Expanding borders: how to open a business in Europe if you are not an EU citizen?

How can a Ukrainian start a business in the EU without citizenship? What documents are needed, where is it easier to start, and how to avoid mistakes? Find out how to register a company in Europe, adapt your brand and scale your business without unnecessary risks in an interview with Visit Ukraine and MK:translations experts

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Ukrainians are actively entering European markets: some through the relocation of business and production, and some in the hope of scaling their brand. Many questions arise: do you need to physically move to a European country to do this, how do you adapt your brand to the new environment, how do you hire staff, what are the risks for non-resident EU businessmen? The secret to successful business scaling in Europe lies in localization and understanding the culture of the country where your future business partners, employees, and customers live. We talked to Yulia Ventskovska, CEO & Founder of Localica.io and MK:translations, and Andriy Shurin, Corporate Law Expert at Visit Ukraine legal team, and asked them to share their tips and practical advice for successfully launching a new business.

What are the main legal steps to take to start a business in Europe if you are not an EU citizen?

Andriy Shurin: You need to carefully weigh the advantages and disadvantages of the countries you are considering as options for doing business, assess the economic opportunities and market prospects, tax burden, level of bureaucracy, and choose the jurisdiction that suits you best.

The first step is to determine the optimal legal form of doing business: European legislation offers a wide range of options: from individual entrepreneurship to joint stock companies.

A limited liability company (GmbH in Germany, Sp. z o.o. in Poland) is the most popular choice due to the limited liability of the founders and the relative ease of management. For large investment projects or public companies, joint-stock companies (AG in Germany, SA in France) are appropriate, as they allow raising capital through the stock market.

The choice of form depends on many factors, including the amount of investment, the number of founders, business expansion plans, and local capital requirements. After determining the legal form, you need to go through the procedure for registering a company in the chosen country, which will include:

● Preparation of constituent documents

● obtaining a tax identification number

● opening a bank account

● registration in the trade register or similar institutions;

● Contribution of the authorized capital.

It should also be borne in mind that in some areas of activity (e.g., financial services, tourism, medicine), special licenses or permits are required.

What are the first steps to be taken after legal registration to ensure that the business integrates seamlessly into the local market?

Yulia Ventskovska: First of all, even before legal registration, it is worth assessing the possibility of entering the market without setting up a local company. For example, if you have a multi-currency account and can accept payments from foreign clients, registering a new company may not be the first step.

However, if market rules require you to work only with local companies, for example, in some US states, then establishing a legal entity in the country is necessary.

Once the decision to incorporate has been made, the next step is to build a team. It is important to determine whether your current team will be able to cover all key needs, particularly in sales, or whether you will need to hire new specialists. Planning business processes and staffing structure should be part of the business plan even before the company is officially registered.

Next, you should prepare a marketing strategy, in particular, by answering the following questions: how to attract customers, what channels to use, what the competitive strategy will be, etc.

The next step is market analysis, including competitor research, product line definition, and pricing. It is important to assess the start-up capabilities and growth potential, in particular, how many customers the company will be able to serve at the initial stage, for example, in the first three months of operation.

After that, a launch plan is formed taking into account the marketing strategy, costs, and business processes. And only when all these aspects are worked out should you consider legal registration and adaptation to local legal requirements.

What documents are required to register a business in the EU for third-country nationals? What do the document requirements depend on?

Andriy Shurin: Typically, third-country nationals need to provide the following documents to register a business in the EU:

● Foreign passport.

● Company's constituent documents (charter, memorandum of association, ownership structure).

● Documents confirming the source of funds.

● A completed registration form signed by all founders.

● Lease agreement for office space or virtual office, or other document confirming the legal address of the company.

All documents must be translated into the official language of the country of registration and apostilled in accordance with the Hague Convention of 1961. For Ukrainian citizens, it is important to take into account the requirements for translating Cyrillic documents in countries with the Latin alphabet.

Are there any industries where Ukrainian businesses have a cultural advantage in Europe?

Yulia Ventskovska: If we talk about the industries where Ukrainian business has a high reputation, it is certainly the IT and agricultural sectors. Ukrainian companies in these sectors have already gained trust in the international market.

However, the concept of “cultural advantage” in business is quite subjective. Culture manifests itself in communication - between companies, people, and professional communities. But culture cannot exist without its carriers.

For example, if a Ukrainian opens a beauty salon abroad, provides high-quality service and a competitive offer, he or she can succeed. However, this will not be the result of cultural peculiarities, but of understanding the client and the market.

When we enter the international market, we are first and foremost entrepreneurs representing our country. However, in business, the main role is played not by national peculiarities, but by professional skills, service level and attitude towards clients and partners.

