Europe remains a key destination for international business expansion. Since 2022, the number of Ukrainian companies operating in European countries has grown significantly, which is not surprising given that the EU market comprises over 450 million consumers. This offers numerous new opportunities for Ukrainian entrepreneurs to effectively develop their businesses, including a wide selection of financial instruments, significant opportunities for profitable partnerships, various government support programs, and more. However, registering a legal entity, setting up core business processes, and managing them often entails various organizational and legal risks.
Lawrange Attorneys Association is well versed in all the nuances of establishing companies abroad, including in the EU. Our team members have extensive experience in resolving various business issues related to international corporate law and fintech. For many years, we have provided effective legal support for businesses in Europe, helping various Ukrainian companies successfully integrate into the European economy.
What Is Legal Support for Business?
Both new and experienced entrepreneurs regularly face a variety of legal challenges: from choosing the optimal legal structure to resolving regulatory compliance issues and even lawsuits. Effective legal support is a comprehensive set of professional services designed to protect a business from any potential risks. It’s important to be prepared for any challenging situation to avoid being caught off guard. That’s why the best way to adapt your business to a new market is to hire a comprehensive set of legal services.
Types of Companies for Doing Business in Europe
The choice of legal form determines subsequent taxation, the level of liability of participants, scalability prospects, and more. When planning to enter the European market, any legal form can be chosen, but it is important to consider the specifics and goals of the business, the amount of start-up capital, and the legal nuances of the specific EU country. Several popular types of companies are often chosen by non-EU residents to enter foreign markets.
Limited Liability Partnership (Ltd / GmbH / OÜ / SARL)
The most common legal form among small and medium-sized business owners. It provides all participants with limited liability and constitutes a separate legal entity. It is called differently in different countries (for example, GmbH in Germany and SARL in France), but the essence is the same: to distribute risks and resources among all participants.
Joint-Stock Company (AG / SA / PLC)
European JSCs are characterized by a uniform management structure and limited shareholder liability limited to the value of their shares. Such legal entities can raise significant capital by issuing shares and bonds. The main advantage of JSCs is the mutual recognition of national companies—meaning that a company registered in any European country can operate throughout the EU without additional legalization procedures.
Branches and Representative Offices of Foreign Companies
Branches are often chosen when seeking a quick business relocation to Europe. However, it’s important to remember that in most parts of the EU, branches do not grant a company legal status. Such a legal form is needed solely to continue conducting business in the same manner as the parent company. A local manager must be appointed.
Representative offices in the EU are used to organize limited office operations in a new country. They do not imply direct business activity, as they do not have legal status. A local manager must also be appointed to represent the interests of the parent company.
Holdings and Corporate Groups
Holdings and corporate groups in EU countries typically strive for tax optimization through preferential regimes and international treaties. These types of companies also allow for convenient risk management by separating assets into separate legal entities. When establishing holdings and corporate groups, a managing parent company is responsible for controlling the shareholdings of subsidiaries. At the same time, such legal entities retain operational independence.
Criteria for Choosing a Business Jurisdiction
Whether you’re starting a business or expanding an existing one, Europe is a strategically advantageous destination. With its economic and cultural diversity and stable markets, the EU can meet the needs of businesses across a wide range of industries. However, with over 40 countries in Europe, each offering different opportunities and requirements, choosing the best location to incorporate a company becomes significantly more challenging. Understanding the best location to open a business in Europe, is much easier with the support of the professionals at Lawrange. Our recommendations when choosing an EU country for starting a business are primarily based on a comprehensive approach, taking into account corporate, tax, and immigration laws, as well as the goals and objectives the entrepreneur wants to achieve.
Tax Regimes and Tax Burden
Tax rates play a significant role in determining the economic viability of starting a business. Some countries are known for their low corporate tax rates, making them attractive to individuals seeking tax optimization. Others offer tax incentives that increase their appeal to foreign companies looking to invest in business expansion, which can provide significant financial benefits. It’s crucial to learn more about tax rates and incentives before deciding which country best suits your needs. This will impact your business for years to come.
Cost of Company Registration, Administration, and Maintenance
When registering a company in the EU, understanding the financial aspects is crucial for successful business expansion. Proper financial planning can be the primary factor in the success or failure of a business in Europe. For example, registration fees and office rent vary significantly across European jurisdictions.
International Prestige and Reputation of a Jurisdiction
A country’s reputation is determined by how it is perceived by the outside world. A country’s international standing is based on its relationships with other countries. For example, trust between countries fosters more efficient trade relations, leading to the elimination of physical borders and import duties. The best example of international prestige is the EU’s single market, where citizens of member states are allowed to live, work, and establish businesses freely within their own territory. Establishing a company within a European jurisdiction automatically enhances its prestige.
