Expanding a business into Europe can be a game-changing move, offering access to a massive consumer base, advanced infrastructure, and supportive business ecosystems. However, choosing the right country is crucial. Factors such as taxation policies, business opportunities, and immigration regulations play a key role in making an informed decision.
In this article, we’ll analyze seven of the most attractive European countries for business expansion to help you determine the best destination for your company.
1. Poland
Taxation
Poland offers a relatively business-friendly tax system compared to other EU countries:
- Corporate Income Tax (CIT): 19% (standard rate), but 9% for small businesses (up to €2 million revenue).
- VAT: Standard rate is 23%, with reduced rates (8%, 5%, and 0%) for specific goods and services.
- Dividend Tax: 19%, but reduced for companies in the EU due to double taxation treaties.
Business Opportunities
Poland is a rapidly growing economy with a strong manufacturing, IT, and logistics sector. Foreign investors benefit from incentives like special economic zones (SEZs), R&D tax credits, and EU funding support.
Immigration & Work Permits
- Temporary residence permits for business owners and employees are available.
- Entrepreneurs can apply for a Polish business visa, making it easier to establish a company.
- EU citizens can work without restrictions, while non-EU citizens need a work permit.
Verdict
Poland is ideal for cost-effective expansion, especially for companies in manufacturing, tech, and logistics.
Read More: Company Formation in Poland
2. Spain
Taxation
- Corporate Tax: 25% standard rate (lower for small businesses).
- VAT: 21% (reduced rates: 10% and 4%).
- Dividends: 19%-23%, but lower for EU-based entities.
Business Opportunities
Spain is a hub for tourism, real estate, fintech, and renewable energy. Cities like Madrid and Barcelona are home to thriving startup ecosystems, and the country is a bridge to Latin American markets.
Immigration & Work Permits
- Spain’s Entrepreneur Visa allows non-EU entrepreneurs to set up businesses with minimal bureaucracy.
- The Golden Visa Program offers residency to investors who invest at least €500,000 in real estate.
- EU citizens can work freely, while non-EU citizens need a work permit.
Verdict
Spain is perfect for businesses targeting Southern Europe, Latin America, and tourism-related industries.
Read More: Company Formation in Spain
3. The Netherlands
Taxation
- Corporate Tax: 19% (on profits up to €200,000), 25.8% for higher profits.
- VAT: 21% (reduced rates: 9% and 0%).
- Dividend Tax: 15%, with exemptions for EU-based companies.
Business Opportunities
The Netherlands is one of the most business-friendly countries in Europe, offering a highly skilled workforce, excellent logistics, and a strong digital infrastructure. It’s a major hub for tech, finance, and e-commerce.
Immigration & Work Permits
- The Dutch Startup Visa allows non-EU entrepreneurs to launch businesses.
- The Highly Skilled Migrant Program simplifies hiring non-EU professionals.
- EU citizens can work freely.
Verdict
The Netherlands is ideal for tech startups, finance companies, and e-commerce businesses looking for a stable regulatory environment.
Read More: Netherlands Company Formation
4. Germany
Taxation
- Corporate Tax: 15%, plus trade tax (7%-17%), resulting in an effective rate of ~30%.
- VAT: 19% (reduced rates: 7%).
- Dividend Tax: 25%, but reduced for EU companies.
Business Opportunities
Germany is Europe’s largest economy, making it an attractive destination for automotive, manufacturing, biotech, and AI-driven businesses. It has a highly skilled workforce and strong R&D support.
Immigration & Work Permits
- EU Blue Card allows skilled workers to relocate easily.
- Freelancer and entrepreneur visas are available for non-EU business owners.
- Hiring foreign talent is streamlined with Germany’s pro-immigration policies.
Verdict
Germany is best for businesses in advanced manufacturing, AI, and technology, but high taxes can be a drawback.
Read More: Company Registration in Germany
5. France
Taxation
- Corporate Tax: 25%.
- VAT: 20% (reduced rates: 10%, 5.5%, and 2.1%).
- Dividend Tax: 30%, but lower for EU investors.
Business Opportunities
France is a leader in luxury goods, tech startups, and green energy. Paris is an innovation hub, and the country offers strong government incentives for R&D.
Immigration & Work Permits
- French Tech Visa simplifies the process for tech entrepreneurs.
- The Talent Passport program offers long-term residency for skilled professionals.
- EU citizens can work freely.
Verdict
France is ideal for tech startups, luxury brands, and green energy businesses, but taxation is relatively high.
Read More: France Business Setup
6. Italy
Taxation
- Corporate Tax: 24%.
- VAT: 22% (reduced rates: 10%, 5%, and 4%).
- Dividend Tax: 26%.
Business Opportunities
Italy has a strong manufacturing, fashion, and food industry. Milan is a growing startup hub, and government incentives support businesses in innovation and sustainability.
Immigration & Work Permits
- Italian Startup Visa is available for entrepreneurs.
- The Golden Visa Program allows residency for significant investors.
- EU citizens can work freely.
Verdict
Italy is great for manufacturing, fashion, and food-related businesses but has complex bureaucracy.
Read More: Company Formation in Italy
7. Portugal
Taxation
- Corporate Tax: 21%.
- VAT: 23% (reduced rates: 13% and 6%).
- Dividend Tax: 28%.
Business Opportunities
Portugal is becoming a startup and digital nomad hub, with strong growth in tech, tourism, and renewable energy. The government offers tax breaks and investment incentives.
Immigration & Work Permits
- The Portugal Golden Visa offers residency for investors.
- The D7 Visa allows digital entrepreneurs to move easily.
- EU citizens can work freely.
Verdict
Portugal is ideal for tech startups, remote work-friendly businesses, and tourism-related industries.
Conclusion
Expanding into Europe is a strategic move that can open doors to new markets, skilled talent, and strong economic opportunities. Whether you prioritize low taxes (Poland, Portugal), a tech-friendly ecosystem (Netherlands, France), or a powerhouse economy (Germany, Spain, Italy), there’s a perfect European destination for your business.
However, choosing the right country is only the first step—navigating legal requirements, taxation policies, and immigration processes can be complex. That’s where expert guidance makes all the difference.
At OnDemand International, we specialize in seamless global business expansion—from company registration and tax advisory to visa processing and compliance. Our team of international business experts ensures a smooth and efficient setup in your chosen European destination.
Ready to take your business global? Let’s make your European expansion a success! Schedule a free consultation with our experts today!