Thus, the “cultural advantage” depends more on specific people and the approach to doing business than on belonging to a particular nation.

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Are there any European countries where it is easier for foreigners to start a business? What are the peculiarities/advantages of such countries?

Andriy Shurin: Globally, the registration procedure is similar in different EU countries, but the level of regulation, bureaucracy, duration of these procedures, as well as the availability of preferences for entrepreneurs in certain areas can vary significantly.

Some European countries do offer more favorable conditions for foreigners to start a business.

Among them:

● Estonia: offers a simplified company registration procedure and e-residency for foreigners.

● Ireland: has one of the lowest corporate tax rates and an attractive environment for technology companies.

● Latvia: offers a favorable regime for fintech companies.

● Cyprus: attracts foreign entrepreneurs due to low tax rates, special investment regimes and the possibility of obtaining non-resident status

How to adapt a brand to another market without losing its identity?

Yulia Ventskovska: For a brand to remain recognizable in the international market, it is important to preserve its unique voice - the tone, key characteristics and values laid down at the stage of creation. However, the tone may vary from country to country.

For example, in Poland, the formal address “Mr. or Ms.” is the norm, while in Ukraine, first and middle names are more commonly used. In Spain, people are often addressed as “you” in business meetings, but choose a more formal form when speaking in public.

Despite these nuances, the brand's core values - respect for partners, contractors, and customers - remain unchanged. Adaptation is evident in the details, but does not affect the fundamental principles of the brand.

What does the process of obtaining a residence permit look like for a businessman who is opening a company in Europe? And what are the alternatives for foreigners who want to develop business in Europe without permanent residence?

Andriy Shurin: The process of legalization through entrepreneurial activity in the EU is based on two key conditions:

1. Economic utility - the business must contribute to job creation, innovation or investment;

2. Financial stability - the founder must prove the availability of funds for the development of the company and his/her own support.

The general mechanism for obtaining a residence permit through a business is quite simple. The procedure for obtaining a permit involves registering a company and submitting an application for a permit to the migration service with a package of necessary supporting documents:

● A business plan with profit forecasts,

● Business benefits for the country's economy,

● confirmation of the source of capital

● Identity of the founder (passport, certificate of no criminal record with apostille),

● payment of the state fee.

Alternative options for obtaining a residence permit include the following:

● Business visa - a short-term visa for staying in the country for the purpose of developing business contacts or participating in conferences.

● Work visa - which can be obtained more quickly by employing yourself in your own new company.

● Digital Nomad Visa - a special regime for self-employed professionals who work remotely and can manage their business from anywhere in the world.

● Investment citizenship or residency programs - some countries offer the possibility of obtaining residency on condition of investment in the local economy. This is how “golden” visas and passports are offered: Portugal, Greece, Malta, and Spain.

For foreigners who want to develop their business in Europe without living there, they should consider remote management through local representatives - with the power of attorney to represent a local director, use of a virtual office, use of digital residency programs (if the country offers them).

Why is localization of marketing campaigns critical? What are the most common mistakes made by businesses?

Yulia Ventskovska: Localization is a tool, not an end in itself. It helps companies enter new markets more efficiently, saving money on testing.

An adapted marketing campaign allows a brand to speak the language of the audience, which builds trust and increases engagement. Customers perceive such a brand as “their own” and this has a positive impact on sales.

One of the most common mistakes businesses make is literal translation without taking into account the cultural context and semantic features of the market. This leads to irrelevant messages that do not resonate with the audience. In addition, businesses often fail to understand the real needs of the market and instead try to sell something that is not in demand there.

Another typical mistake I can identify is the direct copying of a business model and pricing policy from one market to another. Without adapting to local realities, this makes the brand uncompetitive.

Successful entry into a new market is not just a translation of a campaign, but its full adaptation to local peculiarities, consumer expectations and the competitive environment.

What are the biggest legal mistakes foreign entrepreneurs make when starting a business in the EU?

Andriy Shurin: I would divide all this into large groups: mistakes in statutory documents, ownership structure, mistakes in contracts, agreements, mistakes in determining the type of activity and incorrect reporting.

1. Errors in statutory documents and ownership structure

Statutory documents are a fundamental document that defines how a legal entity functions, distributes powers between participants and officials, and establishes rules for decision-making and interaction within the company. Flaws in the constituent documents can cause problems in the future, especially if the founder of the company does not operate it personally but appoints a director.

2. Errors in contractual documentation

Using contract templates without adapting them to local laws creates risks of litigation. For example, employment contracts in Germany require the mandatory inclusion of provisions on probation and social guarantees.

