Startup Playbook

Startups in Europe: Innovative Potential of European Economies

In 2021, Europe was called the “fastest growing region for VC investment,” with startups attracted $121 billion of capital, compared to $41 billion attracted in 2020. Today, Europe hosts over 320 unicorn startups, with almost every third of them being created in 2021.

France, Germany, Italy, Spain, and the UK together host over 1,200 business incubators or accelerators, while the Netherlands alone has more than a hundred of them.

The reason for such an impressive growth lies in how the European startup ecosystem embraces new technologies and online services to adapt to global changes. Some countries do it way better than others.

Startup founders should consider a slew of factors when it comes to choosing the best country to host their company. 

Looking to apply for EU Funding? Check out the article on writing a successful application here

There is plenty of research and annual reports that explore the investment climate, costs of doing business, legislation environment, and the innovative potential of various countries’ economies.

The UK: the highest attracted investments

The UK startup ecosystem managed to almost double the overall investment flow from $9.6 billion in the second half of 2020 to the astonishing $18.9 billion in the first half of 2021.

The country attracts startup founders with a good business climate and relatively low costs of doing business, thanks to declining corporate tax rates, business-friendly regulations, and better access to venture capital financing.

On top of that, startups who choose the UK to be their base of operations can also benefit from a large number of governmental and private organizations assisting to freshly-created ventures.

The only drawbacks that pulls the UK back from being the ultimate landing pad for startups in Europe are high cost of living in the country and a huge competition for experienced developers, which dramatically increases the hiring cost of skilled IT professionals.

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The Netherlands: the highest economic health score

No surprise, the Netherlands is also on the list of the top European countries for aspiring entrepreneurs to establish a business, along with the UK, Germany, Sweden, and Switzerland.

The economy of the Netherlands has been consecutively acknowledged among the healthiest and the most innovative in Europe. Dutch startups enjoyed a venture capital investment flow of $3.68 billion for the first six months of 2021 and the numbers keep growing.

The country continues its ascension in the annual ranking by NimbleFins as one of the best countries for startups in Europe. Thanks to high levels of education and staff training, the Netherlands scores high points in Labor Force Quality, while business-friendly legislation and a great number of startup-focused incubators like StartupAmsterdam provide excellent climate for young innovative ventures.

On the other hand, high costs of doing business require that startups in the Netherlands provide well-thought-out business plans, in order to make it before receiving their first venture capital investment or one of dozens of governmental or non-governmental grants.

Young and promising ecosystem for startups in Malta

For those who strive to launch a project in Malta – and get a residence permit along the way – there is the Malta Start-Up Residence Program.

The program is focused on both experienced entrepreneurs and startuppers at university level who are ready to fulfill the requirements set by the government and contribute to the country's economy.

While a number of other European countries have adopted similar programs for quite some time now, Malta is new to it. But it doesn't seem to be a problem for the island nation to develop a progressive attitude and favorable conditions for attracting foreign investment and talent as part of this initiative.

Malta is well-known for having a long history of entrepreneurship and family businesses, which can be proud of their success stories.

As of now, the most promising and demanded sectors for running a business in Malta are information technologies, including gaming and blockchain, the consumer sector, and healthcare.

It gives a clearer picture of the advanced business infrastructure in Malta that offers entrepreneurs highly-developed IT infrastructure, accessibility, and business support services.

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