After all the global scandals in the past years, Europe is still proving to be a corporate growth and development powerhouse that attracts companies from all over the world. The continent is made up of 44 nations, each with its own culture, economic standing, workforce market needs, and infrastructure. Expanding into European markets may provide your firm with a plethora of benefits. In this article, we will discuss the top five European markets that are ideal for hiring and expansion. where you should consider growing or hiring. We will also explain why expanding your business or hiring in certain countries is a sensible decision.
It is important to develop a criteria that can present your company's reasons to enter or disregard the market. With the support of HR consultants and Business development experts at EuroDev, the following criteria are advised;
- Economy: A strong economy is essential for businesses to grow and succeed. This includes factors such as GDP, economic stability, and growth potential.
- Workforce: Access to a skilled and diverse workforce is crucial for businesses. This includes factors such as the availability of talent, education levels, language proficiency, labor costs, and complexities in labor laws.
- Business Environment: A positive business environment is important for companies looking to expand. This includes factors such as regulations, tax policies, and ease of doing business.
- Market Demand: Strong market demand is crucial for companies looking to expand. This includes factors such as consumer spending, purchasing power, and market size.
- Infrastructure: A well-developed infrastructure is essential for businesses to operate efficiently. This includes factors such as transportation, communications, and access to resources.
Germany (Population of 82.3million)
Germany is the largest economy in Europe and the fourth largest in the world, attracting startups, relocations, and company growth projects. As of 2021, the economy’s GDP was recorded at around $ 4.2 trillion, representing 1.91% of the world’s economy. Its financial hubs Berlin, Munich, and Frankfurt are considered ideal for small and mid-sized enterprises and big industries with a highly talented and strong workforce.
Germany is strategically positioned in the EU, boarding 9 countries within the EU. Its geographic position has made it the world's third-largest exporter and the third-largest importer of goods. Germany is also characterized by high levels of innovation in the automobile, machinery, chemical goods, electronic products, electrical equipment, pharmaceuticals, transport equipment, basic metals, and food industries.
Across Germany, business growth and expansion are encouraged by different funding programs to boost business growth. For instance, the European regional development fund is made available to companies starting, expanding, or relocating in Germany.
Even though Germany has the lowest unemployment rate within the EU-27 at 3.0%, it still provides 1.32m talented, knowledgeable, and strong people, that are ready to work. Considering good education and vigorous training, Germans are some of the highest skilled workers in the world. It is important to know that in 2008, Germany introduced significant legal reforms to the labor market, which made it easy for them to hire workers within Germany.
United Kingdom (Population of 67.5million)
The UK remains one of the world's largest economies with an estimated GDP of $ 3.13 trillion. It has strong links with Australia, USA, and Canada, which all share a similar culture. The UK is a major trading nation and home to some of the world’s largest multinational corporations. The lack of language barriers is considered a great aspect when expanding that will save you on translation and localization costs.
The UK corporate tax rate is comparatively low at 19%. Once you understand UK double taxation agreements and value-added taxations, it is easy to calculate taxation in the UK. Nevertheless, you may want to consider working with a company that is knowledgeable in local tax laws, especially at the beginning of your expansion. This will ensure everything gets off at a smooth start.
Also, the UK benefits from the world's leading universities as well as access to the top talent pool. According to the global city, the UK is home to 2.3 million specialists in the professional services and financial sector. Most of Europe’s qualified software developers and AI experts are located in London. London has the most skilled talent pool in the world, with 58.5% of its workforce educated to at least a degree level. The BCG global talent survey ranked London as the most appealing location for global workers, meaning that the city is a hub for international talent.
It is important for companies to understand that entering the UK market does not guarantee access to the European market. However as mentioned above, the internal economy provides benefits to companies that want an easy market access
Netherlands (Population of 17.53 million)
With a GDP of $ 1.013 trillion, a motivating business environment, the position of an advanced logistics hub, and dedication to technological advancements, the Dutch market provides a good place for businesses looking to enter the European market and continue their developments. The Netherlands has a strategically strong geographical location, ranking 11th in the GDP per capita. Its location has made it a major logistics hub in Europe, with a refined transportation network, including ports, airports, and highways.
