Where Should I Start a Company in Europe in 2027

The European market is clearly interesting, with an economy projected to reach $31.4 trillion this year. Yet it can be a heavily bureaucratic and daunting task to start a business there depending on the country, and most importantly, choosing the right place can be the difference between success and an avoidable flop.

If you get the most important pieces right, you can profit from low taxes, operational ease, and finding the perfect investors for your business to grow. However, skipping this due diligence of finding the perfect business environment can leave you with unnecessary costs, unnecessary regulatory hurdles, or obstacles to scale. So let’s talk about what are the best places to start a company in 2027.

Switzerland

1. - There are countless reasons why Switzerland takes the lead as the number 1 most attractive business destination, not only in Europe but in the world. Boasting one of the lowest corporate tax rates (as low as 12% in Canton Zug), an ultra skilled workforce, a trustworthy banking system, a neutral government, and being one of the safest places in the world, Switzerland is a stable economic powerhouse.
    - TAX ADVANTAGES: The corporate tax in Switzerland is determined by each canton, (cantons are Switzerland’s individual provinces with local laws) with some cantons benefitting from only 12% corporate tax. This advantage plus no inheritance tax in certain cantons is a dream come true for many entrepreneurs, all while in one of the world’s most economically stable countries.
    - WORKFORCE: Switzerland has some of the world’s most skilled and multilingual labor force, which makes it perfect to grow a world class team. Some of the most favorable industries to startup in Switzerland are Finance, Fintech, and Pharmaceuticals. Most of the world’s top talent for those industries is already in Switzerland.
    - REPUTATION, INVESTORS, & OPPORTUNITIES: Switzerland is one of the world’s most business friendly and at the same time regulatory firm countries. This combo makes it the perfect combination for serious entrepreneurs and businesses who want to grow. The opportunities in Switzerland are endless when it comes to funding, finding investors, finding partners, and finding business opportunities. For any entrepreneur seeking to grow and embark on company formation, Switzerland is the ideal environment.

Monaco

1. - Monaco is a dream destination and often seen as the world’s pinnacle of success. So what is the real picture, and why is the world’s prettiest Principality not readily available to everyone?
    - TAX ADVANTAGES: Aside from being one of the sunniest places and beautiful destinations in the world, Monaco has an almost unrivaled tax system, with companies generating more than 75% of their turnover within the Principality being entirely exempt from corporate tax. There are also no personal income taxes, no property taxes, no council taxes, and no wealth taxes for its residents. Companies deriving more than 25% of their turnover from activities outside Monaco, however, are subject to a 25% corporate tax. Its tax policies clearly make it one of the best countries for International Tax Structuring. Monaco is at the least worth a visit for every entrepreneur.
    - INVESTORS: Monaco boasts the largest density of millionaires and billionaires from any country. Nearly 1/3 of its population has over $1 million in assets. Needless to say it’s one of the most surefire places on planet Earth to find investors and business partners.
    - ENVIRONMENT & REGULATION: The small Principality has one of the world’s most buzzing business environments, but also has some of the world’s most heavily regulated environments. Many markets are so highly regulated that certain business licenses may not be given out for decades at a time. Apart from this, business costs in Monaco can often surpass those of Switzerland and other countries, making it a perfect destination to only a certain handful of industries, businesses, and entrepreneurs that have already reached specific milestones needed to cover their operating costs.

Ireland

1. - Ireland is still one of the best countries for tech companies and startups. It’s a magnet for global corporations and startups because of its low corporate tax rate, presence in the European Union, and very business-friendly regulations.
    - TAX ADVANTAGES: Ireland clearly has the best corporate tax rate in all of the EU territory at 12.5%.
    - ENVIRONMENT & OPPORTUNITY: The country is a stronghold for tech and innovation. The largest tech companies in the world still house their European headquarters in Dublin. This makes networking, finding investors, and startup costs very favorable for any entrepreneur especially in tech. These are pros that are quite rare to find in any other country in the European Union. Corporate administration is also overwhelmingly easier for native English speaking entrepreneurs. The biggest difficulty in Ireland is perhaps finding the right talented and skilled team to put together.
    - STARTUP ADVANTAGES: Ireland provides entrepreneurs with many opportunities such as government-backed funding, grants, and R&D tax incentives. There are opportunities to go round here that make up for the difficulty in adjusting to Irish weather.