3. Violation of business licensing requirements

Both self-employed entrepreneurs and legal entities are required to obtain all necessary licenses and permits to conduct their activities in accordance with the requirements of local law. Failure to comply with these requirements may result in fines, suspension of operations, and in some cases, loss of the right to do business in a particular jurisdiction.

4. Ignoring financial reporting requirements

Local regulators require strict compliance with accounting and reporting standards. Failure to comply with these requirements may result in fines and penalties.

How to work with the language barrier? Is English enough to do business in Europe?

Yulia Ventskovska: The language barrier should be considered in two ways: online brand communication and direct interaction between people (human-to-human communication).

Online communication is a process where a brand communicates with the audience without directly addressing an individual. Research shows that 80% of consumers prefer to interact in a language that is native or understandable to them. Therefore, it is important to adapt content to local markets, otherwise there are risks of loss of trust and poor positioning.

Human-to-human communication includes all situations where company representatives (managers, executives, salespeople) communicate directly with customers, partners, or contractors. It is important not only to know the language but also to understand cultural peculiarities and business etiquette. If a brand representative does not speak the language or is not familiar with local traditions, he or she can ruin the image of the company that the entire team has worked on.

English is the main language of international business, but it is not enough for deep interaction in individual countries. In Germany, France, or Spain, speaking the local language offers significant advantages. Therefore, adapting business communication is essential for successful integration in new markets.

What are the main peculiarities of business taxation for foreigners in the EU? Is it possible to get tax benefits or subsidies for new companies, and which countries offer the best conditions for this?

Andriy Shurin: Corporate taxation in Europe is quite diverse and varies from country to country. The main taxes include:

● Corporate income tax - the tax rate can vary significantly. For example, Ireland is known for its rate of about 12.5%, while other countries may have higher rates.

● Value added tax (VAT) - standard VAT rates vary from 17% to 27% depending on the country, with preferential treatment for certain categories of goods and services.

● Social contributions - in addition to corporate taxes, companies have to take into account the costs of social contributions and employee insurance.

Among the EU countries that offer attractive tax conditions, we can mention:

● Estonia, which leads the ease of doing business rankings and offers 0% income tax on retained earnings, which encourages reinvestment

● Hungary, which offers a low corporate tax rate and tax holidays for companies investing in regions with high unemployment.

● Cyprus, which is still popular for international businesses due to its low corporate tax rate (12.5% on profits) and the possibility of optimization through holding structures.

● Lithuania stands out for the lowest tax rates in the EU for small businesses - 5%.

In addition, almost every EU country offers preferences for companies investing in research and innovation. For example, France offers the JEI status, under which new companies operating in the technology sectors defined by the program can obtain a status that provides full exemption from corporate tax during the first year and 50% exemption during the second year.

What are the peculiarities of hiring personnel in different European countries? How do cultural aspects affect it?

Yulia Ventskovska: The process of hiring staff depends on the legislation, labor law and cultural peculiarities of each country. It is important to consider some key aspects. Firstly, before entering a new market, a company should familiarize itself with the legal regulations on the minimum wage, the permissible number of working hours, and the specifics of social guarantees and employee rights. For example, in Spain, the working week was shortened by 2.5 hours without reducing wages, which affects the competitiveness of the employer's offer.

Second, businesses need to take into account cultural values. Different countries value different work-life balance. In Spain and Italy, employees value leisure time more, while in Germany or Switzerland, more attention is paid to productivity. Accordingly, the employer's offer should take these priorities into account.

Third, expectations regarding working conditions may vary depending on the level of the position. Line workers are more focused on stability and social guarantees, while top managers may expect bonuses, flexible working hours, or relocation packages.

Fourthly, it is important to take into account gender and social characteristics. In some countries, such as Saudi Arabia, women were granted the right to work only in 2017, while in Ukraine it is legally prohibited to indicate gender in vacancies.

To successfully hire staff in Europe, a company needs not only to know the legal aspects, but also to understand the cultural characteristics and expectations of employees. This will make the offer more competitive and attractive to the local market.

What are the main legal tips you would give to Ukrainian entrepreneurs who want to start a business in Europe?

Andriy Shurin: First of all, Ukrainian entrepreneurs should thoroughly research which country is most suitable for their business, assess the investment climate and tax regime.

Before entering the market, it is worth conducting a legal audit to avoid a situation in the future when an entrepreneur learns about a condition that he or she had to fulfill after it has already been violated.

In addition, entrepreneurs can be advised to explore the use of government support instruments: both the EU as a whole and its member states are very interested in revitalizing economies and promoting small businesses. It is worth finding out what grants and preferential lending regimes are offered in your field of activity.

We remind you! You can get advice and full legal support for the relocation of Ukrainian business or starting a company from scratch outside Ukraine through Visit Ukraine specialists. Leave a request on the website to get help from professionals.

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