Setting up a company in a European country is an opportunity that attracts many entrepreneurs from other parts of the world. Having a European company is prestigious but more important is the fact that a European company opens wide perspectives for doing business all around the world. Below we discuss the advantages of registering a company in Europe, suggest a few countries that you may want to consider, and discuss some serious factors that you should keep in mind when choosing the European country for your future company.
Advantages of registering a company in Europe
If you do business from Europe, you can enjoy several weighty advantages. The main advantages include the following ones:
- Tax incentives. Contrary to a popular belief, not all European countries charge high taxes. Many of them offer considerable tax incentives especially to newbie businesspeople.
- Double taxation avoidance agreements. Most European countries have signed multiple bilateral agreements on avoiding double taxation. This means that in all likelihood, you are not going to be taxed twice if you set up a company in Europe.
- Developed economies. Foreign entrepreneurs establishing companies in Europe gain access to well-developed infrastructures and ample financial resources.
- A European bank account. A company registered in Europe makes you entitled to open a bank account in the region. European banks guarantee security of your capital, offer high-quality financial services, and protect confidentiality of your personal information.
- Stable political systems. Doing business is comfortable when you know that the Government is not going to change the rules whatever political party wins the national elections: everything is going to remain stable.
- Opportunities to establish legal residence in Europe. The authorities of many European countries will grant residence and work permits to foreign nationals registering companies on their territories.
- Opportunities for international expansion. The European market is one of the largest markets in the world. Besides, European companies actively trade with partners from Asia, Africa, and America. Even faraway Australia and New Zealand conduct import/ export operations with Europe.
- Prestige. Europe is associated with high-quality products, innovations, and social responsibility. This will let you improve the image of your business venture greatly.
Where should you open a company in Europe?
Below we are going to make some non-obvious suggestions. We will mention four countries that you may have kept out of sight. If you want more information about any of the countries listed below (or information about business opportunities in virtually any country in the world), please do not hesitate to consult OP Group experts.
Portugal
Portugal is a member of the European Union, which means that you will gain access to a huge market with a solvent population if you set up a company in Portugal. Besides, the geographical position at the edge of the continent gives Portuguese companies easy access to Africa and Latin America.
A foreign company owner can qualify for legal residence in Portugal and in the entire EU. The country offers a wide range of investment opportunities especially in such spheres as IT, construction, agriculture, energy production and management, and tourism.
Registering a company is relatively simple in Portugal and it does not cost very much: you will need a few hundred euros only to set up a company in Portugal.
Latvia
Latvia gives wide opportunities for investments and business development. In addition, living in Latvia is comfortable and the nature of the country is beautiful.
When registering a company in Latvia, a foreigner immediately qualifies for a residence permit. If you choose to live in Latvia for 5 or 6 years, you can apply for citizenship of the country by naturalization. The taxation system is fair in Latvia. For instance, the VAT rate is 15%. You have to have 3,000 euros as the authorized capital to establish a company in Latvia.
Lithuania
One of the main advantages that Lithuania boasts is the opportunity to establish a company remotely. This can save a lot of time and money for you that you can invest in your business venture.
The VAT is relatively low in Lithuania at 18%. This can help you increase the competitiveness of your goods or services.
Denmark
The living standards are extremely high in Denmark even though prices are high too. In any case, living in Denmark is many people’s dream.
Opening a company in the country is one of the fastest ways to legal residence in Denmark. At the same time, you should be aware that the Danish authorities give priority to business ventures opened jointly by a foreigner and a Danish citizen. You have to visit Denmark if you want to register a company there.
Speaking of taxes, they are high in Denmark but there are tax incentives for newly established companies.
Factors to bear in mind when opening a company in Europe
You have to take into consideration several important factors if you would like to have a company registered in Europe. The main factors include the following ones:
- Every European country has its own taxation system and the tax rates are different in different European countries. You have to study the tax code of the country that you are considering before setting up a company there. In this way, you will be able to avoid unpleasant surprises.
- You have to appraise the level of political and economic stability of the country that you are considering for opening a company. Europe is generally stable but crises do happen in some countries.
- Each European country has its own corporate legislation that governs business activities. You have to acquaint yourself with that too.
- Every country is advantageous for some spheres of business and every country has limitations for some other spheres of business. You have to choose the European country that suits your personal purposes best of all.
- Cultural differences may also have an impact on your business activities. You have to learn about the mentality of the country’s residents to be able to communicate and interact with them successfully.
- Every European country has its own business etiquette rules. You have to learn them to avoid awkward situations and create a positive image for yourself and your company.
- Finally, the procedures of registering a company are a bit different in different European countries. In particular, the lists of application documents required for registering a company look dissimilar in different countries.
As you can see, meticulous preparation is required if you would like to register a company in Europe. In addition to the factors mentioned above, you should realize that banks also follow different sets of rules in different European countries. If you want to end up with a company registered in a European country that suits your interests, it would be a good idea to use professional advice.