Company registration in Europe: How and where to set up your business in 2025

Registering a company in the EU opens the door to a prestigious international market. Companies can access reliable banks and government support programs, work with the European currency, and benefit from a stable economic and legal system. Entrepreneurs seek to establish companies in Europe to simplify transactions with foreign partners, build trust in their projects, optimize taxes, and potentially obtain residence permits.

Each European country has its own registration rules and requirements for foreign businesses. In some countries, the process can be completed online in a day, while in others, it requires an in-person visit to the relevant office and the services of a notary. Some countries offer low tax rates, while others offer convenient immigration programs or attractive startup regimes. Therefore, when choosing a country in Europe for company registration, consider your business objectives and personal goals.

If you want to compare the company registration conditions in other countries, iWorld has a useful comparison table.

7 benefits of registering a business in Europe

Foreigners planning to start a company abroad often choose to register their business in Europe for the following reasons:

1. Prestige and legal protection.

   When you open a company in an EU country, you automatically become part of a unified corporate law system. The system clearly defines the rules for all companies, whether they are startups, sole proprietorships, LLCs, or other types of businesses. Operating according to European standards fosters trust with counterparties, partners, and government agencies.

2. Stable currency.

   If your company operates in the Eurozone, you won’t have to worry about currency fluctuations. All transactions are conducted in euros. It reduces costs and simplifies pricing, especially for international contracts.

3. Access to the European Market.

   A company registered in an EU country automatically gains access to the European Economic Area (EEA) market. This includes countries outside the EU, such as Norway, Iceland, and Liechtenstein. You can sell goods, provide services, hire specialists, and transfer capital freely without additional permits or bureaucracy.

4. Convenient and Fast Bank Payments.

   The Single Euro Payments Area (SEPA) system enables cashless payments throughout the European Union and beyond. As of October 2025, the system covers 41 European countries.

5. Tax Optimization.

   When registering a business, you can choose a country with an optimal tax regime. For example, Hungary’s corporate income tax rate (CIT) is only 9%. Some countries offer tax incentives depending on the type of activity. In Spain, startups can expect a reduced CIT rate of 15% for the first four years instead of the standard rate of 25%. In Bulgaria, Cyprus, and other countries, a reduced VAT rate applies to certain types of goods and services.

6. EU Government Support Programs.

   In France, for example, the entrepreneurship support organization Bpifrance provides businesses with financial, informational, and organizational assistance. Germany’s EXIST program provides federal grants to university-based startups. In Spain, the state agency ICEX supports investors and helps launch projects. Portugal’s AICEP provides comprehensive business support services and is responsible for export development and investment attraction. Additionally, there are pan-European programs, such as Startup Europe and Erasmus for Young Entrepreneurs.

7. Obtaining a European residence permit.

   Registering a business can be the first step toward immigrating to the EU. Depending on the country and your situation, you can obtain a residence permit through business for a period of one to five years in Lithuania, France, Estonia, Spain, and several other countries. Some programs (the «Talent» residence permit in France, startup development in Spain), allow you to relocate with your family immediately.

Entrepreneurs who want to relocate to Europe long-term but don’t have the means to launch a startup or invest large sums are considering options elsewhere. In Serbia, for example, you can obtain a temporary residence permit by starting a business, which is renewable for up to 3 years. Permanent residence in Serbia is typically granted after 3 years, whereas in most European countries, it takes 5 years.

The requirements for starting a company

Requirements for start-up capital, registration, licensing, management, and reporting vary by country in Europe. Before opening a company in the EU, it’s important to find out which countries recognize tax residents. Generally, taxes are levied where the company is located.

The minimum authorized capital requirement depends on the country and the legal form of the business. For example, an LLC (SARL) in France has no minimum capital requirement—you can contribute as little as EUR 1. In Lithuania, the minimum is EUR 2,500, and in Germany, it is EUR 25,000.

Many European Union countries (Estonia, Germany and others), do not require a residence permit to register a business. However, if you want to personally manage the company at its location, a residence permit is mandatory. In France, for example, a long-term VLS-TS visa is sufficient.

