July 30, 2021

The UK is the Best European Country to Start a Business In, According to New Index

The UK is the best European country to start a business in, new research has revealed.

Aiming to discover which European countries are the best to start a business in, Tide collated data on 10 criteria points, including: GDP; tax revenue; unemployment rate; market cap of listed companies; number of start-up procedures; cost of start-up procedures; time required to start a business; new business density; ease of doing business score; and gender pay gap.

Each of the countries analysed (the 27 EU countries, plus the UK) were ranked for each of the above criteria points, before an average rank across all aspects gave the final position.

Top 10 European countries to start a business:

  1. UK
  2. Ireland
  3. Netherlands
  4. Denmark
  5. Estonia
  6. Sweden
  7. France
  8. Slovenia
  9. Lithuania
  10. Romania

Performing well across several categories, the UK was found to be the best country to start a business in overall. Ordered from best to worst performance, the UK ranked in the following positions for each criteria point:

CRITERIA POINT RANK (OUT OF 28)
Cost of start-up procedures 1 (joint)
GDP 2
Ease of doing business score 2
Market cap of listed companies 3
New business density 5
Number of start-up procedures 6 (joint)
Time required to start a business 6 (joint)
Unemployment rate 7
Gender pay gap 21
Tax revenue 23

The UK was followed by Ireland, the Netherlands, Denmark, and Estonia, which made up the remainder of the top 5.

The winner(s) per category were as follows:

CRITERIA POINT LEADER(S) STAT NOTES
GDP Germany $3,845,630,030,824 2019 data
Tax revenue Germany 11.5% % of GDP
Unemployment rate Czech Republic 1.93% % of total labour force, modelled ILO estimate
Market capitalisation France $2,365,950,236,659 Current US$
Number of start-up procedures Finland, Ireland, Greece, Slovenia, Estonia 3 procedures Start-up procedures are those required to start a business, including interactions to obtain necessary permits and licenses and to complete all inscriptions, verifications, and notifications to start operations
Cost of starting a business Slovenia, UK 0% Percentage of GNI per capita
Time to start a business Denmark, France, Estonia, Greece, Netherlands 4 days Days
New business density Estonia 23.6 New registrations per 1,000 people ages 15-64, based on latest figures for each country – 2018
Ease of doing business Denmark 85 0 = lowest performance to 100 = best performance
Gender pay gap Luxembourg 1.3% Unadjusted gender pay gap, as a percentage of male gross earnings – 2019

Liza Haskell, Chief Administrative Officer at Tide, added:

“According to Companies House, more than 750,000 (768,777) new companies were incorporated in 2020, compared to 678,419 in 2019 and 657,868 in 2018. There were 211,368 new company incorporations in Q1 (January to March) of 2021, highlighting a steady upward trend in new business creations over the last few years, which demonstrates that many more people are taking the opportunity to start a business in the UK. This, along with our research, shows that the UK is a great place to do business. As well as topping the cost of starting a business criteria (tied with Slovenia), the UK also performed well in a range of other categories to earn the top spot overall.

“While it is certainly possible to start a business in most countries, some countries are more inviting than others. The commercial hurdles manifest in different ways, including things like high tax rates, expensive start-up fees, and slow-moving business creation processes. Other factors to consider are unemployment rates, the saturation of new businesses, the ease of doing business, and the level of gender pay equality. These are all values that can indicate the health of an economy, the prospects for your company, and the cultural values and norms that you will operate within”.

For more information on the research, visit: https://www.tide.co/blog/business-tips/best-european-country-to-start-a-business/