Complete guide to doing business in Europe in 2025, for growing startups and entrepreneurs

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Europe expansion overview Why expand business operations to Europe? Challenges of doing business in Europe How to set up a business in Europe? Which countries in Europe are best for businesses? Business etiquette and culture in Europe Tips for doing business in Europe Grow your business in Europe with Wise Business

Thinking of starting a business in Europe, or expanding your UK business across the continent?

Europe has plenty to offer UK entrepreneurs and growing startups, and is a crucial next step for many. However, expanding to a new foreign market will always have its challenges.

In this comprehensive guide, we’ll cover all the essentials you need to know about doing business in Europe.

This includes the benefits and challenges, tips on business etiquette and corporate culture, and a rundown of some of the most business-friendly countries in Europe.

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Europe expansion overview

Research is key to success when expanding to Europe, to understand local culture, business etiquette and regulatory requirements.

Consideration	Description
Opportunities	Access to the EU Single Market, a highly skilled workforce, easy business registration and opportunities in tech
Challenges	High salaries and competitive hiring landscape, complex regulatory requirements and differences in business culture (and possible language)
Most attractive countries for foreign entrepreneurs	Ireland, Portugal and Cyprus

Why expand business operations to Europe?

There are lots of reasons why UK businesses choose to expand their operations to Europe. For starters, there’s proximity, as the UK is part of Europe (if no longer the EU) and has established trade, business, transport and other connections with the continent.

Another of the main benefits is access to the EU Single Market, and to Europe’s highly skilled and educated workforce. It’s relatively easy to set up there, and many European countries are very supportive to startups - particularly in tech-related sectors.

We’ll look at each of these benefits and opportunities in more detail below.

Access to a large, unified marketplace and customer base

One of the biggest advantages of expanding to Europe has to be access to the EU Single Market. It’s the world’s largest single market, with a GDP of approximately €18.3 trillion and a population of around 450 million.¹

The EU has a unified currency, free trade between member countries as well as common standards and regulations for products and services. This makes everything from trade to compliance easier.

Europe is also ideal as a gateway to other continents, both due to its geographical location and its multiple time zones - most of which are in the middle of Asia-Pacific and North America.

The Netherlands in particular is known for its strategic location - it was rated the most globally connected country in 2020, according to the DHL Global Connectedness Index.²

A skilled, highly educated workforce

Europe is famous for the quality of its workforce, so it’s the perfect place to find the talent needed to drive your new business forward.

According to Eurostat, there are around 80 million highly skilled people employed across EU countries. The cities with the greatest proportion in 2022 were Stockholm in Sweden and Utrecht in the Netherlands, closely followed by Luxembourg.³

One of the reasons the continent has so many skilled professionals are the world-leading educational systems found in many European countries, where a huge 84% of people have at least an upper secondary education (according to 2024 statistics).⁴

Labour may not be the cheapest in some European countries - especially compared to other parts of the world such as Asia. But in some areas of Eastern Europe, labour costs are much more affordable while the levels of talent remain impressively high.

Easy business registration and a startup-supportive ecosystem

While it may depend on the country, Europe in general has a reputation as a startup-friendly region.

In many countries, it’s very quick and easy to register a business as a foreigner. For example, in Portugal it typically takes just a few days, while in Estonia it can be done in as little as 15 minutes. In most cases, you can do the whole process online.⁵

There are also countless schemes, grants, tools and resources available for startups, including the Enterprise Europe Network, InvestEU Portal, Access2Finance, Access2Markets and many more.

Some countries offer attractive tax incentives for foreign entrepreneurs, such as the new Tax Incentive for Scientific Research and Innovation (IFICI) in Portugal - a scheme which aims to benefit entrepreneurs and innovation-driven businesses.

Opportunities in tech and digital innovation

While Europe’s biggest industries may be manufacturing, services and tourism, some of the most exciting opportunities for startups can be found in the tech sector.

The continent has also acted as an incubator for countless tech success stories, from fintechs Klarna and N26 to the ride hailing app Bolt and Paris-based startup Mistral AI.

Across the EU, there are a large number of government-backed schemes and programmes designed to support tech startups and digital innovation.