Luxembourg

1. - Luxembourg is the country within the EU with the most companies registered by foreign owners. Strategically sitting between France, Germany, and Belgium, it has some of the highest GDP’s per capita in the world. It also has AAA credit rating and is known as one of Europe’s most stable, business-friendly financial centers.
    - TAX ADVANTAGES: The corporate income tax in Luxembourg is 16%, with a reduced 14% rate for smaller companies. However, Luxembourg city does have some extras like the solidarity surcharge and municipal business tax. When these are added together, the combined tax rate in Luxembourg city is around 24% Even though it isn’t the lowest rate in Europe, the deductions associated make it a win. In Luxembourg there is an IP regime that exempts 80% of qualifying income from patents and software as well as an extensive network of tax treaties. Not to mention they boast the lowest standard VAT rate in the EU at 17%..
    - SOPARFI: Luxembourg’s crown jewel when it comes to business structuring is the SOPARFI (Société de Participations Financières). These are holding company structures that are used worldwide by entrepreneurs and investors. It’s just a normal, fully taxable company, only with a huge advantage. Its participation exemption gives qualifying shareholders the possibility of claiming dividends and capital gains entirely tax-free. This structure needs to hold at least 10% of the subsidiary, or a stake worth at least 1.2€ million in the case of dividends and 6€ million in the case of capital gains for a minimum of 12 months in order to qualify.
    - ENVIRONMENT & OPPORTUNITY: Luxembourg’s workforce is very international and multilingual, making it very easy to find employees, contract services, and find business opportunities in English, German, French, as well as many other European languages. Additionally, the government of Luxembourg invests heavily in profitable industries such as Fintech and Finance, Space Tech, and Investment Funds. It also helps startups through incentives such as the Fit 4 Start accelerator, Luxinnovation, R&D funding and grants, and the House of Startups. With as little as 1€ capital, entrepreneurs can create an SARL-S to set up shop in Luxembourg.

Malta

- International entrepreneurs have chosen to turn to Malta for several years now. It’s actually no wonder, considering the ease of having one of Malta’s official languages being English, having access to the EU market, and benefiting from Mediterranean weather plus one of the best tax systems in Europe.
  - TAX ADVANTAGES: The corporate tax rate in Malta on paper is 35%. However, the tax refund and full imputation in Malta allow shareholders to claim back 6/7 of the tax which is paid on profits, bringing the real rate closer to just 5%. Additionally, Malta does not charge withholding tax on dividends paid to non-resident shareholders.
  - HOLDING COMPANIES: Malta is an extremely popular destination for setting up a holding company. Dividends and capital gains from a participating holding of at least 5% of a company’s equity can be entirely exempt from tax thanks to the country’s participation exemption. If not, the shareholder can claim a full refund of the tax paid instead.
  - ENVIRONMENT & OPPORTUNITY: The national development agency of Malta, Malta Enterprise, provides grants for startups as well as soft loans and tax credits. Malta also has dedicated regulatory frameworks for industries such as Blockchain, Fintech and gaming. Being the smallest country in the EU means Malta also has a limited local market and pool of specialised talent. Opening a bank account can also take longer than usual because of strict compliance checks. However, most business owners can weigh up that Malta’s pro-business benefits, flexible tax system, and sunny weather outweigh the cons of bureaucracy.

There is always a best country for each individual business to start in, and that always depends on the context of the business as well as the shareholders. Although these are the top countries within the European market for foreign entrepreneurs in 2027, local landscapes as well as tax laws and regulations can often change. For this reason, it’s always good to check the latest tax rates and regulations with a local tax advisor before choosing your final successful business destination.