By Company Registrations Worldwide, 24th Nov 2021
France ranked as the best country in Europe for five-year business survival rates of small businesses.
We are pleased to share the most recent list of European countries where newly founded businesses fare best according to data from Eurostat. The majority of new companies start as micro-enterprises which will be the focus of this article. A microenterprise is defined as having fewer than 10 employees and an annual turnover or balance sheet of below €2 million.
Best Ranked Countries for micro-enterprise survival
France has been ranked the best country in Europe for micro-enterprise survival according to data from Eurostat. An impressive 75% of French micro-enterprises were still in operation over a five year period. This survival rate is based on Eurostat data from 2013-2018.
In 2013, 46,549 micro-enterprises were formed in France, 35,060 of which were still running five years later. These findings are somewhat surprising given that France has a reputation for bureaucracy, inflexible labour laws and a corporation tax rate of 26.5%. However, France is the second-largest economy in the Euro Zone and is already showing steady economic recovery from the pandemic.
Sweden is the second-ranked country for sustainable micro-enterprises, with a five-year survival rate of 73%. In 2013, 17,574 new companies were formed in Sweden, 12,908 of which were still in operation after five years.
Slovakia came in third with a survival rate of 70% for micro-enterprises. In 2013, 18,949 new companies were registered in Slovakia, 13,328 of which were still in operation five years later.
The following chat shows the top 10 ranking European countries where newly founded businesses fare best.
Best countries for micro-enterprise survival
| Country | Micro enterprises formed in 2013 | Micro enterprises still in operation in 2018 | Five-year survival rate | |
| #1 | France | 46,549 | 35,060 | 75% |
| #2 | Sweden | 17,574 | 12,908 | 73% |
| #3 | Slovakia | 18,949 | 13,328 | 70% |
| #4 | Netherlands | 7,032 | 4,610 | 66% |
| #5 | Czechia | 8,680 | 5,533 | 64% |
| #6 | Luxembourg | 1,247 | 770 | 62% |
| #7 | Belgium | 5,905 | 3,527 | 60% |
| #7 | Portugal | 22,339 | 13,334 | 60% |
| #9 | Lithuania | 4,518 | 2,675 | 59% |
| #10 | Finland | 5,088 | 2,955 | 58% |
Denmark had the lowest five-year survival rate of just 42%. Over 8,000 micro-enterprises were registered in 2013, however, only 3,458 survived the five-year period.
Most popular countries to form a new European Company
The above countries where startups were found most likely to survive were not found to be the most common locations to register a new European company. Despite ranking in the top 5 worst countries for survival the United Kingdom and Turkey were the most common locations for entrepreneurs to form a new company.
The United Kingdom had the second-lowest micro-enterprise survival rate of 43%. However, the UK was the most common location to register a business. Of the 265,255 new companies formed in 2013. A whopping 114,590 micro-enterprises were still in operation five years later, twice as many as any other country. This is not surprising given the low cost of registering a new company in the UK. London and Manchester are extremely appealing areas for entrepreneurs looking to get started although these cities are somewhat expensive to hire staff and obtain office space.
Turkey ranked the 5th worst for micro-enterprise survival it was the second most popular city to register a new European company. Of the 123,799 new companies formed in Turkey in 2013, 56,395 were still in operation in 2018. Giving Turkey a micro-enterprise survival rate of 46%. Turkey has a strong economy, a liberal investment environment, and an ideal taxation regime. Turkey is strategically located to trade with many parts of the world and acts as a bridge between Europe, the Middle East, and Central Asia.
Worst ranked countries for micro-enterprise survival
| Country | Micro enterprises formed in 2013 | Micro enterprises still in operation in 2018 | Five-year survival rate | |
| #1 | Denmark | 8,213 | 3,458 | 42% |
| #2 | United Kingdom | 265,255 | 114,590 | 43% |
| #3 | Poland | 35,988 | 15,946 | 44% |
| #4 | Iceland | 929 | 420 | 45% |
| #5 | Turkey | 123,799 | 56,395 | 46% |
Please Note: Due to insufficient data across a five-year period Ireland, Greece, Cyprus, Malta, North Macedonia and Serbia had to be omitted from the findings in this article.
Micro, small or medium-sized enterprises (SMEs) stimulate a sense of entrepreneurship and innovation, helping to foster European competitiveness, economic growth and employment. Representing 99% of all businesses in the European Union (EU) these companies are defined as having less than 250 employees and an annual turnover of less than €50 million. SMEs are the backbone of the European economy creating 2/3 of job opportunities.
If you would like more information on how to register a new European company in any of the locations listed in this article please Contact Us or call+353 1 6874518, a member of our team would be happy to assist you.