What EU country is best for a digital business? (taking all things into account such as tax, admin pressure, etc)

Business
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I’m looking for some advise:
My business is UK based. This was a conscious choice at the time I think that it may be time to move it to another EU country. Brexit is just one of the reasons for this but it is an important one as we have already lost contracts because of the uncertainty around that (the 1st day after the vote already actually).

Anyway, I’ve been researching a lot as to what country in Europe may be the best as an Entrepreneurial climate but also legislation, tax, VAT, owner remuneration, easy of setting up without living there, etc. As I plan to expand our team as well, but possibly not on a payroll, this May be relevant too. (BTW, I don’t think I, as director, intend to move there …)

Anybody have any real advice and/or experience they can share?

Options I have looked at are Estonia (but apparently the cost/tax is much higher than they say), Hungary (good tax regime but expensive to set up and run), Malta, Spain and some more but any good advice is much appreciated.

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Hello Hein,

I just moved to Malta and think it’s a good choice. They speak english, taxes are reasonable, it’s easy to set up a business, weather is nice and people are helpful … had not had a negative experience yet.

Best regards

PS: Internet is great, ordered it Friday, it was setup on Tuesday and the starting speed is 250 Mbs

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This depends a lot on your personal situation (tax residency, travel habits, etc) as well as the type of business you’re running. Where you’re based, how are you taxed on foreign salary, dividends, etc? Are you paying yourself as an employee of the business, or taking dividends or paying yourself for board member duties?

While Estonia isn’t a tax haven (20% CIT, for example), it’s a very flexible and cheap jurisdiction. Of course, if you have a large turnover and profits, it might make more sense to pay more for corporate upkeep and less in taxes.

Not sure where you have that idea from. Care to elaborate? I’m not saying it’s the right setup for you, but I don’t think that statement is true.

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I would strongly recommend that you look at Berlin. It has positioned itself as a tech growth capital and has low operation costs. It is ranked by JLL as 16th on their Future Proofing Global Top 30 list. 1 new Start-up Business is founded every 20 hours, it has created over 25,000 jobs in the tech industry since 2008 and it’s Digital Economy has grown from 4.8% to around 20% over the same period. Google have their campus in Kreuzberg, Berlin. Add to this that Germany has the 4th Strongest Economy in the world, Berlin’s economic structure is diverse, it’s connectivity to Europe and the world is very impressive and getting better (the list goes on) I would say that it ticks a lot of boxes.

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Taxes and regulations are ridiculous in Germany. Berlin is - IMHO - a complete mess, it’s probably cool for an expat for a few month.

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Hello Hein,

I’m the owner of a few companies in Bulgaria (I moved my digital businesses here a few years ago) and I’m partner of an accouting firm in Sofia, I’ll explain you why I decided to move here and why it’s a good place were to do business:

Bulgaria is one of the best country in Europe to do business, why?

• Well, first is because it’s in Europe, that means that is close, is politically and economically stable, there are no “hard” boarders between nations so the commerce is really simplified.

• Low set-up and management costs: It’s a cheap country and the costs related to other countries are the half (setting up a company is less then 1000€, not comparable at other nations like Spain).
The set up is easy, but it need to be done on the spot, but then everything be managed from abroad.

• Low costs in general: Flying and living here is much cheaper then other places like Malta where it’s expensive because it’s a turistic destination (from Milano -2 ways- you can fly to Bulgaria for 50€).

• Tax reasons: Flat Tax10% on profits, 5% on dividends. Also the burocracy is not intrusive.

• Employee tax: the overall tax on employees are 50% of the NET, where in places like Italy are more then the double (that is true also for the Administrator payroll).

• VAT: another reason why a lot of clients likes it here, is because if you have VAT credit, the state directly transfer it in the company bank account, not like in other places like Italy where you it will be just discounted.

• Digital ecosystem: Sofia is becoming the Silicon Valley of East Europe (everyone here is a programmer!), and the internet ecosystem is well developed (on of the top 20 countries for internet expansion).

Those are the main reasons why people are coming here to do business, and also me, as an entrepreneur, I’m liking here a lot.

I hope this will help you, have a nice day! :slight_smile:

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