Most EU countries establish a list of activities for that require a license or authorization from the relevant authority. For instance, providing financial services in France necessitates permission from the French Prudential Regulation Authority (ACPR). In Germany, the Federal Financial Supervisory Authority (BaFin) is responsible for issuing these licenses. In Portugal, payment institutions are licensed by the Central Bank (Banco de Portugal).

The set of requirements for effective company management is practically the same in all European countries:

• a legal address;
• a bank account;
• registration with the tax authorities;
• registration with social security funds.

Additionally, companies in Europe must maintain accounting records and submit annual reports to the relevant authorities. In Portugal, for example, accounting and tax returns (IES/DA) are submitted online through the financial portal. In Spain, accounting documents are submitted to the Commercial Register.

Sole proprietorship in Europe: Can you register as an SP or an IE?

There is no single form of business in the European Union that precisely defines the status of a sole proprietor (SP) or an individual entrepreneur. Each country has its own terminology and rules regarding registration, taxation, and reporting.

For instance, Germany’s equivalent of a sole proprietorship is the Einzelunternehmen (sole proprietor)—an individual conducting business in their own name. In France, a simplified regime for self-employed individuals with preferential tax and reporting systems is called an auto-entrepreneur. In Spain, a similar activity is called Trabajo Autónomo.

Registering as a sole proprietor in Europe does not automatically entail obtaining a residence permit. However, in some countries, it may be grounds for obtaining residency. These countries include Spain, France, and Portugal. In most cases, to obtain a residence permit, one must prove professional competence by providing a diploma or work experience in the chosen field.

When choosing a business structure, it is important to consider the residency requirements of the country. In Germany, for example, you must be a resident of the country to operate a sole proprietorship. Non-residents, however, can establish a limited liability company (GmbH), and there are no restrictions in this case. The main requirement is that the company has a registered office in Germany.

Registering a sole proprietorship in Europe is easier, faster, and cheaper than opening a company because of minimal document requirements, simplified accounting, and tax reporting. However, sole proprietors are fully liable for their obligations. This means that if they go into debt, their personal assets (such as an apartment, a car, or savings) are at risk. Registering a legal entity in Europe (e.g., an LLC) limits liability to the authorized capital. This protects the personal assets of the company owners.

Which country is the best place to open a company in Europe?

There is no single best country for registering a company in the EU or Europe. Everything depends on your goals and budget. Spain and France are advantageous for IT startups; Hungary, Bulgaria, and Cyprus are ideal for tax optimization; and Estonia is one of the most favorable countries for business immigration.

Countries with the easiest registration requirements

In Estonia, you can register a business online after obtaining electronic residency. The e-Residency card enables access to government portals but does not grant the right to reside in the country. The card is issued through the e-resident.gov.ee service and delivered to a pick-up location of your choice. If you are abroad, you can pick it up at the embassy.

You can also register your business through this portal. If you plan to manage your company from outside Estonia, you must appoint a contact person to represent your interests in the country. A list of such persons is available on this website. Company registration takes 1-2 days. Popular business forms in Estonia include sole proprietorships, private limited liability companies, limited liability companies, and joint-stock companies.

In Portugal, company registration applications must be submitted in person, though there is a one-stop shop called Empresa na Hora. With a single application, you receive a registration certificate, a social security number, and the necessary identification documents. All you need to do is visit your nearest Empresa na Hora office, complete the necessary forms, and submit the required documents. The process takes less than an hour.

In Spain, you can apply for company formation online through the Business Information and Creation Network (CIRCE). You need to fill out a single electronic form, and specialists from the Center for Assistance to Entrepreneurs (PAE) can assist you free of charge. Once your application is approved, you must meet with a notary to submit the documents. Then, the company is registered with the Commercial Registry, Tax Office, and Social Security system without your involvement. You can also apply for business licenses, if required by law, along with company formation.

A comparison of European countries by ease of business registration

The best European countries for tax optimization

A basic VAT rate of 27% is levied on the sale of goods and services. However, certain categories are exempt from the tax, such as medical drugs, which are taxed at 5%.

In Bulgaria, the CIT rate is 10%. Tax exemptions are available for certain activities. Investment funds and higher education institutions, for example, are exempt from CIT, while agricultural producers are subject to withholding of up to 60%. VAT is applied at a basic rate of 20%. For the supply of certain goods or services, the rate is reduced to 9%. This reduced rate applies to hotel accommodations, baby food, and tourism services.

