The Benefits of Starting Your Freelance Business in the European Union

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Disclaimer: Please note that this article contains general legal information and doesn’t contain legal or tax advice, and isn’t intended to constitute legal or tax advice.

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The European Union’s market has much to offer and isn’t only meant for EU citizens, but is also available for international freelancers and entrepreneurs who desire to benefit from the business-oriented EU laws and policies.

In this article, you’ll discover the advantages of starting your freelance business in one of the European Union countries, whether you’re an EU citizen or a third-country national (non-EU citizen).

Quick Menu

• What Is the European Union?
• What Are the Benefits of Freelancing in the European Union?
• Single Market
• Freedom of Residence
• Freedom to Do Business
• Freedom to Travel
• Possibility to Obtain EU Citizenship
• Access to Services
• Roam Like at Home
• No Extra Fees for the Use of Cards
• No Price Discrimination
• Driving Licence Recognition
• One Shared Currency & The 2nd Most-Used Global Currency
• Avoidance of Double Taxation
• Legal Security and Protection
• Policies and Initiatives
• FAQ – Benefits of Freelancing in the European Union

What Is the European Union?

The European Union (EU) is a unique multinational political initiative that currently includes 27 countries in different stages of development while sharing some crucial values. The number of EU members may even increase, since there are 7 other recognized candidates for membership of the EU (such as Montenegro or Turkey).

However, thanks to Brexit, the United Kingdom isn’t a part of the EU anymore since 31 January 2020.

As a bloc of countries, the EU is the 2^nd largest economy in the world after the US. 

Currently, the following 27 countries are part of the EU:

What Are the Benefits of Freelancing in the European Union?

EU members are part of a single European market (i.e. a free-trade zone), and the free movement of people, goods, services, and money throughout the EU. The EU consists of countries offering the stability of the political and regulatory regimes, good quality of life, great diversity, and culture.

As a freelancer based in one of the EU countries, you can also benefit from these advantages! See how you can harness the power of these unified nations to propel your freelance business forward.

Single Market

As I mentioned, all of the EU countries take part in a single EU internal market, assisted by the removal of many technical, legal, and bureaucratic barriers.

Through the free movement of goods, services, capital, and persons, all EU citizens and their family members have a right to live, move, study, work, trade, do business and retire freely in any of the EU countries.

Freedom of Residence

As an EU citizen, you can live in another EU country for up to three months without any requirements other than holding a valid identity card or passport. In order to stay for more than three months, you have to meet some conditions depending on your status in the particular EU country (for example as a self-employed person) and you might be required to comply with administrative formalities.

Moreover, if you’re an EU citizen, you have the right to permanent residence in another EU country after legally residing there continuously for five years.

Freedom to Do Business

As an EU citizen, you are also entitled to:

• Set up your own freelance business (including as a sole trader) in any EU country, Iceland, Norway, or Liechtenstein.
• Set up a subsidiary branch of an existing EU-based business that is already registered in an EU country.

Freedom to Travel

Most EU countries (23 out of 27), except for Ireland, Bulgaria, Cyprus, and Romania, are also a part of the border-free Schengen Area which guarantees free movement to EU citizens, along with non-EU nationals legally present in the EU.

However, Bulgaria, Cyprus, and Romania are obligated to join the area in the future. Croatia joined the Schengen Area on 1 January 2023.

Countries that aren’t members of the EU, like Norway, Iceland, Switzerland, and Lichtenstein are also part of the Schengen zone which is the largest free travel area in the world.

COVID-19 INFO: Please note, that due to the COVID-19 pandemic, entry restrictions, mandatory testing, and quarantine regulations in the EU and the Schengen Area may apply.

Possibility to Obtain EU Citizenship

As stated above thanks to an EU passport, you can live and work in any EU country as well as travel visa-free to most countries globally.

