How to start a business in Europe
There are huge benefits to starting a business in Europe, giving you access to one of the world’s biggest business regions, home to 27.5 million businesses. Europe has a sophisticated infrastructure, strong legal protection and a highly skilled workforce. It is home to the second largest economy in the world with a 13.94 Trillion Euros GDP in 2019. Like everywhere else in the world, Europe has been affected by COVID 19, however is expected to be fully recovered in the next two years. On the contrary, the US economy is predicted to shrink by 6.5% in 2020 according to the Federal Reserve, but will only grow by 3.6% in 2021 according to the forecasts, slowing down the recovery and possibly not bringing the country to the pre-COVID levels in 2022. With this in mind, investing, starting or expanding your business in Europe can be encouraged.
Best countries to start a business in Europe
Starting a business in the UK
The United Kingdom has the sixth largest economy by nominal gross domestic product (GDP)and the ninth largest by purchasing power parity (PPP). The United Kingdom was the world’s first industrialized country and remains powerful due to its advancements in economic, cultural, military, scientific, technological and political influence internationally.
The UK has a fantastic reputation as a location to start a business and according to World bank, the UK has one of the highest ease rating of doing business in the world. The UK is also home to a strong infrastructure which is important to the overall growth of any business. There are ongoing infrastructure improvements in areas including energy, transportation, waste management and telecommunications.
The UK taxation system is manageable with a set corporate tax rate of 20% for profits below £300,000, for profits over the threshold, a tax bracket applies. In addition, the UK has double the taxation agreements through treaties with other countries, therefore most UK based companies will not pay corporate tax on foreign dividends. UK companies can also be used in tandem with an offshore company to enjoy a tax rate of less than 5%. This type of structure is commonly known as an ‘Agency company’ where an offshore company acts as a nominee or agent for an offshore principal. This set up offers an onshore ‘face’ with all the offshore benefits.
Registering a company in the UK required a minimum of 1 shareholder and 1 director and all names of company officers will appear on a public record. All UK companies are regulated under the Companies Act 2006 and are governed by the UK Companies House.
The cost of setting up a limited company in the UK is considered very low compared to other European jurisdictions and are ideal for businessmen, consultants, traders, custody of real estate, ecommerce, expatriates, inheritance purposes and the holding of intellectual property rights. Starting a business in the UK can take as little as 24 hours.
Required Documents
- A certified copy of your passport or ID card
- Proof of Domicile (issued within the last 3 months)
Find out more about UK incorporation here or contact our team.
Starting a business in Switzerland
Located in central Europe, Switzerland is a landlocked country bordered by Italy, France and Germany. It is a highly developed country with the highest nominal wealth per adult and the eighth highest per capita gross domestic product and has been considered a tax haven due to its low tax levels of 13.99% and privacy laws.
Switzerland has a fantastic, stable reputation in the business world, and currently ranks at number 20 out of 189 countries in the ease of doing business index. It has also been ranked as one of the least corrupt countries in the world.
Switzerland’s most important economic sector is manufacturing, largely consisting of the production of specialist chemicals, pharmaceuticals, musical instruments and scientific instruments. The largest exported goods are chemicals, electronics and watches. Aside from agriculture, economic and trade barriers between the European Union and Switzerland are minimal, allowing free trade agreements worldwide. Many large brands have their European headquarters in the region too.
To incorporate a Swiss company as a foreigner you must have at least one director residing in Switzerland, which can be a foreigner permanently residing in Switzerland. Companies in Switzerland are governed by The Canton’s Register act and names of directors can be anonymous depending on whether the company is registered as a SA or SARL. Paid up capital is also required for SA incorporation (CHF50,000) and SARL incorporation (CHF20,000).
Swiss companies are straight forward to incorporate, taking up to 10 days.
Documents Required
- A certified copy of a passport or ID card
- Proof of domicile (issued within the last 3 months).
Find out more about Swiss incorporation here or contact our team.
Starting a business in Gibraltar
Located at the southern tip of the Iberian Peninsula and bordered by northern Spain, Gibraltar is a British Overseas Territory and is considered a very stable jurisdiction with an excellent reputation. Its economy is largely based on tourism, online gambling and financial services.
There are many benefits of incorporating a company in Gibraltar, including no capital gains, wealth, sales, estate or value added tax. Additionally, no tax is payable on dividends, interest paid on resident individuals, on interest paid to non-residents and on dividends between Gibraltar companies. Non-residential companies can also take advantage of numerous offshore regimes.
All Gibraltar companies are regulated under the Gibraltar companies’ ordinance, 1930 and governed by the Gibraltar Financial Services Commission.
On 31st January 2020 the UK left the European Union and subsequently so did Gibraltar. Under the terms of the transition phase in the Brexit withdrawal agreement, Gibraltar's relationship with the EU continued unchanged until the end of 2020 when it was replaced by the EU–UK Trade and Cooperation Agreement. On 31 December 2020, the UK and Spain agreed in principle on a basis for the EU and the UK to negotiate an agreement through which Gibraltar would participate in the Schengen Area, to avoid a hard border with Spain. The arrangements have not entered into force, but both sides aim to keep delays at the border at a minimum in the meantime.
Gibraltar company registration is a fairly straight forward process, requiring a minimum of one director, one shareholder and no paid-up capital requirement.
Required Documents
- A certified copy of your passport or ID card
- 2 separate original and certified proofs of domicile (issued within the last three months)
- An original professional reference letter (from a lawyer, accountant, notary or bank)
- An original financial reference letter (from a bank or accountant)
- A signed business plan and curriculum vitae
Find out more about Gibraltar incorporation here or contact our team.
Explore our other European jurisdictions here
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