Where better to open a business in Europe
Until recently, opening a company in Europe was a privilege for the few. But today it is an opportunity available to a wide range of Ukrainian entrepreneurs. A careful and responsible approach to the choice of a European jurisdiction can successfully solve almost any problem: a) to enter the market with a start-up; b) to relocate the business; c) to scale the company to a transnational level.
Experts of Attorneys Association Lawrange are always ready to offer up-to-date advice to Ukrainian businessmen on how to do business in the European Union. The key to our effectiveness is constant practice and responsiveness to any legislative changes that affect the regulation of international business.
What European countries are suitable for Ukrainians to open a business?
Asking the question of where best to open a business in Europe, it is necessary to clarify at once what is the scale of the business and what goals the entrepreneur sets for himself. Let’s look at some examples:
- If the entrepreneur is interested in business immigration, there is an opportunity in the near future to obtain EU citizenship, it is worth looking at the countries offering programs to obtain residence permits for investment in the economy – Malta, Portugal, Spain, and so on.
- If the goal is to start up in Europe with a small capital, it is best suited to the closest neighbors of Ukraine – Poland, Bulgaria, Romania, Czech Republic, Slovakia.
- If you plan to start an IT-company, fintech startup or other high-tech company, then look for the countries which investors trust, and where the IT-infrastructure is well developed (technology parks, gas pedals, incubators, co-working spaces), and these are Britain, Ireland, Estonia and so on.
- If you need a simple, clear and acceptable to the entrepreneur system of taxation, you can pay attention to Hungary and Bulgaria, where the profit tax is 9 and 10% respectively.
Important! When choosing a jurisdiction in Europe a Ukrainian entrepreneur will have to take into account quite a large set of factors. In the first place among them are taxation issues. In this case, if a businessman plans to remain a tax resident of Ukraine after opening a business in the EU, such a condition as the new rules concerning reporting on controlled foreign companies (CFCs) should be taken into account.
Is it advantageous to open a business in Europe?
If you set your mind to it, you can draw up a long list of benefits of opening a business in the European Union. Not in the last place will be – the possibility of using a single currency, harmonized for all countries in the Eurozone rules of doing business, and almost free movement of goods and services between states.
Note! Extraction of concrete benefits from the project depends on a number of factors, ranging from the relevance of the business idea and ending with the correct structuring of the business. In this case, there is no need to raise the question of where in Europe it is easier to open a business. It is much more important to properly match the specifics of the business with the peculiarities of a particular European country. If the “puzzle comes together”, the businessman will get the most favorable preconditions for the successful development of the project and obtaining tangible benefits.
Popular types of businesses
There are many examples of successful business of Ukrainians in Europe. However, when deciding how to open a business in Europe, it is worth taking a closer look at the following directions:
- Information Technology, including software development, cybersecurity and IT outsourcing.
- FinTech, including payment services, issuance and circulation of electronic money.
- Legal and accounting consulting, in particular for the Russian-speaking target audience.
- Import and export operations, freight forwarding and logistics services.
- Marketing, advertising, design.
- E-commerce, including trade on international marketplaces, implementation of dropshipping schemes, maintenance of own Internet-shop.
- Rental of real estate (buying a home in itself is a promising investment).
- The service industry, including auto repair, household appliances and electronics, and cleaning firms.
- Recruitment and employment, in particular for fellow countrymen.
- Production related to recycling and “green energy” (a number of countries offer tax benefits and state support programs for such businesses).
- Hotel and restaurant business – implementation of original Ukrainian trait of hospitality mentality.
- Tourism, including guide services and organization of excursions in Ukrainian and Russian.
Note! This is not an exhaustive list of promising areas for entrepreneurship. We deliberately do not single out cryptocurrency activity and other high-risk businesses. More and more European countries are taking the path of legal regulation of such entrepreneurship in order to avoid money laundering obtained illegally. At the same time, licensing or obtaining other types of permission from the state regulatory authorities requires a considerable investment of finances and efforts.
If you are interested in registering a cryptocurrency business in Europe, we invite you to an individual consultation.
The advantages of opening a business in Europe
When registering a business in the European Union, you can aim for versatile and very attractive prospects. Let us highlight some of them:
- Business Immigration.
The residence permit (resident status) and then the EU citizenship can be obtained by a simplified procedure. A number of European states have programs to attract innovative business projects.
In general, the procedure for obtaining citizenship through business immigration includes the following steps:
- opening a business visa and entering the chosen country;
- registering a company there;
- obtaining first a temporary residence permit and then a permanent residence permit;
- obtaining citizenship through naturalization.