In Cyprus, the corporate income tax rate is 12.5%. Profits from the sale of securities, foreign exchange trading, and certain other types of income are exempt from CIT. A partial exemption is provided for income from intellectual property. The standard VAT rate is 19%. Certain goods and services are taxed at 5% or 9%. For instance, the 5% rate applies to hairdressing and private household services, as well as the sale of juices and confectionery. A 9% rate applies to restaurant services and hotel accommodations.

European countries with the lowest corporate income tax rates

Some EU candidate countries also offer favorable tax rates. For example, Montenegro uses a progressive tax rate based on profit. If a company’s income is less than EUR 100,000 per year, it is taxed at a rate of 9%. In any case, Montenegro’s maximum CIT rate is 15%, which is lower than in many EU countries. Serbia also has a CIT rate of 15%.

The best countries for founding IT companies and startups

Spain is considered one of the most attractive European countries for registering and developing startups. If your project is recognized as innovative, you can receive a 15% corporate income tax benefit (instead of the standard 25%) for the first 4 years after becoming profitable. Additionally, you can defer corporate income tax payments for the first two tax periods with a positive tax base without providing guarantees or facing penalties.

Recognition as an innovative company is carried out through the national company ENISA. It is an online procedure: register on the official website and complete the necessary forms. Newly established companies and those established for no more than 5 years are eligible to participate in the program (for strategic industries or when developing a completely new technology in Spain, the minimum period is 7 years).

Like in other countries, startups in France can count on comprehensive government support. They are exempt from employer contributions for family benefits and social security in the event of death, illness, disability, old age, pregnancy, or childbirth. No special recognition procedure is required, and a corresponding certificate from the tax administration is available upon request. A startup can receive JEI (Young Innovative Enterprise) status if it meets the following criteria:

• Founded less than eight years ago.
• Has fewer than 250 employees.
• Has a turnover of up to EUR 50 million or a balance sheet total of up to EUR 43 million.
• Research and development (R&D) expenditures of at least 20% of total expenses.
• At least 50% of the capital must be owned by individuals, other JEIs, scientific organizations, or investment companies.

It is advisable to consult with experts in international law who specialize in supporting startups to avoid mistakes and maintain your eligibility for benefits.

Portugal has developed a system of tax incentives for businesses in the R&D sector. Expenses for personnel involved in research, the purchase of fixed assets, the registration, acquisition, and maintenance of patents, among other costs, are deductible from corporate tax.

To be recognized as a startup, you must apply to the Portuguese Association for the Promotion of Entrepreneurship (Startup Portugal). The application is submitted online. The basic requirements for obtaining the status are:

• The company must be up to 10 years old.
• Has fewer than 250 employees.
• Annual turnover does not exceed EUR 50 million.
• The company was established from the ground up and does not have a controlling interest (directly or through a chain of custody) from a larger organization.
• The company has a head office or permanent establishment in Portugal and employ at least 25 people in the country.

A company in Portugal must also meet one of the innovation requirements. However, if you do not have formal confirmation, you can still apply to Startup Portugal if you can show that you have an innovative product or service or a rapidly growing business. If your case is compelling enough, you can obtain startup status and then a Portuguese startup visa.

Top EU countries offering startup support

The best European countries for immigration through company formation

In Spain, entrepreneurs with innovative projects can obtain a 3-year residence permit, which is renewable for 2 years at a time. After 5 years, they can apply for permanent residency. Another advantage of this program is that startup founders can immediately bring their family, including their spouse, children, and dependent parents, with them. Residence permit applications are submitted remotely to the Department for Large Companies and Strategic Groups (UGE-CE), where they are processed within 20 business days.

France is also an attractive immigration destination for entrepreneurs. The country offers a «Talent» residence permit for 4 years to founders of innovative or traditional businesses. Applications are submitted online through a special service provided by the General Directorate for Foreigners. You can move with your spouse and minor children, who will receive family «Talent» residence permits. After 5 years of legal residence in France, you can apply for an EU long-term residence card, which is valid for 10 years and can be renewed. After 5 years of residency, you can also apply for French citizenship. Similar conditions apply to obtaining a French residence permit by registering a regular company.

