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“Public and private initiatives increasingly recognize social entrepreneurship as a means of addressing a wide range of social needs”
– The Economist, 2010.

Nation’s formal institutions redistribute economic wealth through tax structures, not only to provide common welfare of its citizens but also taxation is often used to help business through government funding the money back into the economy as long-term loans or subsidization.

Moreover, understanding tax policy’s helps business reduce its tax liability, thereby increasing its profitability.

Untangling economies: how Europe eases its fiscal policies for start-ups

European economies have been aiming to improve the labor market environment to get out of the crises, but also to level social progress and inspire entrepreneurship Europe-wide.

Countries such as: Bulgaria, Malta, Norway, Slovakia, Spain, UK and Austria began to simplify pre-registration and registration formality’s to make it easier to start a business, while others abolished or reduced minimum capital requirement or made it easier to pay taxes by introducing electronic systems or by reducing tax rates. Nevertheless, nations are trying to provide better business opportunities.

A study by Eurostat points at the importance of taxes as the heart of citizens’ relationship with the state, but also the significant role they play in the EU economy.

“In 2012, the overall tax ratio, i.e. the sum of taxes and compulsory actual social contributions in the 28 Member States (EU-28) amounted to 39.4% in the GDP-weighted average, nearly 15 percentage points of GDP over the level recorded for the USA and around 10 percentage points above the level recorded by Japan”.

Nonetheless, startups and young entrepreneurs have taken a significant role in today’s financial systems, progressively making their mark in counties budgets. Also, they all have something in common – they all got tangled in nation’s economies.

Where are the most favourable taxation regimes in Europe?

To make the life of startup founders and entrepreneurs easier, we created an overview of taxation trends in 30 European countries, member states of the EU, including Iceland and Norway as part of the European Economic Area.

We took in consideration 5 different criteria important for startups, such as:

  • Value added tax (VAT);
  • Minimum capital needed to start a company (in Euros per country);
  • Credit rank (The rank determines the ease of getting access to funding (such as bank loans); the higher, the easier the access);
  • Corporate tax (in %), and
  • Minimum wage (in Euros).

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