Access to Banking and Financial Services
Opening a business bank account is an important step in registering a company in the EU. Each member state has its own banking regulations, and the process can vary in complexity. In some countries, such as Lithuania or Latvia, procedures for non-residents are relatively straightforward, while in others, in-person registration or additional documentation may be required. When choosing a bank, consider the services provided—they should be tailored to your specific business needs.
Company Registration Process
Each country has its own registration procedures, but generally, this process involves submitting necessary documents, such as the company’s articles of association, details of directors and shareholders, and a statement of authorized capital. Depending on the legal form, special licenses and permits may also be required. Thorough preparation is essential to avoid delays and errors during registration.
Document Preparation
Prepare and notarize key legal documents, such as articles of association or articles of incorporation, to define the structure, objectives, and management of the future enterprise. Many European countries require a detailed business plan demonstrating the expected economic impact and sustainability of the enterprise. Immigration and labor authorities will review this before issuing a permit. It is important to ensure that all required documents are notarized.
Company Registration in the Trade Register
Many countries offer online government portals for filing applications, which include completing forms and uploading documents. Be prepared to pay the required government registration fees and deposit the share capital into a corporate bank account, as may be required by the laws of the specific EU country.
Follow-Up Steps
If your company registration application is approved, you must:
- Register with tax authorities and social security services.
- Obtain a tax identification number – this is crucial for tax reporting and compliance.
Opening a Corporate Bank Account
Opening a business bank account is essential for financial transactions and financial management. Look for reputable banks that offer services tailored to foreign investors and meet your specific banking needs. Banks typically require the applicant’s passport information and corporate documents. Special requirements, such as a minimum deposit amount, maintaining a standing balance, and others, may also apply.
The Main Challenges of Opening and Managing a Company in the EU
Despite numerous advantages, entering the European market is not without its challenges. Each country has its own corporate laws, tax systems, and residency requirements. Navigating these can be challenging, especially for foreign entrepreneurs unfamiliar with local legislation.
International business consulting is designed to overcome various challenges, including:
- Strict compliance with legal requirements – business registration and subsequent management directly depend on the timely filing of tax returns and compliance with labor laws. These and other factors significantly complicate business operations.
- Cost level – the costs of establishing and maintaining a company in Europe can vary significantly, from minimum authorized capital requirements to ongoing government fees, rent, staff salaries, and more.
- Opening bank accounts is a rather challenging task for non-resident entrepreneurs, as European banks have significantly tightened their requirements for applicants with foreign citizenship since 2025.
- Business culture – even the slightest differences in contract drafting, coupled with a lack of understanding of the local official language, can lead to serious errors.
Why choose Lawrange specifically?
Our law firm team understands the unique challenges faced by entrepreneurs interested in setting up a business abroad. Limited resources, unique industry regulations, and varying legislation – these and other challenges can be much more easily overcome with legal support for businesses in the European Union. We are ready to offer customized solutions tailored to the scale and needs of your business. Whether you’re a startup or an existing enterprise, you’ll definitely benefit from our law firm, which has assisted numerous entrepreneurs with company registration abroad, licensing, business operations, and the proper execution of third-party financing and shareholder agreements.
By contacting Lawrange, you receive:
- Tailored consultations on strategic business decisions, transactions, intellectual property protection, labor issues, and other business challenges. We deeply understand the specifics of each business, enabling us, among other things, to draft effective, well-designed contracts that protect your interests.
- The experience of Lawrange’s lawyers and attorneys in solving industry-specific problems helps any business comply with current and regulatory standards in European jurisdictions. Legal support for businesses in the EU ensures compliance and protects against potential legal risks.
- We also provide support in dealing with regulators and represent your interests – we will ensure a timely response to government inquiries, prepare the necessary responses, and more.
Expanding your business or launching a new venture in Europe has the potential to be considered one of the most successful decisions. With access to a vast consumer base, a stable economic environment, and numerous government incentives, the EU offers boundless opportunities for foreign entrepreneurs. However, success in this market depends on careful planning, informed decision-making, and compliance with legal and financial regulations, all of which are impossible without qualified legal support. Contact our Attorneys Association today if you want to begin exploring the promising European market as quickly as possible. We provide all the necessary services to ensure that starting and operating your business in EU jurisdictions allows you to achieve all your goals.
FAQ
If a company's head office is not located in an EU member state, can it participate in the formation of a European company?
- This depends on the legislation of each individual EU country, provided that:
- The legal entity’s registration fully complies with legal norms and requirements.
- There is a registered office.
- There is evidence of a genuine and ongoing connection with the economy of the European country where the company is being established.
Where is the easiest and cheapest place to register a company in Europe?
The easiest way to open a company is in Estonia – this jurisdiction offers simple and quick business registration thanks to its efficient online e-residency system. Business registration is cheaper in Bulgaria, where registration fees are minimal, and the tax rate is low.
Can foreigners open a business in Europe?
Most European countries are interested in attracting foreign entrepreneurs. A valid residence permit, proof of investment, and a robust business plan are typically required.