One of the long-term business residence permits is available in Estonia for up to 5 years. It allows entrepreneurs to develop a startup project. There are no specific deadlines for launching a business; the main thing is that the company is registered. This program allows you to relocate with your family immediately. Permanent residency can be obtained after 5 years of legal residence in Estonia.

8 countries that offer affordable immigration terms through business registration in the EU

How to open a company in Europe: The main steps

The exact procedure for opening a company in the European Union varies by country. However, the basic registration process is relatively similar:

1. Select a country and business structure

   First, determine where in Europe you want to register your company. The choice depends on your goals. If you’re looking for a simple business project, Poland or Lithuania are suitable options. However, if you’re interested in a startup, Spain or France are worth considering. Next, you need to decide on the business structure. For example, registering as a sole proprietorship requires fewer documents and formalities but offers fewer opportunities for scaling and raising capital than registering as an LLC. In order to avoid being turned down for business registration, it’s important to consider all the details (such as requirements for authorized capital and hiring a local representative). For this reason, it’s best to consult with lawyers when choosing a country for your company, as they can select the best option based on your situation and needs.

2. Prepare the incorporation documents

   Compile a dossier including the charter and the founding resolution/memorandum. You will also need to provide information about the shareholders and directors, as well as a document appointing the manager. You will also need to provide a lease agreement or registered office address and proof of payment of the authorized capital (if required). Sole proprietors must confirm their personal information (ID), provide their address and phone number, and present their tax identification number.

3. Registration in the state register

   After preparing your dossier, a request is submitted to the authorized service to enter information into the business entity register. Depending on the regulations of the specific country, the request can be submitted online or in person. In France, Spain, Estonia, and Ireland, registration is completed online. In Portugal and the Netherlands, the request must be submitted in person. In Germany, registration with a notary is mandatory.

4. Tax registration and identification number

   In some countries, company registration with tax and social services occurs simultaneously, using the «one-stop shop» principle. In Spain, for example, entrepreneurs submit documents to a notary and then simply receive the company incorporation document and tax identification number without any further involvement. If a company supplies goods and services, it must also register for VAT.

5. Open a corporate bank account

   Opening a bank account usually requires providing incorporation documents and information about the beneficiaries and directors as part of the KYC (Know Your Customer) procedure. Other required documents include a certificate of incorporation or an extract from the commercial register. Popular banks include: Deutsche Bank, Sparkasse (Germany), ING, Rabobank (the Netherlands), Caixa Geral de Depósitos and Novo Banco (Portugal), Crédit Agricole, and BNP Paribas (France).

6. Additional steps depending on the specifics of the business

   If your business is related to activities that require special government regulation (e.g., financial and credit services), you must register the company and obtain a license in the selected EU country. You will also need to consider renting office, retail, or industrial premises. Even if you don’t plan to conduct commercial activities, you must register an office address that will serve as your channel of communication with government agencies.

If you plan to both open a company in Europe and relocate to the chosen country, you must apply for a residence permit. Typically, foreigners first apply to embassies/consulates for national visas. Then, upon arrival in the country, they must visit the immigration service to obtain a residence card. In Spain, for example, residence permits for startups are issued without a special visa; a tourist visa is sufficient for entry.

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Conclusion

Registering a business in the EU is an effective solution for those who want to enter the European market, optimize their taxes, access a reliable banking system and government support programs, and relocate abroad. However, there is no one-size-fits-all approach to choosing a country; it depends on your goals, budget, project scale, and personal plans. In simple terms, the general idea looks something like this:

• Spain and France are excellent choices for startups.
• Portugal is suitable for those who value a simple and quick registration process.
• Estonia is ideal if you plan to manage your company remotely.
• Hungary, Bulgaria, Cyprus, Montenegro, and Serbia are best for reducing your tax burden.
• Lithuania, Poland, and the Czech Republic offer a balance between company formation requirements, taxes, and speed of launch.

Registering a company in Europe is entirely possible, especially if you choose the right country and business structure, gather the necessary documents, and understand the procedural aspects. If you’re unsure about the legal complexities but want to protect yourself from the risk of refusal, consider hiring specialists in international law. They will help you avoid mistakes, save time, and navigate all stages of the process without unnecessary bureaucracy and stress.