Among the most notable are French initiatives such as La French Tech, which has supported over 25,000 startups since it launched in 2013, and France 2030 - an ambitious €54 billion plan to support high-tech startups in sectors such as healthcare, medicine and low-carbon mobility.⁶

💡 See international expansion checklist

Challenges of doing business in Europe

While Europe may present many exciting opportunities for UK entrepreneurs and growing startups, it also has its challenges.

It’s good to be aware of these from the outset, so you know what to expect and can prepare accordingly. Let’s take a look at a few of the most common challenges UK startups face when launching in Europe.

Demand for high salaries and competition for talent

The highly educated and skilled workforce available in Europe may be one of the most attractive reasons to expand there, but it’s a double-edged sword. With such a high level of talent, the hiring landscape can be both fiercely competitive and expensive for employers.

You may need to compete with native and international businesses for the best talent, and be prepared to offer high salaries and attractive benefits packages.

France, Germany and the Netherlands are among the most expensive, possibly due to robust labor laws, social security systems and stronger unions in these countries.⁷

Diverse and complex bureaucratic and compliance processes

The rules, regulations and processes affecting businesses vary considerably across European countries.

The continent is known for its strong legal and regulatory framework, which is undoubtedly an advantage for businesses looking to expand there. However, this can lead to hard-to-meet compliance regulations, paperwork and extra costs. This can be further complicated by the language barrier if you’re setting up in a country where English isn’t a main language.

You’ll need to work with specialists and local experts to keep up with a small mountain of regulatory requirements. This includes data privacy regulations, laws related to intellectual property rights, competition, antitrust regulations and of course, tax.

There are national as well as EU-wide laws to keep on the right side of, along with financial reporting requirements, VAT rules and accounting standards.

Differences in business culture and communication (and possibly language too)

As when entering any foreign market, there will undoubtedly be an element of ‘culture shock’ when expanding to Europe from the UK.

While the EU may unite countries and many share common values and languages, there are still differences in business culture, etiquette and social norms across countries - and you’ll need to get to grips with these to succeed. We’ll touch on that more later, and offer a few tips.

There’s also a potential language barrier to consider, as not everywhere in Europe speaks English as a main language. In fact, France, Italy and Spain have low proficiency in English compared to other parts of the EU, such as Sweden, the Netherlands and Denmark.⁸

💡 Learn more about navigating risks of international expansion

How to set up a business in Europe?

The process of setting up an entity in Europe will vary depending on which country you’re focusing on. But generally speaking, you’ll need to follow certain essential steps such as:

• Market research and planning, including developing a comprehensive business plan and conducting feasibility studies
• Choosing a suitable business structure, and registering your business with the relevant authorities
• Getting the required licences and permits
• Establishing a physical or virtual office in your chosen country
• Opening a local business bank account - you can also use an international account such as Wise Business.
• Register for taxes
• Recruit and hire employees, ensuring your follow local employment regulations
• Set up financial and accounting systems.

You may want to work with an international business consultant and/or a global company formation provider.

A specialist with knowledge of the country in question can help you navigate the process and understand the specific requirements for establishing a business there.

Which countries in Europe are best for businesses?

The country or region you choose to start your business in will largely depend on your market research, as you’ll want to go where there are the most opportunities and demand for your product or service. You may also have connections to a particular country, or already sell there.

But generally speaking, some countries in Europe are more attractive for UK-owned startups than others. Let’s take a look.

Ireland⁹

It’s easy to see why UK entrepreneurs choose to start or expand their businesses across the Irish Sea. Ireland has plenty to offer, including:

• Access to the EU Single Market
• Close proximity to the UK, meaning easier travel, trade, collaboration and partnerships
• Share language and business culture
• Low corporate tax rate of 12.5%, one of the most competitive in the world
• Highly skilled workforce, especially in tech, pharmaceuticals and software
• Thriving hub for startups (especially Dublin) with government grants, funding options and incubators all supporting innovative new ventures.

Portugal⁹

Sun-soaked Portugal may not seem like the obvious base for a new European business, but it actually has many advantages for UK entrepreneurs:

• Tax incentives, with lower rates for SMEs, tax credits for research and development (R&D) projects and companies only taxed on income generated within Portugal¹⁰
• Entrepreneur-friendly visas, such as the Portugal D2 Entrepreneur Visa and Golden Visa
• Growing hub for digital startups, especially in Lisbon
• High quality of life and relatively low cost of living.

