Starting a Company in Eastern Europe in 2025: Best Places to Do It

In recent years, Eastern Europe has established itself as one of the most attractive areas for foreign investors, thanks to competitive tax regimes, a skilled workforce, and lower operating costs compared to the Western European average.

For those considering expanding their business or starting a new company, the advantages range from having some of the lowest corporate tax rates in Europe to modern infrastructure, along with a pool of workers with growing technical and digital skills. However, each country has its own tax and operational specificities that are essential to understand before starting a business.

Starting a Company in Hungary: Pros and Cons

Hungary holds the record for the lowest corporate tax rate in Europe, with a flat 9% rate. However, the standard VAT is the highest in the EU, set at 27%, with reduced rates for specific goods and services.

Starting a business in Hungary takes an average of 5 days and requires a very small minimum capital. However, according to World Bank data, the country ranks 47th out of 183 for ease of doing business, penalized mainly by the complexity of its tax system (122nd for ease of paying taxes).

The workforce is well-educated with solid technical skills, especially in engineering and manufacturing. Wage costs are rising — up 10.2% in the first quarter of 2025 — but they remain competitive compared to the EU average.

Starting a Company in Slovakia: What to Know

As of January 1, 2025, Slovakia increased its standard VAT from 20% to 23%, while corporate tax is set at 21%, but drops to 10–15% for small businesses with revenues under €100,000.

The country is well-positioned logistically, in the heart of Europe, and has modern infrastructure. However, social contributions are relatively high, impacting labor costs. Procedures for setting up a company are streamlined and digitalized, but higher tax rates compared to other countries in the region may reduce its appeal for investors focused solely on tax optimization.

Read also: Opening a Holding in Bulgaria: A Complete Guide

Starting a Company in Romania: Advantages and Disadvantages

As of January 1, 2025, the maximum turnover threshold to access Romania’s simplified microenterprise regime has been drastically reduced from €500,000 to €250,000, and the dividend tax rate has increased from 8% to 10%.

On the VAT front, starting this month, the standard rate will rise from 19% to 21%, an increase that will have an immediate impact on both business costs and domestic consumption.

Operationally, Romania continues to offer a competitive and skilled workforce, with average wages still lower than the EU average, although rising. The procedures for starting a company have been simplified in recent years, but bureaucracy remains heavier than in some other Eastern economies.

Starting a Company in Poland: What to Watch Out For

Poland is one of the strongest and most stable economies in Eastern Europe. Corporate tax is 19%, reduced to 9% for SMEs. Standard VAT is 23%, with reduced rates of 8% and 5% for certain goods and services.

The workforce is large and skilled, but there has recently been an 11.2% increase in wage costs. In addition, bureaucracy is far from streamlined and often complex.

Starting a Company in Estonia: Is It Still Worth It?

Estonia has a 0% corporate tax rate on reinvested profits; however, dividends are taxed at 22%, limiting tax savings if you withdraw profits from the company. In July 2025, the standard VAT rate increased from 22% to 24%.

Although bureaucracy is relatively simple, from 2026 additional costs for businesses are expected, as they will have to pay a 2% defense tax, effectively increasing the overall tax burden.

Read also: Tax Incentives in Bulgaria: A Comprehensive Overview of Allowances and Deductions

Why Choose Bulgaria?

Bulgaria remains one of the most competitive EU countries in terms of taxation. The corporate income tax (CIT) rate is 10%, unchanged in recent years and among the lowest in the EU. The standard VAT rate is 20%, with a reduced 9% rate for certain sectors.

Operationally, the country is highly regarded for its low labor costs, strong specialization, and good infrastructure. Its strategic geographical location between Europe, Asia, and the Middle East makes it a natural hub for international trade.

The procedure to start a company in Bulgaria is relatively straightforward: it typically takes 2–3 working days to register an OOD and much of the documentation can be handled digitally.

For entrepreneurs and investors wishing to start a business in Bulgaria, relying on an experienced local partner is the safest choice. Accountancy Bulgaria, a tax advisor in Bulgaria, supports companies at every stage: from selecting the most suitable legal form to managing accounting, all the way to full tax compliance.