A closer look at Europe’s low corporate tax jurisdictions (Sponsored)

Taxation is one of the key factors investors consider when deciding where to establish a business. In this context, Europe stands out for offering a range of jurisdictions with competitive corporate tax rates.

At the same time, tax rates are only part of the equation. Investors also look closely at regulatory stability, compliance requirements, transparency, and access to international markets. Many European countries combine these elements with the advantages of the EU single market, creating an attractive environment for both entrepreneurs and established companies. Below, we share a list of some of the most attractive European jurisdictions from a fiscal point of view

Cyprus has a new 15% tax rate

Without a doubt, corporate taxation is one of the main reasons investors from all over the world are attracted to Cyprus, as the 15% rate is one of the lowest on the continent. The rate was recently increased from the previous 12.5% to align the country’s financial policy with the Organisation for Economic Co-operation and Development Pillar Two requirements. The legislative changes are broader and include other modifications; however, it is worth noting that Cyprus remains quite appealing from a tax perspective.

Another reason foreign investors choose Cyprus is that it is an English-speaking country. As a result, the conditions on how to incorporate a company in Cyprus are easy to understand. Furthermore, there are plenty of English-speaking specialised service providers, such as BridgeWest Cyprus, which help make communication more effective.

Ireland, which has one of the lowest corporate taxes in Europe

Another appealing country from a taxation point of view is Ireland. The government imposes a 12.5% corporate levy on domestic companies, while offering excellent infrastructure for large enterprises, especially considering that many tech giants have their European headquarters in Ireland.

The favourable tax system is complemented by a simple and fast business setup process. To find more details on forming an Irish company, investors can consult BridgeWest Ireland, an agency specialising in company registration services.

Bulgaria, the champion of low corporate taxes in Europe

Bulgaria stands out as one of the most competitive jurisdictions in Europe from a corporate tax perspective. Businesses operating in the country are subject to a flat 10% tax on profits, making it one of the lowest rates within the EU and particularly attractive for cost-conscious entrepreneurs.

The country also offers relatively low operational costs and access to the EU single market. From 2026 onwards, Bulgaria is set to adopt the euro as its official currency, a move expected to facilitate cross-border trade further and reduce transaction-related complexities for international businesses.

Malta, unique through its taxation system for companies

At first glance, Malta’s standard corporate tax rate of 35% appears high compared to other European jurisdictions. However, this figure does not reflect the country’s effective tax burden for many businesses due to its shareholder refund system.

Under this system, shareholders may claim a refund of up to 6/7 of the tax paid by the company upon dividend distribution, reducing the effective tax rate to approximately 5%. Combined with Malta’s EU membership, robust regulatory framework, and extensive network of double taxation treaties, the incorporation procedure in Malta is more appealing than in some countries with lower nominal corporate tax rates.

Hungary, another country with a tax rate below 10%

Hungary offers one of the lowest corporate tax rates in Europe, applying a flat 9% levy on company profits. This straightforward tax structure has positioned the country as an attractive destination for businesses seeking fiscal efficiency within the EU.

In addition to taxation, Hungary’s central European location provides strong logistical advantages. Companies based in Hungary benefit from proximity to key EU markets, particularly Germany, as well as a well-developed transport infrastructure and a skilled labour force.

Romania, one of the EU countries with low corporate taxes

Romania applies a 16% corporate tax rate on business profits, placing it among the more competitive EU jurisdictions from a fiscal standpoint. The country also offers specific tax regimes and incentives for certain sectors, including IT and research-driven activities.

Beyond taxation, Romania is attractive due to its large and well-educated workforce, particularly in technology and engineering fields. Competitive labour costs and growing digital infrastructure have further strengthened its position as a destination for international companies and outsourcing operations.

Non-EU countries with low taxes for businesses

Several non-EU European countries also offer highly competitive corporate tax rates, making them worth considering despite not being members of the Union. Bosnia and Herzegovina applies a 10% corporate tax rate, while Albania and Montenegro both impose a 15% levy on company profits. North Macedonia also offers a 10% corporate tax rate.

These jurisdictions often appeal to investors seeking low taxation combined with emerging market opportunities. Notably, North Macedonia and Montenegro hold EU candidate status, which may increase their long-term attractiveness for businesses looking to establish an early presence ahead of potential EU accession.

Europe remains a strong option for business incorporation from a taxation perspective. While corporate tax rates play a crucial role, factors such as regulatory stability, market access, and workforce availability also significantly influence the overall attractiveness of each jurisdiction.

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