Where Is the Best Place to Open a Company in Europe in 2026? Comparison of 9 Countries for Entrepreneurs

Choosing a country to open a company in Europe is not just a question of tax rates. It is a strategic decision that depends on your goals: whether you want to obtain a residence permit, conduct international trade, optimise taxes, or simply have a European legal address.

In this article, we compare nine popular jurisdictions: Hungary, Germany, Italy, Spain, Serbia, Cyprus, Montenegro, Malta and Portugal. The comparison covers the key criteria, including taxes, registration speed, and opportunities for obtaining a residence permit, permanent residence and citizenship.

IST Hungary is a Hungarian consulting company with its head office in Budapest. We have offices in 12 countries worldwide, which allows us to support clients at every stage, from choosing a jurisdiction to obtaining a residence card.

Comparative Table: Taxes and Business Conditions (2026)

Hungary: The Lowest Tax Rate in the EU

Hungary is the absolute leader in corporate tax with a rate of just 9%, the lowest in the European Union. For companies operating in international markets, this provides significant savings.

Key features:

• Company registration (Kft) takes 15 working days through the electronic one-stop-shop system
• Minimum share capital for a Kft is 3 million forints (approximately 7,700 euros)
• Hungary does not levy withholding tax on dividends, interest and royalties paid to foreign companies, which makes it an attractive holding jurisdiction

Residence via company: yes, opening a company gives the right to obtain a residence permit for up to 4 years for founders and family members.

Path to permanent residence and citizenship:

• Permanent residence after 3 years of legal residence
• Citizenship after 8 years of legal residence (with a mandatory Hungarian language exam)

Who it suits: export-oriented companies, IT businesses, holdings, and entrepreneurs who want to minimise taxes and obtain a European residence permit.

Germany: The Largest Market, but High Bureaucracy

Germany offers access to the largest economy in Europe and highly qualified talent. However, doing business here requires patience.

Taxes: the corporate tax rate is 15%, but including the trade tax (Gewerbesteuer) and solidarity surcharge, the total burden reaches ~30%. From 2028 the rate will gradually decrease by 1 percentage point per year, reaching 10% by 2032.

Registration: takes 2–4 weeks and requires interaction with the tax office, trade authority and other bodies.

Residence via company: possible, but the process is complex and requires proof of the economic significance of the business.

Path to permanent residence and citizenship:

• Permanent residence after 5 years of legal residence
• Citizenship after 8 years (requires knowledge of German and renunciation of previous citizenship in most cases)

Who it suits: companies targeting the German market, industrial production, and R&D projects.

Italy: New Incentives for Investment

In 2026, Italy launched a large-scale programme of tax incentives for business.

Taxes: the base rate is 24%. For investments in new equipment, a “hyper-depreciation” regime has been introduced: the tax base can be increased by 180% for investments up to 2.5 million euros.

For small business: the rate is 15% on the first 85,000 euros of income under the simplified regime (regime forfettario), and for startups 5% for the first 5 years.

Registration: 1–2 weeks, but bureaucracy remains complex.

Residence via company: possible, but the process is lengthy and requires significant investment.

Path to permanent residence and citizenship:

• Permanent residence after 5 years of legal residence
• Citizenship after 10 years (requires knowledge of Italian)

Who it suits: manufacturing companies, startups, and businesses ready to invest in equipment.

Spain: Startup Visas and Low Taxes for New Companies

Spain actively supports entrepreneurs through the Startup Act (Ley de Startups).

Taxes: the base rate is 25%. For startups 15% for the first 4 profitable years. For micro-enterprises (turnover up to 1 million euros) 21% on the first 50,000 euros of profit.

Registration: possible remotely, takes 1–4 weeks.

Residence via company: there is a special startup visa, but ENISA certification is required.

Path to permanent residence and citizenship:

• Permanent residence after 5 years of legal residence
• Citizenship after 10 years (requires knowledge of Spanish; Spain does not recognise dual citizenship with Russia)

Who it suits: technology startups, IT companies, and businesses focused on the Spanish-speaking market.

