Expanding your business to Europe presents a wealth of opportunities, but choosing the right country is crucial for success. Europe offers diverse business environments, each with unique advantages and challenges. From favourable taxation policies to ease of company formation and market potential, understanding these factors can help UK businesses make informed decisions.
This article aims to provide UK businesses with comprehensive insights to guide their expansion plans.
Criteria for Selecting the Best Countries
We’ve reviewed the following criteria when considering which European countries are the best for setting up your business:
- Corporate tax rates
- Ease of company formation (streamlined bureaucratic processes and business-friendly government policies)
- The size and accessibility of the market, along with consumer demand
- A supportive business landscape, i.e. economic stability, infrastructure quality and availability of skilled labour
- Tax incentives, grants and subsidies to attract foreign investments
Which Countries are the Best in Europe for Business?
1. Poland

Poland is a dynamic and attractive destination for starting a business in Europe. With a rapidly growing economy, low labour costs, and strategic access to the EU single market, it offers substantial opportunities for entrepreneurs.
The Polish government actively supports foreign investors with various incentives, making the business environment welcoming and conducive to growth. Despite some bureaucratic challenges and infrastructure variability, Poland’s skilled workforce and growth potential make it an ideal choice for UK businesses looking to expand into an EU country.
Pros of Doing Business:
- Poland has one of the fastest-growing economies in Europe, providing an excellent market for new businesses.
- Low labour costs, especially in manufacturing and services.
- EU market access.
- Various tax breaks, grants, and investment incentives available to foreign investors.
Downsides to Doing Business:
- Potentially time-consuming and complex bureaucratic hurdles.
- Outside major cities, fluency in English is lower.
- While major cities have good logistical facilities, rural areas may lack adequate facilities, affecting logistics and operations.
- At 19%, the corporate tax rate is higher than in some neighbouring countries.
Taxation Rates:
Corporate tax rate is 19%, with reduced rates available for small business owners and startups. Additional incentives and exemptions are available for specific sectors and regions.
Best Locations for Business:
- Warsaw is the capital city and a business hub with excellent infrastructure and a large talent pool.
- Kraków is known for its tech and startup scene.
- Wrocław is a growing business centre with a focus on technology and manufacturing.
- Gdańsk has strong logistics and shipping facilities, ideal for trade and distribution.
Other Considerations:
Poland’s strong links with the UK facilitate business relations and cultural understanding, making it easier for UK businesses to establish and grow their presence.
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“Poland offers a dynamic and robust environment for businesses with its strategic location in Europe, qualified workforce and competitive operational costs. J. Dauman & Co’s experience in Poland has shown significant growth potential and a supportive business community, making it an ideal destination for UK enterprises looking to expand.”
– Piotr Kubalka, CEO at J. Dauman & Co
2. Germany

Germany is a great destination for setting up a business in Europe due to its strong economy, large consumer base and prime location within Europe. With a well-established infrastructure, a strong culture of innovation and highly talented professionals, Germany offers significant opportunities for entrepreneurs.
The country’s stable political and economic environment and supportive business regulations make it conducive to business growth. Despite high living costs and strict regulations, Germany’s economic strength and market potential make it a compelling choice for UK businesses looking to expand into Europe.
Pros of Doing Business:
- With the largest European economy and extensive market reach, Germany provides access to a vast and affluent customer base.
- Renowned for its technological advancements and world-class infrastructure.
- Highly educated and skilled labour force.
- Business-friendly regulations encourage entrepreneurial activities.
Downsides to Doing Business:
- Major cities like Berlin and Munich have expensive living and operational costs
- Compliance with Germany’s stringent regulatory standards can be challenging for new businesses.
- A mature market means high competition across various sectors.
- Compared to some other European countries, labour costs in Germany are relatively high.
Taxation Rates:
Corporate tax rate ranges from 15% to 30%, depending on the region and income level. Additional local trade taxes can apply, affecting the overall tax burden.
Best Locations for Business:
- Berlin, the capital city, is known for its vibrant startup scene and tech innovation.
- Munich is a commercial centre for technology, finance and engineering.
- Frankfurt is the financial capital of Germany, hosting numerous international firms and financial institutions.
- Hamburg is a key port city with solid logistics and manufacturing sectors.
Other Considerations:
Germany’s ideal geographical spot in central Europe makes it an ideal hub for businesses looking to access both Western and Eastern European markets. The country’s strong emphasis on research and development and government support for innovation provide a fertile ground for high-tech and manufacturing industries.
3. Estonia

