Home to 452 million consumers, a stable economy, and advanced infrastructure makes Europe is one of the most attractive regions for entrepreneurs worldwide.
Here’s why most entrepreneurs don’t know.
Starting a business in Europe does not require a large initial investment. Several European countries offer relatively low company formation costs, modest capital requirements, competitive corporate tax rates, and digital registration systems.
If you’re planning to start a business in Europe in 2027, this is what you need to understand.
The cheapest country to start a business in Europe is not necessarily the country with the lowest registration fee. A business might need a few hundred euros to set up but require higher accounting, banking, office, payroll, or tax compliance costs later.
That’s why we at FlorinTax suggest that international founders compare the cost of starting a business and operational costs before making a decision.
In this post, you will read about European countries that can offer a low cost business Europe setup, based on formation requirements, corporate taxation, capital requirements, and ongoing business considerations. The exact starting cost can change depending on the business structure, location, shareholders, professional services, and regulatory requirements. Connect with our subject matter experts for more clarity.
Bulgaria is frequently considered when comparing the cheapest company formation in Europe because both company formation and taxation can be relatively low.
You can set up an EOOD or OOD with a minimum capital of just BGN 2. Further, electronic filing can reduce the registration fee. The country has a flat 10% corporate income tax rate which is also an add-on for you to keep in mind as a business owner. And the dividends are generally subject to a 5% withholding tax in applicable situations.
Combining all these factors makes this country an attractive EU entry point for founders who want low entry costs and a straightforward corporate tax structure. However, the low tax rate does not remove the need for accounting, VAT, payroll, banking, and annual compliance.
Romania remains another option for founders looking for a low cost business Europe environment. One important change for 2026 is that the minimum share capital for a new Romanian SRL increased from 1 leu to 500 lei.
The tax system has also changed. From 2026, qualifying micro-enterprises can fall under a single 1% turnover tax regime, subject to conditions including a EUR 100,000 revenue ceiling. Companies outside the regime are generally subject to the 16% corporate income tax rate.
This makes Romania particularly relevant to smaller businesses that qualify for the micro-enterprise regime. However, founders should not assume that every new Romanian company automatically qualifies.
Estonia is well known for its e-Residency programme and digital approach to business administration.
The official Estonian e-Business Register lists a €265 state fee for establishing a private limited company and allows a minimum capital of €0.01 per shareholder.
Estonia is also different from many traditional corporate tax systems. Corporate income tax generally arises when profits are distributed rather than simply when they are earned. Distributed profits are taxed at 22/78 under the current rules, while profits retained and invested in the company are not subject to corporate income tax at that point.
For digital businesses, SaaS companies, and international founders who want a highly digital administration environment, Estonia can be particularly interesting.
Latvia combines relatively accessible company formation with a tax system focused on taxing distributed profits.
A standard Latvian SIA normally requires €2,800 in equity capital, but a reduced-equity SIA structure can be used under specific conditions. Latvia’s Enterprise Register confirms that reduced-equity companies can have capital below €2,800.
Latvia does not generally impose corporate income tax on profits that remain in the business and are reinvested. Corporate tax is generally applied when profits are distributed and can be useful for businesses that plan to keep profits inside the company for expansion.
Lithuania offers relatively accessible company formation, particularly for smaller businesses that qualify for its reduced corporate tax regimes. The minimum share capital for a Lithuanian UAB was reduced from €2,500 to €1,000 from May 2023.
From 2026, Lithuania’s standard corporate income tax rate is 17%. Qualifying small companies can potentially benefit from a 7% rate, while qualifying businesses can also receive a 0% rate for their first two tax periods under specified conditions.
This makes Lithuania worth considering for smaller companies that meet the requirements rather than simply comparing the headline 17% rate.
Hungary attracts entrepreneurs' attention because its corporate income tax rate is 9%, one of the lowest standard corporate rates in the EU.
However, Hungary is a good example of why tax rate and company formation cost should be considered together. A Hungarian private limited company, or Kft., requires HUF 3 million in initial capital. Which means Hungary may offer a low corporate tax rate but does not necessarily have the lowest initial capital requirement.
Other factors, including accounting, local business taxes, banking and legal costs, should also be included when estimating the overall cost of setting up a business.
Poland can be a cost-effective option for companies that want access to a large European market while keeping their initial corporate structure relatively straightforward.
A Polish sp. z o.o. requires a minimum share capital of PLN 5,000. Companies can register through the National Court Register, including an online S24 route for eligible structures. The standard corporate tax rate is 19%, while qualifying small taxpayers and new companies can potentially use a 9% rate for eligible non-capital-gain income. The small taxpayer threshold is linked to EUR 2 million of revenue under the current rules.
