In this article, we will explain the advantages of opening a business in the EU and clarify the tax rates of companies in the EU.
One of the most important things to remember is that each European country has its own set of rules and laws governing immigrants from outside the EU who want to start a business. Although the European Union has a nominally shared immigration policy known as the Schengen agreement, there are as many separate rules governing immigration, employment, and business establishment as there are member countries. Some countries make it relatively easy to immigrate, receive a residence permit, and start a business, whilst others make it nearly impossible for non-Europeans to establish residency and begin a business.
Starting a business in Europe automatically provides you access to one of the world’s largest business hubs, along with sophisticated infrastructure, strong legal safeguards, and a qualified workforce. With a nominal GDP of $15.6 trillion, the EU remains the world’s second-biggest economy and the largest trading union. In 2020, nine European nations were ranked in the top 20 of the World Bank’s “ease of doing business ranking.” As a result, Europe continues to be one of the most appealing destinations for foreign investment and business development.
WHAT ARE THE REQUIREMENTS?
Despite the various rules regulating business permits for foreigners, most European countries have one rule in common: foreigners wishing to create a business do not require a work permit or any other sort of visa. They just require a resident permit in the country where they wish to set up the shop. These resident licenses are temporary initially, but depending on the success of your firm, you may be able to receive a long-term residency permit after a few years. There are various sorts of enterprises that might be established in order to qualify for a residency visa. You can establish your firm as a lone proprietor, a partnership, a branch or office of a foreign company, or a company registered in your host nation.
Each country’s national and economic interests, as well as other considerations, are considered to decide if your residency applicationis intending to start a business. There is just a limited possibility that your company plan will beapproved and you will be granted a residency permit unless your self-employment or commercial activity is likely to make a major contribution to the economics, culture, and/or sciences of your selected destination. Some nations need a business plan to acquire a residency visa to launch a business, which is then reviewed by labor and immigration authorities to determine if it meets the country’s economic needs. In essence, your company plan must demonstrate.
Aside from the legal criteria for establishing a business as a foreigner from outside Europe, each country has its regulations governing business permits, registrations, and so on. To operate your business, you must first register it with the local authorities (the jurisdictions and accountable government agencies differ by nation), obtain a business tax identification number, and register with the relevant social security administration.
In some countries, business owners are also required to be registered members of a chamber of commerce or another governing business group. Chambers of commerce are not only regulatory agencies in many nations, but they also give important information, business plan guidance, training, support, and resources for new businesses.
CAN NON-EU CITIZENS OPEN A BUSINESS IN THE EU?
It is difficult for non-EU citizens to register a corporation in a European country and conduct business freely within the European Union. All member countries are attempting to develop appealing systems to attract additional money, investors, and specialists. However, company registration, company management, and, most crucially, doing business with the company necessitate significant time spent in the EU. To operate and build your business effectively, you will require a residency permit. Without a physical presence, you can establish a remotely managed corporation. However, we believe that it is always preferable if you directly manage your firm.
Gurcan Partners is a Law and the Consulting firm. Our professional team can assist you at all steps of incorporation and investment process in Europe.
IN WHICH EU STATE SHOULD I OPEN A BUSINESS?
In a continent with 44 countries, deciding where to start a business might be tough. While several of these countries benefit from EU membership, they are still fighting for investors and entrepreneurs, and each has its unique set of strengths and disadvantages. The eight finest European countries for starting a business are listed below. These countries exhibit a complete range of benefits for European startups and branches, including low regulation, great talent, a high standard of living, and access to large subsidies and investments.
STARTING A BUSINESS IN GERMANY
Germany, Europe’s largest economy and industrial powerhouse, is a secure bet for most firms. Germany’s economy appears to weather all storms, and its businesses benefit from smart fiscal policies and strong leadership. It is equally inviting to small and medium-sized companies – the legendary Mittelstand of steady, mid-sized firms – as it is togiant corporations. Because of Germany’s economic strength, it does not always need the most competitive policies, and taxes (and bureaucracy) might be high. However, with generous investment and talent visas, a high level of English proficiency, and some of the lowest rents in major European cities, it is also an incredibly friendly environment for international investors.
The advantages of starting a business in Germany
• A robust economy
• Strong infrastructure
• High level of English competence
• Generous visa programs
• Living expenses are relatively modest.
STARTING A BUSINESS IN THE CZECH REPUBLIC
The Czech Republic is a rising star for new businesses, established businesses, and branches of larger corporations. As a member of the EU, it benefits from a prime location in the heart of Europe. Its advanced transportation system, which is among the best in Central and Eastern Europe, positions it as a significant European center for transitions, connections, and ties to Western, Eastern, and Central Europe.
STARTING A BUSINESS IN HUNGARY
Hungary, being a thriving economy in the heart of Europe and a member of the European Union, provides excellent chances for international enterprises to invest in the country. Hungary has the lowest corporation tax rate in the EU, making it a particularly appealing place to invest.
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STARTING A BUSINESS IN POLAND
Poland offers low taxes, effective investor rights protection, simplicity of incorporation, a stable macroeconomic climate, and access to skilled labor force all attract investors. Poland is also a regional leader in development, innovation, and start-up support.
WHAT ARE THE TAX RATES OF COMPANIES IN THE EU?
Businesses in Europe, like practically all countries throughout the world, are required to pay corporate income taxes on their profits. The amount of taxes that a company eventually pays on its profits is determined by both the corporation tax base and the corporate tax rate. Today’s map compares the statutory corporate income tax rates in European OECD countries.
Corporate income tax rates in the EU countries, as in most other parts of the world, have fallen in recent decades. The average company tax rate was 32.6 percent in 2000 and has steadily reduced to 21.3 percent now.
Portugal is leading with a 31.5% corporate income tax rate among European OECD countries, the lowest corporate income tax rate has Hungary with 9 percent.
• Germany: 29.9%
• The Czech Republic: 19%
• Hungary: 9%
• Poland: 19%
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Starting a Business in The EU
Simge Ayse Pala LLBs
All rights reserved. All rights of the Starting a Business in The EU article belong to Gurcan Partners International Law Firm. The author has no responsibility for the information in this article. This article is prepared just to inform.
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