Serbia: Fast Registration and Low Taxes

Serbia is a popular destination for entrepreneurs from the CIS thanks to the simplicity of doing business.

Taxes: corporate tax 15%. For large investors (100+ employees, investments from 8.5 million euros), 10-year tax holidays are available.

Registration: fully online, takes 1–5 days.

Residence via company: yes, it is possible to obtain a temporary residence permit for up to 3 years through establishing a company.

Path to permanent residence and citizenship:

• Permanent residence after 5 years of legal residence
• Citizenship after 8 years (requires knowledge of Serbian)

Who it suits: IT companies, startups, and entrepreneurs who want to start a business in Europe quickly and inexpensively.

Cyprus: Low Tax and English Law

Cyprus is a classic jurisdiction for international business.

Taxes: corporate tax 12.5%, one of the lowest in the EU.

Advantages: English common law, a developed banking system, and access to the EU market.

Residence via company: yes, it is possible to obtain permanent residence through investment or a company.

Path to permanent residence and citizenship:

• Permanent residence after 5 years of legal residence
• Citizenship after 7 years (requires knowledge of Greek)

Who it suits: holdings, financial companies, and IT businesses working with the EU.

Montenegro: Low Taxes and Fast Residence

Montenegro offers attractive conditions for small and medium-sized businesses.

Taxes: corporate tax 15%, but for small enterprises (turnover up to 100,000 euros) 9%.

Registration: 1–2 weeks.

Residence via company: yes, possible.

Path to permanent residence and citizenship:

• Permanent residence after 5 years of legal residence
• Citizenship after 10 years (requires knowledge of Montenegrin)

Who it suits: tourism businesses, real estate, IT companies, and entrepreneurs seeking access to the Adriatic.

Malta: Effective Tax Rate of ~5%

Malta is a popular jurisdiction for international tax planning.

Taxes: the nominal rate is 35%, but thanks to the tax refund system, the effective rate is about 5%.

Registration: 2–4 weeks.

Residence via company: yes, there are programmes for investors and entrepreneurs.

Path to permanent residence and citizenship:

• Permanent residence after 5 years of legal residence
• Citizenship after 5 years (Malta offers one of the fastest naturalisation programmes in the EU, subject to investment)

Who it suits: holdings, trading companies, and businesses working with the EU.

Portugal: Access to the EU and a Startup Ecosystem

Portugal has become the centre of Europe’s startup ecosystem.

Taxes: corporate tax 21%, for small enterprises 17% on the first 50,000 euros.

Registration: 1–2 weeks.

Residence via company: possible, but the process can be lengthy.

Path to permanent residence and citizenship:

• Permanent residence after 5 years of legal residence
• Citizenship after 10 years (requires knowledge of Portuguese)

Who it suits: IT companies, digital nomads, startups, and businesses that value quality of life.

Which Country to Choose? Recommendations by Goals

• If your goal is minimal taxes: choose Hungary (9%) or Malta (effectively ~5%)
• If your goal is fast residence via business: choose Hungary (up to 4 years) or Serbia (up to 3 years)
• If your goal is fast citizenship: choose Malta (5 years) or Cyprus (7 years)
• If your goal is access to the largest EU market: choose Germany or Spain
• If your goal is a startup ecosystem: choose Spain (Ley de Startups) or Portugal
• If your goal is simplicity and speed of registration: choose Serbia (1–5 days)

How Can IST Hungary Help?

IST Hungary is a Hungarian consulting company with its head office in Budapest. We have offices in 12 countries worldwide, which allows us to support clients at every stage, from choosing a jurisdiction to obtaining a residence card.

We offer:

• Consultation on choosing the optimal jurisdiction for your business
• Company registration in Hungary and other countries
• Assistance with opening bank accounts
• Support in obtaining a residence permit through opening a company
• Full case management, from idea to receiving the residence card

Contact us for a consultation.

This article is for informational purposes only and does not constitute legal or tax advice. Tax legislation may change. For up-to-date information and individual advice, please contact the specialists at IST Hungary.