tax (and startup) friendly countries in Europe

This week there’s been a piece of research circulating through media revealing the worst kept secret in the Euro startup (and freelancing) world: the Baltics are the most friendly startup countries in the EU.

This is actually a very interesting aspect of doing business in the EU - if you run a tech business that sells digital goods, you can benefit from and use the fiscal rules (taxes) asymmetries within the EU countries.

Terms and conditions apply for each case, of course, but a half a day of proper research on the topic can produce a lot of $ savings especially very early in the life of a company.

And it is not only the stock options friendliness that make the Baltics attractive, but also the absolute tax numbers that can vary from country to country, a particular case for all Eastern Europe countries, or even tax heavens that countries like Malta, Cyprus, Andorra or Luxembourg can provide.

In Romania, for example, the corporate tax is 16% of profits and instead of a profit tax a startup can opt to pay as little as 3% from their revenues if they make less than 1 million euro per year in turnover. And the dividend tax is 5%. Those numbers are among the lower in the EU, where they can get as high as 35-40%+.