For companies that need a larger domestic market, employees, or regional operations, Poland can be worth considering even when another jurisdiction has a lower registration cost.
Ireland has one of the lowest government incorporation fees in Europe.
The Companies Registration Office currently charges €50 for electronic incorporation of a new company.
Ireland also has a 12.5% corporate tax rate for trading income, although other categories of income can be taxed differently. This combination makes Ireland particularly relevant for international businesses and companies involved in technology, services and cross-border trading.
However, a low €50 registration fee does not mean that the total cost of running an Irish company is €50. Accounting, registered office arrangements and other compliance requirements can add considerably more. Non-resident founders should also pay attention to director residency requirements. Where a company has no EEA-resident director, a Section 137 bond may be required.
Cyprus has historically been included in comparisons of affordable European company jurisdictions.
The government fee for incorporating a company is currently €165, with additional charges possible for name approval and accelerated services.
If you search the internet, there are countless number of articles quoting a 12.5% corporate tax rate, but that figure is no longer current. They have increased the CIT tax rate from 12.5% to 15% from 1 January 2026 and that’s why we have mentioned it in the 9th position.
However, this EU country continues to provide tax incentives for qualifying intellectual property income, with an 80% exemption under the applicable nexus-based IP regime. If you’re planning to set up your business in Cyprus, then use the updated 15% rate rather than relying on older formation guides for making an informed decision.
The Netherlands acts as a gateway for international businesses planning to enter the European market through company formation in the Netherlands. The country acts as an attractive option for business entry and has a well-established business environment.
The best thing about choosing the Netherlands is that you can set up a Dutch BV with as little as €0.01 in share capital. However, incorporation requires a civil-law notary and typically involves higher setup and ongoing compliance costs than some lower-cost European jurisdictions.
The corporate tax rate is 19% on taxable profits up to €200,000 and 25.8% on profits above €200,000.
11. France
France can be included as an affordable European business formation option, particularly for founders who want access to a large EU market and established business infrastructure. However, it is not usually among the very cheapest European jurisdictions when total operating costs are considered.
For common structures such as a SAS, SASU, SARL or EURL, there is generally no statutory minimum share capital, meaning the capital can be set from €1.
Company formation involves more than the registration fee. Businesses generally need to account for registration formalities, a legal notice publication, and potentially professional incorporation costs. For 2025, the official fixed legal-notice rate for a standard SAS was €197 in metropolitan France, while SARL notices were €147.
France’s standard corporate income tax rate is 25%. Qualifying SMEs with turnover of up to €10 million can benefit from a 15% rate on the first €42,500 of taxable profit, subject to the applicable ownership and capital conditions.
Instead of selecting a country purely because it has the lowest incorporation fee, compare your expected business requirements.
A digital founder with no local employees may prioritize online administration and simple cross-border compliance. A trading company may care more about VAT registration, EORI number registration, customs procedures, banking and logistics. A company planning to hire employees should examine payroll taxes and employment costs.
A business expecting to reinvest profits may benefit from a system where taxation is deferred until profits are distributed, such as the current Estonian and Latvian approaches. A company expecting to distribute most of its profits should instead look at the complete tax impact of distributions, including any dividend or withholding taxes and the owner’s tax position.
There is no single answer.
Bulgaria stands out for its low corporate tax rate and low minimum capital. Estonia offers very low capital requirements and digital administration. Ireland combines a €50 online incorporation fee with a 12.5% trading corporate tax rate. Romania offers a potentially attractive 1% turnover tax regime for qualifying micro-enterprises.
Latvia can be attractive for businesses that reinvest profits. Lithuania provides reduced tax rates for qualifying smaller companies. Poland provides access to a large EU market with a 9% tax rate available to qualifying small or new companies.
That’s why the answer varies based on n what you plan to sell, where your customers are, whether you will hire employees, how much profit you expect, how much you will reinvest, and where the owners are tax resident.
Choosing the right European jurisdiction for the company formation is only the first step. Founders should also consider VAT, accounting, annual accounts in the Netherlands, payroll, banking, and cross-border tax obligations. As a founder, you should also need to consider corporate tax registration, VAT, accounting, annual reporting, payroll, banking, and cross-border tax obligations.
FlorinTax helps businesses evaluate and manage their European tax and accounting requirements. Our team thoroughly guides clients and assists in decision-making to ensure a smooth entry into the European markets.
We recommend choosing the jurisdiction not only on the basis of the cheapest business incorporation fee but also on operational cost, compliance obligations, and other requirements. Talk to our subject matter experts today about your European business setup and tax requirements.
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