Europe is one of the leading business destinations on a global scale, especially since it benefits from a solid and stable economic and social market under the European Union.
Setting up a company here opens you access to one of the world’s largest business hubs with well-developed infrastructure, strong legal background, high skilled workforce, low trade costs, language affinities, and a single currency.
In the World Bank’s Top 20 list of Ease of doing businesses ranking for 2020, nine out of twenty were European countries. Consequently, Europe remains one of the most attractive options for international investment and business growth.
Walking beyond the benefits of a single market represented by the European Union, like in every usual system, there are different countries with their available resources being the best fit for different business goals. In other words, if you have already a rentable division for your business operations, then a bright idea might be opening a sales office in Switzerland, UK, or France, and in the case of a shared operations services center Hungary, Poland and Romania could be a better fit.
Very often, companies start with sales and assistance personnel in the new market but as they grow, begin to hire engineers and developers. And as the team grows, companies start to hire finance, legal, operations, and other support functions to support their growing teams. Therefore, you should assume you'll need additional space for new hires soon or in the medium term. This means finding a location where you have the flexibility to scale across multiple business functions. You need flexibility in terms of real estate and talent availability and mobility across these functions.
Having helped multiple companies, advising and assisting them in their expansion planning activity, we’ve found that while the topic on starting a business in Europe and hiring people compliantly in 2021 isn’t new, business owners still have unanswered questions on where, when, and how to open a successful European company? 5 the most common we are going to cover in this article.
If that’s the case where you have grown a prosperous local business not having it all step-by-step planned before, it is not the case when going global. And here is not mainly about costs, even though this can have a painful impact, it is about the vision you have got on your global business and your “why-s”.
#1. How to choose the European country to start a business depending on my company activity?
First of all, there has to be a synergy between your business activity even if you are in seven countries. Initial, activity-specific market research will work. Check the market potential for your activity, read the latest industry news, see what your local competitors do, analyze the clients’ decision maturity, what works for them now, how is the field regulated, what are the main taxes to pay, evaluate the talent pool, find out more on country perspectives.
2#. What are the most profitable industries in the EU?
It is being said that the tech industry is the most profitable field in the EU, and there are no doubts about this. However, if you look for a “tasty” profit margin, you should better go for Eastern European Countries such as Moldova, Ukraine, or Romania (in case your clients are inside the EU). Besides, other countries like Switzerland, Netherlands, Sweden, UK have greater investment potential, so your tech company may be easily observed by venture capital titans and taken to the next level.
Things do not rotate only around tech, in Europe, there are some other industries with a promising potential for growth such as automotive and healthcare.
High-quality cars, designed and manufactured at the highest quality standards by Germany, France, and Italy, and sold worldwide, make from automotive industry the largest by revenue. Huge investments are put into the innovation of machines, combining them with the latest inventions of artificial intelligence, robotics, complex pieces, steadily moving toward self-driving car capability. So, establishing a branch in the geographical proximity of the world automotive giants for providing high-quality car pieces may be a bright idea.
#3. What is the easiest EU country to start a business in?
The practice says that the hardest part about running a business is finding clients, and it is true. However, getting it started might be not at all easy.
Depending on the state regulations and complex application processes of the targeted country, you might struggle or succeed in opening and operating a business.
Here is the Top 5 EU countries to open a business in less than 24 hours:
#1 - Denmark
#2 - UK
#3 - Norway
#4 - Sweden
#5 - Lithuania
Even if starting a business takes 24 hours, running it might be much difficult, this is why it’s important to look what is the procedure after its registration.
#4. What are the best countries for foreign investors?
The natural available resources, the market potential, efficiency, and strategic assets like technologies or brands, are the key factors that motivate an individual or multinational to invest in a particular country.
UK, France, Germany, Spain, and Belgium are the European countries among the Top countries to invest in 2020 realized by the World Bank Group evaluated depending on the criteria of corruption, flexibility, economical stability, entrepreneurial, favorable tax environment, innovation, skilled labor force, and technological expertise.
#5. What are the European countries that offer residency or citizenship by investment?
There are some alternatives for getting citizenship by investment or residency by investment nowadays. Each of them may fit or not your needs, but it is important when making the choice to assess the pros and cons strongly depending on your individual preferences.
Depending on the administrative procedures and the list of requirements to fulfill it may take from a month (Spain) to one year (Malta) to get European citizenship or residency. Basically, the destination choice should be made taking into account the amount of needed investment, the timeframe when the citizenship/ residency is received, and the list of criteria to meet in this regard. However, this does not exclude the evaluation of other kinds of factors such as the quality of life, the cost of living, the level of pollution, and the healthcare status and accessibility.
Though the following destinations are among the most recommended to review: Portugal, Spain, Greece, Cyprus, and Malta.
In the era of internet entrepreneurs, it is crucial to be informed and stay connected to the latest updates regarding the state of market health in terms of funding costs, tax rates, regulations, and available talent pool.
If you have got a question which was not answered in this article get in touch with us. One of our experts would be happy to help. Benefit now from a free hour of advisory on your expansion strategy.