Estonia is a highly attractive destination for establishing a business in Europe, especially for tech-savvy entrepreneurs. With advanced digital connectivity and an e-residency programme, Estonia makes it incredibly easy to start and run a business online.
The country offers a transparent and business-friendly regulatory environment, making it an ideal choice for UK businesses looking to expand.
Pros of Doing Business:
- It’s a global leader in digital innovation, providing excellent online services for businesses.
- E-residency programme allows foreign entrepreneurs to establish and manage an EU-based company entirely online.
- One of the most streamlined administrative processes in Europe, facilitating quick and efficient business setup.
- The tax system is straightforward: a business tax rate of 20% on distributed profits and no tax on retained earnings.
Downsides to Doing Business:
- With a population of just over 1.3 million, the domestic market is limited.
- The small population also means a smaller pool of available talent, particularly in specialised fields.
- While English is widely spoken in business, navigating day-to-day operations may require knowledge of Estonian.
Taxation Rates:
Corporate tax rate is 20% on distributed profits, and no tax is levied on retained and reinvested earnings. This encourages businesses to reinvest their profits locally.
Best Locations for Business:
- Tallinn, the capital city, is known for its startup scene and strong tech sector.
- Tartu is a university city with a focus on research and development, particularly in biotech and IT.
- Narva is ideal for manufacturing and logistics thanks to its position near the Russian border.
Other Considerations:
Estonia’s e-residency programme provides a unique advantage for UK entrepreneurs, allowing them to operate their businesses remotely while maintaining a presence within the EU. The country’s commitment to digital innovation and transparency makes it an excellent choice for tech startups and online companies looking for a hassle-free business environment.
4. Netherlands

The Netherlands is a top choice for launching a European business venture due to its strategic location, robust infrastructure and highly qualified talent pool.
The country’s business-friendly environment and high levels of fluency in English make it particularly appealing for UK entrepreneurs looking to expand their operations within the EU.
Pros of Doing Business:
- Its location serves as a gateway to Europe, with excellent logistics and transportation networks.
- Transparent regulations with streamlined processes for company formation.
- Most Dutch professionals are fluent in English.
- Fantastic transportation network, including ports and airports.
Downsides to Doing Business:
- Major cities like Amsterdam and Rotterdam are expensive places to live and work.
- Mature, saturated market, which can pose challenges for new entrants.
- Skilled labour is costly, especially for specialists.
- Dutch regulations can be rigorous, especially in sectors like finance and healthcare.
Taxation Rates:
Corporate tax rate is 15% on the first €395,000 of taxable income and 25.8% on the income exceeding that amount. Various fiscal perks and deductions are available, especially for innovation and research.
Best Locations for Business:
- Amsterdam is the capital and is great for entrepreneurs and international business.
- Rotterdam is a major port city with strong logistics, trade and industrial sectors.
- The Hague is a political centre ideal for legal, governmental, and international relations businesses.
- Utrecht is a growing business centre with a focus on technology and innovation.
Other Considerations:
Due to its location and advanced infrastructure, the Netherlands is excellent for companies involved in international trade, logistics, and technology. The country’s commitment to sustainability and innovation further enhances its appeal to forward-thinking entrepreneurs.
Corporate tax rate is 15% on the first €395,000 of taxable income and 25.8% on the income exceeding that amount. Various fiscal perks and deductions are available, especially for innovation and research.
5. Ireland

Ireland is a highly attractive destination for forming a company in Europe because of its low corporate tax rate, English-speaking workforce and favourable economic environment.
The country has a strong reputation as a tech hub, hosting numerous multinational companies and startups.
Pros of Doing Business:
- At just 12.5%, Ireland offers one of Europe’s lowest business tax rates.
- An English-speaking country
- The regulatory framework is business-friendly, encouraging foreign investment.
- Home to many tech giants, including Google, Microsoft and Facebook.
Downsides to Doing Business:
- Dublin, in particular, has a high cost of living
- Highly competitive market, particularly in the tech sector.
- Economy’s reliance on global enterprises can pose risks during global downturns.
- Major cities face housing shortages, affecting employee relocation and living conditions.
Taxation Rates:
Corporate tax rate is 12.5% on trading income, with additional tax advantages available for research and development activities.
Best Locations for Business:
- The capital city of Dublin has a robust tech ecosystem and international business presence.
- Cork is a growing business hub with a focus on pharmaceuticals, technology and manufacturing.
- Galway is a lively city with strengths in medical devices and information technology.
- Limerick offers opportunities in the education, technology and manufacturing sectors.
Other Considerations:
Ireland’s membership in the EU provides entry to the European market while maintaining close cultural and business ties with the UK. The country’s robust legal framework and support for innovation make it an excellent choice for UK businesses seeking a friendly and dynamic environment for growth.
6. Spain

