bureaucracy, and infrastructure, it’s crucial to pick the right country from the start.
In this 2025 edition, we’ll explore the top 10 business-friendly countries in the EU, ranked based on ease of doing business, tax climate, digital infrastructure, access to talent, and startup ecosystem strength.
Whether you’re an entrepreneur looking for the best countries to start a business in the EU, or a foreign investor considering expansion, this guide provides everything you need to know.
🔟 10. Portugal
Why it ranks: Affordable cost of living, digital nomad appeal, simplified company formation.
- Corporate tax: 21% (lower for SMEs in some regions)
- Time to start a business: 4–5 days
- Notable perk: Government incentives for tech startups, especially in Lisbon and Porto.
- Challenges: Bureaucracy can still be a hurdle; slower banking systems.
Portugal is increasingly popular among digital entrepreneurs, especially with its “Tech Visa” and attractive conditions for remote-first companies.
9️⃣ 9. Austria
Why it ranks: Stable economy, access to central and eastern European markets.
- Corporate tax: 23% (as of 2024, reduced from 25%)
- Time to start a business: ~5 days
- Notable perk: Highly skilled labor force, efficient legal system.
- Challenges: Higher labor costs; strict labor laws.
Vienna is a rising hub for fintech and health tech. Austria combines strong infrastructure with predictable regulations—a good match for mid-sized firms.
8️⃣ 8. Ireland
Why it ranks: Ultra-low corporate tax and English-speaking environment.
- Corporate tax: 12.5% (one of the lowest in the EU)
- Time to start a business: 3–4 days
- Notable perk: Headquarters of tech giants like Google, Meta, and Apple.
- Challenges: High cost of living and housing shortages.
Ireland remains one of the best countries to start a tech company in the EU, especially for startups targeting the U.S. and European markets simultaneously.
7️⃣ 7. Lithuania
Why it ranks: Digital-first government and ease of incorporation.
- Corporate tax: 15% (micro companies pay less)
- Time to start a business: 1–2 days (can be done online)
- Notable perk: E-residency and startup visa programs.
- Challenges: Smaller market; regional talent sometimes relocates westward.
Vilnius has become a hotspot for fintech, with a welcoming attitude from regulators and a strong focus on digitalization.
6️⃣ 6. Sweden
Why it ranks: Innovation leader with strong startup ecosystem.
- Corporate tax: 20.6%
- Time to start a business: 3–5 days
- Notable perk: High level of digital readiness, excellent English proficiency.
- Challenges: High personal income taxes and living costs.
Sweden is home to major tech success stories like Spotify, Klarna, and Skype. It’s an ideal place for entrepreneurs focused on sustainability, green tech, and SaaS.
5️⃣ 5. Czech Republic
Why it ranks: Central location and competitive labor costs.
- Corporate tax: 19%
- Time to start a business: 5–7 days
- Notable perk: Strong manufacturing and industrial base.
- Challenges: Some bureaucracy remains; limited access to VC funding compared to Western Europe.
Czechia is well-positioned for logistics, export-oriented businesses, and e-commerce operations in the EU and beyond.
4️⃣ 4. Estonia
Why it ranks: The world’s most advanced digital government.
- Corporate tax: 0% on reinvested profits
- Time to start a business: Less than 24 hours (with e-residency)
- Notable perk: E-residency allows non-residents to start a business remotely.
- Challenges: Limited local market and talent pool.
Estonia is ideal for solo entrepreneurs and small international teams that prioritize automation and location-independent operations.
3️⃣ 3. Netherlands
Why it ranks: International trade hub with favorable tax treaties.
- Corporate tax: 19% (up to €200k), then 25.8%
- Time to start a business: 3–5 days
- Notable perk: Gateway to the EU market; strong logistics and financial sectors.
- Challenges: High cost of living and competitive job market.
The Netherlands is one of the best countries to start a business in the EU if you’re scaling rapidly or need a global-facing HQ.
2️⃣ 2. Germany
Why it ranks: Europe’s economic engine and industrial powerhouse.
- Corporate tax: ~30% (combined national and municipal)
- Time to start a business: 7–10 days
- Notable perk: Strong legal protections, skilled workforce, and funding access.
- Challenges: Bureaucratic processes; slower digital adoption in some areas.
Germany offers a rock-solid base for manufacturing, engineering, B2B services, and export-led businesses.
🥇 1. Denmark
Why it ranks: High ease of doing business, modern government, and fast incorporation.
- Corporate tax: 22%
- Time to start a business: 1 day (fully online)
- Notable perk: Transparent legal system, minimal corruption, and progressive work culture.
- Challenges: High personal tax; labor is expensive.
Denmark consistently tops EU rankings for business friendliness, innovation, and entrepreneurship support.
🗺️ Honorable Mentions
- Slovenia – Great for green tech and tourism ventures.
- Finland – Strong digital infrastructure and high education levels.
- Latvia – Another Baltic state with low tax and fast online registration.
- Croatia – Growing startup community and e-residency options emerging.
🧭 What Makes a Country Business-Friendly?
Choosing the best EU country to start a business depends on your priorities. Key criteria include:
| Factor | Why It Matters |
|---|---|
| Corporate tax rate | Directly impacts net profit |
| Startup ecosystem | Access to mentors, investors, and partners |
| Bureaucracy level | Time and cost to start and maintain a company |
| Digital infrastructure | Enables remote work and automation |
| Talent availability | Easier to hire skilled workers |
| Cost of living | Affects operating costs and employee satisfaction |
| Legal transparency | Important for long-term stability |
🧠 Final Thoughts: Where Should You Start Your EU Business?
There is no universal “best” country for all entrepreneurs. But based on the 2025 data and trends, these are the best countries to start a business in the EU depending on your specific goals:
- For tech startups: Estonia, Sweden, Ireland
- For logistics & exports: Netherlands, Germany, Czech Republic
- For low-tax solo founders: Ireland, Lithuania, Estonia
- For quality of life & digital ease: Denmark, Portugal
Before you decide, consult local experts, lawyers, or tax advisors to understand the nuances of local legislation and incentives.
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Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or investment advice. Readers should consult with a licensed professional before making any financial or business decisions.