***Note: Duration of naturalization is from 5-8 years and more. Obtaining a passport of citizenship in some EU countries involves taking integration exams.
- State support for small and medium-sized businesses.
In the European Union, business development is supported by the state. If an entrepreneur is engaged in the type of activity that is on the list of priorities, it is possible to count on grants and tax incentives. For example, support is provided to projects in the field of healthcare, alternative energy, education and so on.
In general, the state motivates foreign businessmen to create jobs and develop competitive projects, stimulating growth of the country’s economy and improvement of living standards. In many countries, free economic zones with special tax regimes and opportunities to obtain licenses for innovative types of business, in particular for cryptocurrency activities, are the center of attraction for investments.
- Obtaining affordable loans and other types of financing.
Along with access to investors, registration of a firm in the EU provides access to credit from reliable European banks, including banking institutions in Switzerland, Britain, Germany, and so on. If you meet the stringent requirements for confirming the commercial prospects of the project, you can get financing on very favorable terms – at a relatively low interest rate.
What is the most profitable way to make payments?
When considering where to open a business in Europe, immediately assess the prospects for carrying out settlements with counterparties. In this case, any partner of the company in the European Economic Area (EEA) will be able to carry out outgoing and incoming transactions through the SEPA system. This is literally instant transfers without commission or with a minimum fee. The only caveat is that the sender’s bank and the recipient’s bank must be connected to the SEPA system.
Important! Even at the stage of company registration, you should think in advance about which bank to open a corporate account with. Connection to SEPA is among the main selection criteria.
At the same time, each country has its own list of popular payment methods. For example, in Germany – Sofort and Giropay, in Portugal – Multibanco, in the Netherlands – iDeal, in Belgium – Bancontact, in Poland – Przelewy24 and BLIK.
How to open a bank account for business?
European banks’ account opening procedures have been affected by anti-money laundering trends. Consistently, banking institutions have adopted BEPS rules, Substance requirement (availability of an office and employees), Basel Committee recommendations (in particular, Basel III), establishing the procedure for customer identification, as well as transactions on accounts.
Now, deciding where the easiest place to open a business in Europe is, you must immediately understand that the task is not only to register the firm, but also to open a bank account for it. Each bank has developed and uses instructions for identification of clients (Know Your Client), as well as for detection of suspicious transactions. If bank employees become suspicious, they are obliged to inform the supervisory authorities.
Note! In order to successfully pass the bank’s compliance procedures, you will need correctly prepared documents and the right tone of communication with bankers. In particular, you will have to answer questions about the type of activity, counterparties, turnover, irreducible balance on the account, and so on. Banks can check not only the company itself, but also the founders – CVs, letters of reference, diplomas, client references, motivation for setting up a business, the presence or absence of offenses.
To get a quick start to your business without delaying on solving the issue of the bank account, you can use an alternative option – to open an account in an international payment system or a neobank. There will be fewer requirements for the entrepreneur in this case.
What documents does a Ukrainian need to open a business in Europe?
Figuring out how to open a business in Europe, it is necessary to determine the list of documents that the future owner of the company must submit. Each European jurisdiction has its own nuances of registration of entrepreneurship. But the general algorithm includes such stages as a) registration of a legal entity, b) registration as a taxpayer, c) opening of a bank account (in particular, the share capital shall be deposited to this account).
To pass all these stages of registration of entrepreneurial activity in Europe you will need:
- copies of the foreign passport and internal passport of the founder;
- business visa;
- office rental agreement;
- letters of recommendation (optional);
- business plan.
Important! The conditions and requirements for business are set separately for each jurisdiction by the state authorities. Banks also have their own requirements. Therefore, before the registration of the Ukrainian business in Europe, preparation of documents and planning the necessary steps to achieve a successful result.
Europe today is no longer terra incognita for Ukrainian business. Many entrepreneurs successfully enter local markets, promote their products and services, get access to quality banking services, government support, investors, and of course – to a high standard of living. Doing business in Europe is a good solution for a number of things, including scaling a business or relocating. A businessman can plan to immigrate to the EU, or stay in Ukraine, developing a project in Europe. Either option opens up its own prospects for benefits.
The service of legal registration of European business from the representatives of Attorneys Association Lawrange gives the opportunity to pass all necessary procedures in the chosen jurisdiction in the shortest possible time and without unfortunate mistakes. We carefully fill in and double-check every document, and we know how to conduct a dialogue with officials and bankers in Europe. Therefore, our clients receive a ready-to-operate company, and if necessary, assistance in its further accounting and legal support.