Today we’re gonna talk about the best countries for online business in Europe. This article is for you if you are in two situations: The first situation is you already have an online business and you want to move your online business to a country with better opportunities and the second situation is you have an idea for an online business and you want to find the best place, the best country the country which will provide a higher chance of success for your online business.
Firstly we’re gonna talk a little bit about things I considered when creating this list of the best countries to move your online business or to start a new online business. So here are the factors. These things are:
- Low taxes
- Bureaucracy and complaints
- Access the market
- High overhead
- Good logistic system
The first factor you should consider is whether the country has low taxes for your activity. Obviously, you’re not going to move your business from a low tax country to a higher tax country, you may move to a country with a similar tax level if the country you’re going to has a better quality of life or if it is easier to make business from the new country but it is very unlikely that you’ll move your business from a country with lower taxes to go to a country with higher taxes, that would make absolutely no sense.
Secondly a country with a low level of bureaucracy and complaints, that also can be a problem for your business if you have to spend too much time getting licenses or paying taxes, or paying fees to the government, so it is very important that the country is efficient and pro-business to make your chances of becoming profitable more viable.
Next factor is whether the country has easy access to large markets so, for example, if the country is in the European Union, you will have no problem when accessing a large market, a large audience. But if the country is, for example, some country like Albania which is becoming better for business but it’s still very difficult to getting paid in Albania from a company abroad, they do not have the best payment processors, this might be a problem. So, it is important also that you are sure you can access and charge your clients from the country you are in, that also includes whether the country has payment processors like paypal, or stripe for example.
Next aspect is low overhead. If you are going to operate from a country with a very high overhead, if you need to hire staff, for example, hiring staff let’s say in a country like Sweden is very expensive, so if you need staff, you’re probably going to look for a country in which you can actually get more for less investment, that also applies if you need to rent office space or a storage space.
The next factor you should consider is whether the country has a good logistics system. That doesn’t apply to everyone, but if you are selling tangible items and you’re not doing some fulfillment service like amazon, if you’re actually shipping items yourself you also have to bear in mind that the country should have a good logistics system.
Now getting on the main subject of this video, we have gonna list the best countries for a Online Business in Europe according the considerations up there.
Cyprus
Cyprus is famous on online forums among European citizens and business people willing to get an ultra-low tax solution both as individuals as well as for their business operations. It is very easy to understand why as a matter of fact as Cyprus has some of the lowest tax rates in the continent, but at the same time it is also a full European Union member and uses the euro as its currency. So, you can definitely find options with a lower tax rate but they might not be in European Union or they might use a different currency which can result in some problems, not very significant problems but maybe some problems. That’s not the case of Cyprus since they use the euro and they are in the European Union.
Currently the corporate income tax rate in Cyprus is 12.5%, a rate comparable to Ireland, another attractive country for similar purposes. However, once again Cyprus has an advantage that overhead costs are also lower, you can hire qualified staff for a fraction of what it would cost in Ireland or in most other western European countries. Cyprus also has a number of residences by investment programs and in the case of individuals you can even live tax free in Cyprus if your income comes from capital gains on investments.
Estonia
Estonia has definitely done its homework when it comes to marketing itself as a great tech hub in the European Union. While taxes are definitely not the lowest in Estonia, the country still offers a number of advantages if you want to start or move your online business to the Baltic region to Estonia. One of the most critical advantages of Estonia is that you won’t lose much time with bureaucracy or compliance. Estonia’s business regulations are extremely simple and effective, it is easy to understand what the government wants from you in terms of licenses or taxes. This way you can focus on the business and make it grow, you won’t have to go around in government offices like you have to do in many other countries in Europe.
Currently Estonia’s corporate income tax is 20%, but you can defer taxes, so for example, if you reinvest the profits of your company and don’t distribute it as dividends to the shareholders, in some cases if you meet some requirements, you can defer the taxes and actually not pay them in that year, and in some other cases the corporate income tax can be even lower than 20% even when you actually have to pay the corporate income tax. Estonia also has a favorable crypto regulation which is also a plus to the country, so for example, if you want to establish business like amazon, or a crypto exchange or also some kind of crowd investment platform, Estonia is a very good option.
