Why Europe doesn't like New Businesses

Into Europe: Why Starting a Business in Europe Is So Hard

00:00 Introduction
1:03 Europeans aren't starting new businesses
3:32 [Sponsored Segment Odoo]
4:38 Why is starting a business so difficult in Europe?
5:14 Europe's welfare states and new businesses
7:26 Europeans consume less
9:03 Hiring workers is harder in Europe
10:33 Europe has less investment
13:27 European Regulation
15:57 Where are European Entrepreneurs going?
16:56 What are European countries doing to fix this?
18:53 What else is there that we can do Europe's shortcomings?
21:32 What do you think?

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[nicolasforgerit]

In Germany an SME also has to pay taxes upfront, in the beginning based on fantasy numbers and later based on the previous fiscal year. It's killing your liquidity and eventually your whole business in times of economic turmoil. It cost me tens of thousands of Euros discounting invoices to shorten payment terms afterwards. "But next year you'll get your money back." "Yeah thanks, then I won't need to pay upcoming month's rent anymore".

[MrPhiltri]

As a founder in Europe I scream in agony. Studying theoretical quantum physics was easier than figuring our and following all the weird and bizarre rules Europe has, especially if your clients are not just in your country of residence.

Its madness.

[noxit]

As a technology startup owner in Germany, I can personally confirm that most of the topics discussed are spot on. For my company, it took 7 months just to get a tax ID, which meant I couldn’t issue invoices or sell services, and I ended up losing all my clients before I even started. There’s also no real investment opportunity and we were asked to pay taxes upfront based on a made-up number—although we declined and it was accepted, we now pay upfront based on real numbers. On top of that, the high electricity prices make it impossible to compete with other countries. We’re constantly bombarded with additional tax letters and new regulations; every government agency seems to have its own set of rules. As a result, a lot of our time is spent not doing business and verifying ever-changing regulations! Another issue is the political climate, which is a complete disaster at the moment, adding further uncertainty to an already tough environment. If nothing changes in the mid-term, we might seriously consider moving out of the country.

[Parakeet-pkdl]

Don’t underestimate the killing effect of housing prices. As it stands now, my wife and I (both employed and reasonably well payed) can’t yet afford our own property. We will be able to however, in a few years.

Given that we’d like to have children, I’m not willing to take the risk of never being able to afford our own house. That fact alone, kills my drive to start my own business…

[CrownRider]

I started a business in the Netherlands 23 years ago. The bank denied a loan but family and friends supplied the necessary cash. I avoided hiring help due to all the energy that takes and started working with network entrepreneurs. Last year I sold the business.
I could have started up faster and could have hired many people. I still do not regret how it went. Before I started the business I worked at large corporations. I learned that I never wanted to have a large company.

[glennnielsen]

It is not only in relation to starting the company, but also when you are up and running.

[Xamufam]

Depends where you are sweden is extremely entrepreneurial. Sweden is built on family businesses, it has more family businesses per capita than anywhere in the world

Culture also matters to be more entrepreneurial

[danycashking]

Additionally and very relevant to always comparing the EU to the US, even more so than regulations, is homogeneity. The US is fairly similar linguistically and culturally all over. The EU is not that homogenous, expanding your Dutch business into Poland means a different currency, culture, language, and bureaucratic system. Expanding across borders is not easy or cheap, expanding EU-wide requires a lot of money to be spent just on translation of your documents, UIs and marketing material into that many languages and adapting it to that many individual consumer cultures. French people are pickier and more demanding with their food than the Dutch who prefer simplicity and predictability. Germans are far behind in technology use in everyday life than Dutch even though they border each other. Lithuania is notorious for needing to pay out bribes to get anything done. Having this many differences is very difficult to keep up with at a smaller scale and no amount of "cutting red tape" changes these things.

[michaandruszkiewicz]

The data about Poland might be somewhat distorted as regular employees choose/are forced to work on a B2B basis due to much lower taxation. As a result, almost everyone opens up a "business" to avoid the tax progression on a regular contract. This also makes you easier to fire, you don't get the regular contract benefits, etc.

[SapereAude]

Bureaucracy can be streamlined, like in Estonia. That should be the way forward. After we reach that, only then should we talk about cutting the welfare state.

[boccobadz]

Poland's stats are sus - most of those "businesses" are just software developers setting up sole proprietorship LLC for tax reasons and still work like they're full-time employed but officially it counts as B2B.

[DeniseMilaTeresa]

judgmentcallpodcast covers this. Starting business in Europe difficult.

[glennnielsen]

In Denmark it is also the case, as I understand it is in Italy, that corporation tax is paid in advance based on an estimate. Denmark has the advantage that the labor market is liberal, where it is relatively easy to fire and hire. It is the whole package that must be evaluated. Switzerland is an interesting case. Extremely democratic, extremely successful and low taxes.

[javiervll]

Here in Spain 🇪🇸, opening a new business is very difficult due to the high amount of bureaucracy and paperwork that must be completed, the taxes that must be paid and the difficulties in hiring qualified workers. In fact, our large companies were founded many years ago (Inditex-ZARA, Telefónica, Banco Santander, BBVA, Iberdrola...) and most of them obtain their main profits abroad, such as in Latin America 🇦🇷🇨🇴🇲🇽🇧🇷, the USA 🇺🇸 or the United Kingdom 🇬🇧. I think that Spain should not depend so much on tourism and should learn more from the USA or China 🇨🇳 when it comes to starting up and doing business.

[noelcoenraad]

TWO videos in one week?! Into Europe team putting in that work 😤 keep up the great work

[Robis]

In Baltics and Scandinavia they do ;) The problem is old Europe and their hubris. If you look at Baltics you see enormous progress, start ups, some ideas implemented better than in USA. The biggest problem is France and Germany with their above all attitude and overregulation and total ignorance that the world has changed and that they are just two small nations.

[julioalmeida]

So true. Im Portuguese, tried to do something in Europe a few years back, and getting clients as a startup was super difficult.

Joined a startup in the US, not only was the amount of VC backing enormous without any clients, got clients and solid revenue in just 3 months after funding.

It breaks my heart

[Henners]

I'm a self-employed Brit who runs a business that would probably benefit from a second person working in it, but I just can't be bothered to deal with all the paperwork I assume that'd include.

[igorkorzun]

Sorry, but is this some kind of European problem I'm too Estonian to understand?

I had my sole trader company registered in 5 minutes, and we set the world record for registering an LLC - 15 minutes from filing application to being entered into the business register

[Victorceme]

The EU should look into Australia or Sweden on how to combine a US style business focus while keeping the welfare state