One of the elements that make the Netherlands an attractive market is the availability of a 30% ruling, that allows foreign workers to have 30% of their salary tax-free. This allows companies to attract skilled foreign workers. Further, as an employer, you can facilitate lower gross salaries with employees by 30%. Also for employees insured in the Netherlands under employee insurance schemes, the employer is not required to deduct employee insurance contributions from the amount of the 30% tax-free allowance.
Given their geographic locations, the Netherlands provides employers with a multilingual workforce. Almost 90% of the Dutch nationals are fluent in English and Germany, a very important asset considering that these are primary languages in Europe. A large percentage of the workforce also speaks French and Spanish which are widely spoken languages due to the influence of the neighboring countries. When considering hiring in the Netherlands, employers need to understand that the average hourly cost of hiring people in the Netherlands is similar to other competitive European markets. For instance, employees working 35 hours in the Netherlands receive the highest hourly wage of 25.9 euros per hour in 2020. In 2021, the maximum wage in the mining sector was 38 euros per hour. In addition to these, several indirect costs are attached to hiring in the Netherlands.
Switzerland (Population of 8.7million)
According to WEF reports, Switzerland is the most competitive country in the world, hence making it one of the most attractive European markets. It is surrounded by Europe’s major economies; Germany, France, Italy, and Austria. It is ranked in the top 5 for having great infrastructure of highways, roads, and public transportation that makes movement easy. The country’s competitive environment has made it home to major tech and pharmaceutical companies. Switzerland provides a business-friendly environment and regulations. The government is adapting to new business models, as it has done in the fintech companies by reducing market entry barriers. Because of this, Switzerland is becoming known not only as the financial center but also as a hub for cryptocurrencies and blockchain technologies.
Even though Switzerland is the most expensive country for hiring, it still ranks high for business growth. A higher standard of living means a higher consumption rate that is highly beneficial for businesses.
Given that tax is one of the major concerns for companies who are planning to hire and expand into any European market, it is essential to understand that the Swiss government is ahead with the double taxation agreements (DTA) Switzerland has signed double taxation treaties with 60 countries, most of these are western industrial countries. The country has the lowest VAT rate of 8% in Europe. Medical Devices and associations are exempted from paying VAT hence making the environment suitable for businesses operating in the healthcare industry.
It is important that companies planning to enter the swiss market, carry out extensive research in the 26 cantons of Switzerland. As all these might have different tax laws and benefits for entering the market.
France (Population of 67.9million)
France is the third largest economy in Europe, with a buying force of 67.9 million domestic consumers. Since Macron’s re-election in April 2022, he has been keeping at introducing laws and legislation that will encourage and support business expansion into the country. His government implemented a tax cut for employees and employers and also secured investments from big tech companies like Facebook and google.
Despite having one of the highest labor costs for employees, France is listed in the top 10 nations in terms of hourly productivity. Its employees are known for being hardworking, productive, and well-educated. France has the largest yearly proportion of engineering graduates. This is approved by the leading engineering colleges in France, including Universite Paris Saclay, Universite Grenoble Alpes (UGA), Institut National Polytechnique de Grenoble, and Sorbonne Universite. The proportion of persons over the age of 25 with higher education degrees has consistently increased, reaching 81.5 percent in 2021. As a result, the French workforce is brimming with highly trained experts and independent contractors that may add value to your organization.
The French public transportation system makes it very accessible. Domestic and international travel is both dependable and well-developed, giving locals and foreigners great capacity to travel and export commodities whenever needed. France boasts the second-largest rail network in Europe, the third-largest road network in Europe, extremely busy seaports, and 18 major international airports. France's infrastructure allows firms to ship, import, and export with ease.
EuroDev, established in 1996 with offices in The Netherlands, has a single, defined purpose to help mid-sized North American companies expand their business in Europe. We have created a proven, successful business development model and since our founding, have partnered with over 500 companies to help them define and meet their European business goals. Services provided include Sales Outsourcing, HR Outsourcing, and Digital Marketing.
Disclaimer: While we strive to provide accurate and timely information, please note that HR policies and regulations can change frequently. It is recommended that you seek guidance from our HR consultants to ensure that the data presented here is current and accurate.