Cyprus⁹

Another hot Mediterranean gem, Cyprus has more to offer than sun, sea and fantastic food. It’s also an attractive place to start a business as a foreigner, due to the following:

• Low corporate tax rate of 12.5% - which like Ireland’s rate, is one of the most competitive in the world
• Tax incentives for international investors, including no capital gains or dividend tax - making it an attractive country for holding companies.
• Entrepreneur and foreigner-friendly visas, including the Cyprus Permanent Residency Program or Golden Visa - this offers a chance to get EU residency through an investment in real estate.

However, keep in mind Cyprus have restrictive income rules, issues in corruption and is an overall smaller market.

Business etiquette and culture in Europe

One of the hardest things to adjust to as a UK entrepreneur expanding to a foreign market is the difference in culture - both inside and outside of the business world.

In many cases, you’ll find the business landscape In Europe similar to the UK. However, local etiquette and culture does vary between countries, even on a continent as relatively unified as Europe. This means you’ll need to do your research carefully, to make sure you understand all the nuances.

Here are some key points to remember:

• Direct communication is often preferred over small talk
• However, relationship building is still considered important before working together, especially in countries such as Italy and Spain
• Politeness, respect and punctuality are valued in most European countries.

Tips for doing business in Europe

• Do as much research as you possibly can - into local culture and etiquette, as well as business opportunities and target customers.
• Get expert advice from specialists in the country you’re targeting - this includes legal and tax advice, and support navigating local bureaucratic processes.
• You’re likely to need a local business bank account from the start - this is a key requirement in most parts of the continent.
• Familiarise yourself with company registration and legal structures in the country, so you can choose the most appropriate one for your new business.

You might also want to read our handy guides 💼

• How to start a business in Germany
• How to start a business in Spain
• How to start a business in Poland

Grow your business in Europe with Wise Business

While having a corporate bank account may be mandatory in many parts of the continent, you can also use Wise Business to help grow your business in Europe.

Open a Wise Business account and you can manage your company’s finances in 40+ currencies all in one place, including EUR, GBP and USD and all other major currencies. You’ll be able to pay suppliers and staff in their own currency, as well as receiving payments in multiple currencies.

Wise payments are fast and secure (even for large amounts). Best of all, you’ll only pay low, transparent fees and always get the mid-market exchange rate.

With Wise Business, you’ll also benefit from the following features:

• Issue business debit and expense cards for you and your team
• Cashback on eligible card spending
• Generate invoices and payment links to receive money easily from customers
• Access accounting integrations, batch payments and a powerful API
• Wise Interest - which lets you earn returns on money held in GBP, USD and EUR. Capital at risk. Growth not guaranteed. Wise Assets UK Ltd is authorised and regulated by the Financial Conduct Authority with registration number 839689. When facilitating access to Wise investment products, Wise Payments Ltd acts as an Introducer Appointed Representative of Wise Assets UK Ltd. Please be aware that we do not offer investment advice, and you may be liable for taxes on any earnings. If you’re uncertain, we urge you to seek professional advice. To find out more about the Funds, visit our website.

It’s quick and easy to open a Wise Business account, with a fully digital application, verification and on-boarding process. Check out the requirements here.

Wise works almost everywhere, and you can open an account in France, Germany, the Netherlands, Italy, Spain, Poland, Romania, Portugal, Switzerland, Ireland, Ukraine, Hungary and of course, the UK.

Register with Wise Business🚀

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Sources used:

1. Velocity Global - A Guide to European Expansion: Best Practices & Tips
2. NordicHQ - Start Your Company’s Headquarters in the Netherlands
3. Eurostat - Which regions have the most highly-skilled employed people?
4. Eurostat - Educational attainment statistics
5. Republic of Estonia e-Residency - Which of these countries is the best to start a company?
6. La French Tech Warsaw - La French Tech
7. The HR Director - Revealed: Best and worst European countries for employment costs
8. Euronews - Which EU countries are the best and worst at speaking English?
9. Euro Company Formations - Top European Countries for New Businesses and Why Entrepreneurs Are Choosing Them
10. Giambrone Law - Understanding the tax system for businesses in Portugal

Sources last checked on date: 11-Jul-2025