Spain is an appealing destination for forming a company in Europe. It is well-positioned, has a vibrant consumer market and enjoys a fantastic climate.
The country’s corporate and economic landscape offers good opportunities for entrepreneurs, especially in sectors such as tourism, technology, and renewable energy.
Pros of Doing Business:
- Spain’s location provides access to European, African and Latin American markets.
- Opportunities abound in tourism, technology, renewable energy and agriculture.
- Various government incentives and grants are available for foreign investors and new businesses.
- High quality of life can help in attracting and retaining talent.
Downsides to Doing Business:
- Despite a skilled labour force, there is high unemployment due to economic issues.
- Administrative procedures can be complex and time-consuming.
- While English is commonly spoken in business contexts, communication challenges may exist outside major cities.
- The tax system can be complex and challenging to navigate without local expertise.
Taxation Rates:
Corporate tax rate is 25%, with various deductions and credits available for specific sectors and activities.
Best Locations for Business:
- Madrid is the capital and economic hub, offering a large talent pool.
- Barcelona is great for startups, the tech sector and creative industries.
- Valencia offers opportunities in technology, trade, and logistics and has a growing entrepreneurial scene.
- Seville is an excellent geographical location for tourism, agriculture and renewable energy businesses.
Other Considerations:
Spain’s position and diverse economy make it an excellent choice for businesses looking to establish a presence in Southern Europe. The country’s attractive living conditions and cultural richness further enhance its appeal to entrepreneurs and investors.
7. Portugal

Portugal is a dynamic and appealing destination for starting a business in Europe. It is known for its warm climate, strategic location, and growing tech scene.
The country offers a supportive business environment with various incentives for foreign investors, making it an attractive option for UK entrepreneurs looking to expand into the EU market.
Pros of Doing Business:
- Excellent quality of life, which helps attract and retain talent.
- Cities like Lisbon and Porto are known for tech innovation and entrepreneurship.
- Various incentives and grants are available for foreign investors and startups.
- Easy access to European, African, and South American markets.
Downsides to Doing Business:
- Bureaucracy can be complex and time-consuming.
- High unemployment rates, despite a well-qualified workforce, due to economic issues.
- English speaking is limited to business contexts in major cities.
- The tax rate is higher compared to some other European countries.
Taxation Rates:
Corporate tax rate is 21%, with additional local surcharges that can bring the total up to 31.5%. Various deductions and incentives are available for specific sectors and activities.
Best Locations for Business:
- Lisbon, the capital city, has become known for its startup and tech scene.
- Porto has a growing focus on technology, trade and logistics.
- Braga is ideal for businesses in technology and innovation, with a strong entrepreneurial scene.
- Faro is a tourist spot that is ideal for hospitality and related industries.
Other Considerations:
Portugal’s location and growing tech scene make it an excellent choice for businesses looking to establish a presence in Southern Europe. The country’s high quality of life and supportive government policies further enhance its appeal to entrepreneurs and investors.
8. Czech Republic

The Czech Republic is an attractive destination for launching a company in Europe. It is known for its strategic location, educated workforce, and market potential.
The country offers a robust industrial base, an excellent built environment and a stable economic climate, making it a promising choice for UK entrepreneurs looking to expand into Central Europe.
Pros of Doing Business:
- Centrally located in Europe, providing easy access to major European markets.
- High education standards, particularly in engineering and technology fields.
- Transparent legal system and supportive government policies.
- Lower costs of living and doing business compared to Western Europe.
Downsides to Doing Business:
- Bureaucratic processes can be cumbersome and slow.
- English is commonly spoken in business, but proficiency varies outside urban areas.
- Navigating the tax system can be challenging without local expertise.
- Economy can be sensitive to fluctuations in the broader European market.
Taxation Rates:
Corporate tax rate is 19%, with various deductions and fiscal incentives available for specific sectors and activities.
Best Locations for Business:
- Prague, the capital, is known for its vibrant startup ecosystem and strong financial sector.
- Brno is a major tech and innovation hub with a focus on research and development.
- Ostrava offers opportunities in heavy industry, manufacturing and technology.
- Plzeň is known for its industrial base and engineering sector.
Other Considerations:
The Czech Republic’s central positioning and skilled workforce make it an excellent choice for businesses looking to enter Central European markets. The country’s strong industrial base and supportive government policies further enhance its appeal to entrepreneurs and investors.
Expanding into Europe offers immense potential for UK businesses
At J. Dauman & Co, we specialise in helping businesses navigate new markets. With our expertise in accounting, company formation, and strategic planning, we help you ensure a smooth and successful expansion. Let us help you unlock the opportunities Europe offers and drive your business growth. Contact J. Dauman & Co today to speak with an expert.