Let’s start with one of the most underrated Eastern European countries – Georgia.
We’re starting here because, unlike the other countries on this list, it’s not an EU member but rather an EU candidate country. But if you’re looking for an affordable, tax-efficient and business-friendly country to incorporate, it’s still well worth investigating.
Georgia ticks plenty of other boxes. It’s a picturesque country famous for its exquisite cuisine, delicious wines, ancient monasteries and majestic mountains. Georgia’s capital, Tbilisi, is also one of the most charming European capitals, featuring an amazing blend of the ancient and contemporary.
Ranking 21st of 121 countries in the Safety Perception Index, 2023, owing to its low crime rate, Georgia boasts an economically and politically stable environment.
Georgia is an ideal European base for business activities, for opening an offshore bank account or even buying real estate. The country has ranked 7th among 190 countries in the latest Doing Business Index by the World Bank, ahead of states like the UK, Norway and Sweden.
Georgia’s thriving real estate market, lucrative tax incentives, favourable business environment and strategic location at the Euro-Asia intersection make it an excellent option for establishing a corporate base.
For most businesses, the corporate tax rate in Georgia is 15%. The country also offers several tax-friendly programs to investors and entrepreneurs.
You can entirely forgo your tax liabilities in Georgia by registering as a micro business. Individual Entrepreneurs with no employees and less than GEL30,000 annual turnover can apply for the Micro Business status and pay 0% tax on their business income.
Moreover, an Individual Entrepreneur with an annual turnover of less than GEL500,000 (around US$150,000) may register as a small business and pay a 1% tax. The rate increases to 3% if the annual turnover exceeds GEL500,000.
Portugal
Portugal is one of the most tax friendly EU countries.
Portugal is a southern European country on the Iberian Peninsula, sharing its only land border with Spain. Portuguese is the official language, but English is widely spoken in larger cities and tourist destinations.
The country is famous for its diverse terrain and climate, rich culture, excellent cuisine, delicious wines and miles of stunning coastline.
The country ranks sixth on the Global Peace Index and is also among the top tourist destinations in the world. Lisbon, the capital, is a well-renowned digital hub with remote workers from all around the world visiting the city for its vibrant culture, diverse community and abundance of co-working spaces.
Portugal offers a range of entrepreneur-friendly visas for foreigners looking to establish an EU corporate base. The most well-known of these is the Portugal D2 Visa.
Portugal’s D2 visa, also known as the Immigrant Entrepreneur Visa, offers foreign entrepreneurs a chance to start a business in Portugal, relocate their business or invest in an existing business there. Moreover, the D2 visa has no minimum investment requirement or conditions for creating jobs or yearly profitability.
At five years, Portugal has the shortest naturalisation period in the EU, making it an excellent option for businesspeople who want to acquire EU residency or citizenship.
Cyprus
Cyprus is a great place to establish business enterprises.
Cyprus is appealing to foreign investors and entrepreneurs due to its comparatively low corporate tax rate and entrepreneur-friendly residency routes.
The Mediterranean island also offers one of the cheapest ways to gain EU residence, with an investment of just €300,000.
Cyprus’ economy is set to be one of the more resilient in Europe, with a predicted short-term growth rate of around 3%. It is supported by public and private investments, entrepreneurship and innovation. Tourism, financial services, oil exports, agriculture and shipping are all big drivers of the Cyprus economy.
In addition to a favourable business climate and skilled workforce, Cyprus is one of Europe’s least expensive places to live.
Among the main benefits of launching a business in Cyprus is the corporate income tax rate, which at 12.5% is one of the lowest in the EU. You can also avail of 0% tax on profits from the sale of real estate abroad, dividends and stamp duty.
Cypriot businesses must maintain proper accounting records and follow the International Financial Reporting Standards. Registering a new company will cost you around €1,300.
Greece
Greece is a beautiful part of the European Union.
One of the most beautiful European countries, Greece is a tourist magnet and known around the world for its charm. However, the country has much to offer besides natural beauty and stunning beaches.
Greece is also known for its Golden Visa Program and lump-sum tax regime.
Greece has one of the fastest Golden Visa programs, taking approximately five months to be approved.
You can gain five-year Greek residency (renewable) through the Golden Visa program if you invest €250,000 in the country. However, the government has recently doubled the minimum investment amount (making it €500,000) for real estate investment in sought-after areas.
Greek residence can also lead to citizenship if you spend at least seven consecutive years in the country. The lump-sum tax arrangement makes this even more enticing.
Greece’s lump sum program offers wealthy foreigners the chance to become Greece tax residents and pay €100,000 annually for up to fifteen years while enjoying tax relief on their foreign-sourced income.
Under the Greek lump-sum tax program, applicants will be exempt from reporting requirements on their foreign-sourced income. Any foreign-held assets will also be exempt from donation and inheritance tax. However, all income sourced from Greece will be taxed at standard rates.
Malta
Malta has a fairly good corporate income tax rate.
With a number of advantages for both individuals and businesses, Malta is renowned for its attractive tax system.
There are no withholding taxes, stamp duty or dividend tax in some circumstances for businesses. The corporate tax rate is a flat 35%, but foreign-owned Maltese companies can claim tax refunds that result in an effective rate as low as 5% – the lowest in Europe.
If a company owner is not considered a tax resident in Malta, they can reclaim 30% of the tax.
If you want to move an existing company or form a new one in Malta, as well as have low fees, foreign-owned Maltese holding companies are completely tax-exempt.
A dividend tax of zero per cent for registered holding companies means subsidiary profits can be paid out in dividends and incur no tax liability. Income tax ranging from 0% to 35% is paid at progressive rates, with the maximum due for income above €60,001.
There are nuances to company incorporation in Malta, which need to be explored on a case-by-case basis. Nomad Capitalist can work with you to establish a holistic strategy that puts all of the pieces of the puzzle together.
Some Other Business-Friendly European Countries
While most European countries aren’t business friendly, there are options.
The following are some other European countries where you can start a business:
Ireland: With an attractive 12.5% corporate tax rate for small and medium-sized corporations, Ireland is keen to attract investors with government support, developed infrastructure, tax incentives and a highly skilled workforce.
Bulgaria: Located at the confluence of the West and the East, Bulgaria is an interesting option for foreign investors seeking an EU business presence with affordable labour.
What is the Best Country in Europe to Start a Business?
The best countries to start a business in Europe are those that equip you with the tools and opportunities to expand your business and also pay lower taxes. The country you chose should also work with your future vision, whether that be residency or citizenship in the future.
There are many options for planting a business flag in Europe, but you’ll have to choose carefully to ensure you select the option that gives you the ideal mix of tax, asset protection and lifestyle opportunities.
Whatever you decide, it must be planned carefully.
Nomad Capitalist can help you with that.
We’re the only firm with the world’s largest database of up-to-date information on tax, residence, citizenship, banking and corporate structures in over a hundred countries.
Moreover, we’ve helped over 1500 clients move to freedom and tax-friendly jurisdictions where they’re now thriving.
If you want to go where you’re treated best, become one of our clients today.
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Publish date : 2024-06-27 07:00:00
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