The Best European Countries for Startups

The Best European Countries for Startups

If you’ve decided to expand your business in 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. From funding to taxes to the availability of talent, many factors go into deciding on the best country to start a business in Europe.  This is why we reported to you a list with the best European countries for startups explaining for each main features. 



Denmark is one of the most entrepreneurial countries not only in Europe but also in the world. The startup process indeed can be done with just a few simple steps and at minimal costs. All these factors influenced the fact that Denmark is one of the best European countries for startups. 

This nation has also benefited from reforms, such as making paying taxes less costly for companies by reducing the corporate income tax rate and reducing the paid-in minimum capital requirement.

Many ranking charts consider Denmark at the top of trading across borders, and the World Bank attributes this to the importance placed on online procedures for efficient business administration. In Denmark, almost all investigated transactions can be conducted online, and the introduction of an online platform allows simultaneous completion of business and tax registration.

Also, the key to Denmark’s pro-business climate is the flexible labor market, known as ‘flexicurity,’ where companies can easily hire and fire workers, while out-of-work adults receive unemployment benefits. The Danish workforce is among the most productive in Europe, and no restrictions apply regarding overtime work, allowing companies to operate 24 hours a day, 365 days a year.



Business is flourishing in Romania thanks to a booming economy. This country is a particularly attractive destination for tech startups

The communist legacy of emphasis on science, mathematics, and technical education means there is a large pool of skilled workers. The country also boasts one of the fastest broadband internet speeds in the world (behind only Singapore, Hong Kong, South Korea, and Iceland), and that has aided the industry’s rapid growth, with its share of GDP expected to double to 12 percent by 2025.

Operating costs and overheads are also low, with commercial property, energy, and utilities between three and five times cheaper than in Western Europe. There are also tax incentives, including foreign tax credits and tax exemption for profits reinvested in equipment.

For Romanian business owner Marin Lachimov – founder of 3D Human Development – the government’s grant scheme has been particularly effective in encouraging entrepreneurship. “The government is giving €40,000 as a grant to Romanians living abroad to start a business in the country,” he explains. “That was a good start for entrepreneurs and has helped Romania to really develop.”

He adds that the growth of companies such as Ford and Dacia in the country has also led to more small businesses developing to support their operations, thus making Romania one of the best European countries for startups.



This little Baltic country has recently attracted many startups and tech companies. There is unlimited free public WiFi in cities, including the capital Tallinn, which is also home to a science and technology park called Technopol, helping support approximately 180 companies.

The electronic residence program makes it very easy to establish a business in Estonia. At age 15, citizens get Estonian e-identities – granting them online access to an estimated 4,000 services, including banking, contracts, business registry, and tax services. As of last October, the government moved to allow non-nationals to access e-identities, too.

Taxes are also a breeze in Estonia. According to the Tax Foundation’s 2014 International Tax Competitiveness Index, Estonia has the most competitive tax regime in the developed world; perhaps also this feature has lead Estonia to become one of the best European countries for startups. It doesn’t charge a corporate tax in the traditional sense. Instead, it taxes distributed corporate profit at the capital gains rate of 21 percent. 

Should a company invest its profits back into the business, it would face no tax expense. Estonia additionally provides a 100 percent exemption on all foreign-earned income, in what’s known as a ‘territorial’ tax system.



Sweden, as the other Scandinavian countries is an excellent destination to start a business. Not only does it currently offer a corporation tax rate of 22 percent, but it’s also looking to further cut this to 20.6 percent by 2021, with the purpose of further boosting business activity.

The country’s progressive attitude to social security means entrepreneurs feel free to take more significant risks, knowing there is a reliable safety net should things go sideways. Generous parental leave allowances also mean startup owners can run a business while comfortably raising a family. Indeed, research shows that welfare actually encourages entrepreneurship.

Sweden’s transparency in terms of information and data is another reason to set up shop there. For decades you have been able to look up anyone’s salary, for example.

Entrepreneur Lars Hammersholt Petersen believes this openness to sharing information is particularly beneficial for startups. The CEO and director of Benchmark IT explains: “Because data is open and free of charge, it’s easy to target your product or service, especially if it is quite niche.”



Following the same behavior of its neighbor, Estonia, Lithuania is fast becoming one of the best European countries for tech startups, and this is not surprising.

Businesses starting up in Lithuania have access to a fantastic pool of talented young graduates. The country, being the first in CEE for mathematics, science, and technology graduates per capita, is able to offer a highly qualified IT talent pool.

The country also has the fastest public WiFi in the world. According to Rotten WiFi, a testing service that evaluates public WiFi networks based on speed and customer satisfaction, Lithuania dominates the competition when it comes to the average download and upload speeds found on public WiFi networks.

There’s plenty of support for startups and small businesses, too, with numerous entrepreneurial events held every year, including Silicon Valley comes to the Baltics, with more than 1,500 participants, Game Jams and hackathons mostly organized by Startup Lithuania.

Finally, Lithuania benefits from its location on the crossroads of three lucrative markets (Western Europe, Scandinavia, Russia, and CIS region), and is the largest market out of all Baltic countries.



Known for its open culture and emphasis on innovation and entrepreneurship, the Netherlands has ranked as one of the best European countries for startups by many entrepreneurs. It is home to a thriving, collaborative, and vibrant tech startup ecosystem. New businesses are encouraged in the country by the tech-savvy, highly educated, and English-speaking workforce. Adyen, Elastic, Picnic, Takeaway, etc. are among the fast-growing tech firms in the country.

This central European country has thrived since consolidating its efforts under the Startup Delta banner. The Netherlands benefits from an extremely well-educated population – many graduates speak three or four languages at a conversational level – and almost unrivaled 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.



Talking about south Europe, we cannot insert on our list Spain with to of the most important tech cities in Europe: Barcelona and Madrid. With the number of successful startups in the mobile and tech sectors housed on the soil of Barcelona, the city is believed to increase in investment capital shortly. And so, it is often called the “Smartest city.”

Spain also offers the benefit of an excellent educational system that provides high-profile employees as well as the enjoyable and affordable lifestyle of its citizens.

In Spain, Madrid and Barcelona are notable spots in the tech startup landscape. Barcelona is considered one of the smartest cities in the world and has successful tech startups across industries; this inevitably leads Spain to be one of the best European countries for startups.



Next to Spain, there is Portugal, which tech ecosystem has flourished drastically. Private equity investments have increased considerably over recent years. The country’s capital Lisbon is also becoming a major attraction for tech conferences such as Web Summit, which will happen for ten years as it completed a trial of three years. Companies like Yoochai, JungleAI, Linkilaw, etc. are based in 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 students and 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 enormous strides have been made in recent years, making Portugal one of the best European countries for startups. 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.

Final Thoughts


These were some of the best European countries for startups. We hope that you will soon start a business in one of them, or also other ones which we did not talk about, remembering all the factors that we presented previously.

“Wherever you go, go with all your heart” – Confucius

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