Ever since COVID-19, companies as well as individuals need to take multiple factors into account to keep their business going steadily. The current market environment can also be a bit scary for entrepreneurs who are starting out. If you are someone who is coming up with a startup, the personal finance website NimbleFins has updated and revised its study ranking the best European countries for startups in 2020. The study can help one decide which country they should launch their new startup in, to reap maximum benefits.
Best European countries for Startups in 2020
After conducting in-depth research and analysis, NibleFins has updated its study to rank the top European countries for startups this year. The firm analysed current economic data covering the general economic health, cost of doing business, business environment and labor force quality of 31 European nations to finalise the report.
As per the report, the best European countries for startups feature highly educated populations, exhibit strong economies, healthy business environments and relatively low costs for conducting business. Additionally, the scoring system takes relevant publicly-available data into account to rank each country across several categories and do note that lower scores indicate higher ranks, which means these locations are better for startups.
#1 Germany
Germany tops the study as the best European country for startups for the second year running. The country’s top position is owed to a healthy economy and favourable business climate. Germany offers notable access to venture capital, which is bound to benefit startups on the lookout for funding and it ranked 2nd, behind Switzerland, for being the least burdensome in terms of government regulations. In addition, it features a relatively low corporate tax rate of 15.825%, which can be incentivising for entrepreneurs. The competition in the country is also not restrained by a few large players and it has a highly-educated workforce too, both factors beneficial to startup founders.
#2 United Kingdom
United Kingdom retains its 2nd spot this year too as a great place for new companies, thanks to venture capital accessibility and relative ease of doing business, despite relatively low GDP growth expectations. Added bonus is lower costs of conducting business for startups in terms of salary expectations and the country ranks 4th for the ease of finding skilled workers. Lower corporate tax rates of 19% is also attractive for startups and the fact that startup support organisations are already present to help budding companies is certainly an added bonus.
#3 Switzerland
Switzerland has moved up to take the 3rd spot in the study as one of the best places to start a new company. The country ranks 1st in two categories: Business Climate and Labour Force Quality. With least regulatory burdens for startups over other European countries and the best market dominance conditions, Switzerland makes things easier for new market entrants. The country also gets the highest scores for the extent of staff training and quality of vocational training. Additionally, it has the 2nd highest percentage of people who have received a tertiary education (38.6%). The segment it falls short in is the cost of doing business as it is one of the more expensive places to start a business due to high costs of living and salary expectations, and it has one of the lowest expectations for GDP growth.
#4 Netherlands
Coming in fourth as the best European country to work for in 2020, Netherlands features an Economic Health rank of 2. While the cost of doing business in Netherlands is a bit on the higher side at 27 with corporate tax rates of 25% , it makes up for it with its notable labour force quality and business climate rank of five and six respectively. In terms of economic health, Netherlands bags the second position with a total GDP of $909.1 billion (€763 billion) and a steady GDP growth of 1.8%.
Notable study highlights
Apart from the top countries to commence a startup in, the study also highlights some interesting points. Ireland, for example, scores the highest in Economic Health, with the Netherlands and Germany coming in second and third. Bulgaria, Romania and Hungary on the other hand are the best places for startups in terms of Cost of Doing business. This is because the average salary is lowest in Bulgaria, while corporate tax rates are most favourable in Hungary.
As mentioned above, Switzerland features the most supportive Business Climate and standing out in the Market Dominance and Regulatory Burden categories. It also features the highest Labour Force Quality, based on the education and training trends amongst the population. Finland and Denmark rank second and third place in this category respectively.
Cover image credits: Shutterstock