Lithuania
Lithuania similarly to Estonia is a highly efficient country in terms of government bureaucracy and compliance. A lot of tech startups choose Lithuania for that reason and once again just like Estonia, it is also more flexible in terms of regulations for financial related companies, this includes payment processors or digital money remittance companies. There are many of them actually established in Lithuania.
Small companies that earn less than 300 000 euros in gross annual revenues can actually pay a lower corporate income tax which can be zero in the first year and then if you still meet the requirements, it can be 5% for the coming year, so if you’re a small businessman, a freelancer for example, you can pay an income tax of 5% at a corporate level, but then if you withdraw the dividends you have to pay more definitely.
Romania
Romania is a great country to start or move your online business to. First of all, Romania has a very low cost of living and has one of the fastest internet speeds in the world. Moreover, its cost of living is among the lowest European Union, this is very important if you want to stay in Europe and have access to a very low cost of living as I said, Romania not only has a low cost of living but it is in fact one of the lowest in the European Union. If you need to hire staff, salaries in Romania are also much lower than in western Europe. So, your company overhead will definitely be much lower in Romania than in most countries in central or western Europe. On top of that, Romania has an extremely favorable tax system for online business, in some cases if your turnover is high but your operation costs are low you can opt for a tax system with a corporate rate of just 1% or 3% for small companies that especially favorable if you’re a digital nomad, for example, or sell software as a service.
United Kingdom
Despite not being in their opinion, UK still is one of the best countries in the world to have an online business. Even after Brexit the country’s advantages for online businessmen are still far greater than its disadvantages. UK has a tradition of being a pro-business country and it really shows. As a matter of fact, leaving the EU allowed the UK to have more freedom and be an even more pro-business country, than when it was before in the European Union it had to follow a number of regulations actually decided and imposed by Brussels. Now the UK basically can do whatever they feel like it’s correct for their own population, especially if you’re a freelancer like a software developer dealing with global clients having your online business based out of the UK can be very helpful in a relatively stress-free operation.
Running an online business in the UK is one of the cheapest options in terms of maintenance costs, that includes everything from having a virtual address for your company as well as to the money you have to spend with an accountant.
Bulgaria
Bulgaria is another country that I would definitely recommend if you are doing online business. Bulgaria is simply the most affordable country in European Union when it comes to hire staff, low costs are also the case if you need to rent an apartment or an office space. Since Bulgaria is also a member of the European Union you can easily access the blocks market with a minimal cost from the country. Similarly to Romania, Bulgaria is an excellent place to run your online business if keeping your business costs low is a priority.
On top of that, Bulgaria is still home to some of the most inviting tax systems for corporations in the European Union. Currently the rate in Bulgaria is just of 10% for corporations the income tax rate. Finally, it is relatively easy to get a residence permit in Bulgaria, in my opinion is definitely a good option if you’re running a one-man show.
Czech Republic
Czech republic also referred currently as Czechia, but even if it’s the last in the list it doesn’t mean that the country is not a great option to move your business to or to start a business in. As a matter of fact if you consider the quality of life, taxes and the country’s location, it is one of the best options to start your online business. One of the best advantages of the Czech Republic is that non-eu freelancers can actually move to the Czech Republic relatively easily, especially if they come from a visa exempt country like the US, the UK, Japan, South Korea, Australia and some other countries which have Schengen visa-free access. There is a popular residence permit category for freelancers which is ideal if you run your online business as a consultant, a blogger, an affiliate marketer or an influencer. It is also a good option if you are an English as a second language teacher, and in some other cases as well the Czech Republic is also a good idea if you ship physical products, as you can profit from its geographical proximity with Germany, one of the most advanced countries in terms of logistics in the world.
