Before setting up a business in Europe, it is good that you first get to know what to expect, easiest country to start a business in Europe and countries with ease of doing business. You also need to know the regulations and requirements of starting a business in Europe. The EU is the second-largest economy in the world and starting a business in Europe gives you access to a large market and the best resources for doing business. It is the reason many people are seeking to set up businesses in Europe.
- 1 Requirements of Setting Up a Business in Europe
- 2 Choosing the Right Country to Set Up Your Business in Europe
- 3 Countries with Ease of Doing Business in Europe
- 4 Obtaining a Residency Permit in Europe to Start a Business
- 5 Register Your Business
- 6 Decide on Business Structure
- 7 Tax Implications
- 8 Business Banking in Europe
- 9 Summary on How to Set Up a Business in Europe
Requirements of Setting Up a Business in Europe
There are laws that regulate foreigners and how they can set up businesses in Europe. Foreigners seeking to set up a business in Europe need to secure:
- Business permits
- Residency permit
Residency permits are usually temporary. After some time, depending on the success of your business, you can secure a long-term residency permit. To get a residency permit to set up a business in Europe, some countries may require a business plan. The business plan will be examined by the labor and immigration authorities to determine if the company meets the economic needs of the country.
Some countries may require you to have minimum startup capital. For example, after Brexit, if you want to start a business in the UK, you must have at least 50,000 pounds to start a business and 200,000 pounds for family use and business operational costs. Some countries may also require you to be fully involved in the day-to-day running of the business.
You must also register your business with the local authorities. Each country has a department or agency that is deals with registering a business. You will be given a business tax identification number that you will be using for the purposes of paying taxes. Some countries may require you to register your business with chambers of commerce. The chambers of commerce can be a regulatory body or can be used to offer information, training and support to entrepreneurs.
Choosing the Right Country to Set Up Your Business in Europe
Before you can set up your business in Europe, it is good that you first decide on the best country where you can do business. Some of the things to consider when selecting the country to set up your business in Europe are the easing of doing business, corporate tax and how to register a business in that country. Choosing the right location for your business will play a critical role in its success.
Countries with Ease of Doing Business in Europe
There are several surveys by organizations whose main aim is to evaluate the business environment in European countries. Some of the issues that these surveys consider include ease of registering property, paying taxes, cross-border trading, and employing workers. Some of the highly ranked European countries for ease of doing business include:
- The UK
Obtaining a Residency Permit in Europe to Start a Business
It is becoming challenging for people outside of the EU to obtain residency permits to start a business in Europe. For residents of the EU, it is easy to obtain a residency permit. Once you get a residency permit to start a business, you are entitled to the same support, services, training and loans as a national of that country. That is why many countries have put stringent measures for non-EUs to obtain a residency permit. The business climate is not very friendly for non-EUs, but these regulations differ from one country to the other. For example, it is possible to apply for e-residency permit in Estonia. The e-residency permit allows you to have an EU registered company
Register Your Business
You need to register your business before you can start operating. Different countries have varying regulations regarding business registration. To register a business in Europe, you must the following requirements:
- Have a presence in any of the EU countries
- Have a minimum subscribed capital
- Have a registered office or head office in one of the EU countries
Decide on Business Structure
You can register a number of business structures in Europe. The registration process and requirements vary from one business structure to the other. Some of the business structures you can register in Europe include:
- Sole proprietorship
- Public Limited company
- Nonprofit organization
- Private company
Before setting up a business in Europe, you need to consider tax implications. There are some European countries with a low corporate tax of between 10% and 15%. These countries include Cyprus, Hungary and Ireland. With low corporate tax, it is very easy to set up a business while operational costs are low, thereby maximizing profits.
Business Banking in Europe
In order to manage your finances smoothly, it is advisable that you open a business bank account in Europe. Emerging online banks in Europe make it easier for you to open a business bank account online. Some of them allow you to have a non resident bank account as well as multicurrency account for you make payments or receive payments in the currency of your choice to avoid forex charges. Some of the banks to consider include the following.
Summary on How to Set Up a Business in Europe
It is challenging to set up a business in Europe as a non-member of the EU countries. However, if you are a resident of the EU, you can easily set up a business in Europe. You need to register your business and obtain a residency permit to start running a business in Europe.