To obtain European citizenship, you must meet several criteria, including obtaining it:

• By birth in the territory of a country (jus soli) – the most common condition is for the parents to reside in the country for a certain period of time before the child’s birth.
• By descent (jus sanguinis) – if you have a family member (your ancestor – usually, a parent) who can pass on EU citizenship to you.
  • Obtaining EU citizenship by descent is one of the easiest and cheapest ways to get an EU passport.
• By naturalization – if you lived and worked for a minimum of five years in an EU country (or more depending on the country) to qualify for EU citizenship.
  • Most EU countries’ citizenship laws include provisions requiring naturalization applicants to prove that they possess and/or present:
    • Certain knowledge (such as language ability, knowledge of the country), and/or
    • Evidence of appropriate behavior (criminal and employment records), and/or
    • Dispositions and commitments (willingness to integrate, loyalty).
  • Citizenship granted in one EU member state gives you access to rights resulting from EU citizenship.
  • Any person holding the nationality of any EU country is automatically an EU citizen.
• By investment – if you have enough money to invest in an EU country and receive EU citizenship.
  • Many of the EU member states have Citizenship by Investment (CBI) and Residency by Investment (RBI) Schemes in place to attract foreign investment from non-EU nationals. They’re also known as “golden passports” and “golden visas”.
    • The European golden passport scheme allows you to acquire new citizenship and the passport of an EU country based on payment or investment, and in the absence of any association with the naturalizing country.
    • Obtaining a European golden visa allows third-country nationals, subject to certain conditions, to obtain a residence permit to live in an EU country in return for investment. In some cases, the investor may not be even required to live full-time in the country in which they’ve invested (specific conditions depend on the country).

Access to Services

Free movement of services in the EU not only means that you can provide your services freely within the internal market but also have easy access to them yourself. Secondly, many rules regarding services in the EU countries are harmonized at the EU level. Remember to make good use of these benefits!

Roam Like at Home

Scared of using mobile data, ordering Uber, or checking Google Maps when you’re outside of your home country on vacation, on a business trip, or just traveling around while working remotely? Especially as a freelancer, you want online access abroad without paying crazy amounts of money for it.

If you entered into an agreement for mobile phone services in an EU country, you don’t have to pay any additional charges to use your mobile phone when you travel to another EU country as long as you spend more time at home than abroad in a given time period.

This means your calls, text messages, and mobile data use will be charged at your domestic rates. While using your phone in the EU you’ll be charged the same price as for calls, texts, and data within your home country.

The same rule applies to any calls or text messages you receive while you’re in another EU country. You won’t be charged extra to receive calls or texts while roaming, even if the person calling or messaging you is using a different service provider.

You don’t have to set anything up or activate anything to be able to roam in the EU at your domestic prices – your operator has to automatically give you access.

No Extra Fees for the Use of Cards

When using your credit or debit card anywhere in the EU, you can’t be charged extra.

However, this rule doesn’t apply to American Express/Diners Club cards and business or corporate credit cards, where your employer is billed instead of you. While using these cards, you can still be charged a fee but the fee can’t be more than what it actually costs to process your payment.

No Price Discrimination

As an EU citizen or resident, you can’t be charged a higher price when purchasing products and services in the EU because of your nationality or country of residence.

When buying goods online without cross-border delivery, you must have access to the same prices and special offers as buyers living in that EU country. This includes when you collect a product from a trader or shop yourself, or when you buy services provided at the trader’s premises (booking a hotel, renting a car, etc.).

You can’t be charged more (apart from actual delivery costs, if applicable) or prevented from buying a product or service just because you live in another EU country.

Driving Licence Recognition

As a rule, if you move to another EU country, your driving license obtained in your home country in the EU will be valid in the country where you moved. In most cases, you don’t have to exchange it for a local one. 

One Shared Currency & The 2nd Most-Used Global Currency

Currently, the Euro (€) is the official currency of 19 out of 27 EU countries. This means 19 EU countries have replaced their national currencies with the Euro. It’s currently the second most-used currency worldwide.

In all of these 19 EU countries, you’ll pay your bills, purchase products, pay for services, and get paid without barriers.

No need to carry the cost of currency exchange fees, or waste your time figuring out the fastest way to exchange money and send it between your accounts (especially when it’s the weekend). No more constant currency conversions and fluctuations!

The following 19 EU countries use the Euro:

There are still 7 EU countries that haven’t adopted the Euro, although they may join the Euro area once they’ve met the necessary conditions. Countries where the official currency isn’t the Euro:

• Bulgaria,
• Czechia,
• Hungary,
• Poland,
• Romania,
• Sweden,
• Denmark.

*On 1 January 2023 Croatia became a member of the Euro area, adopted the Euro, and dropped its previous currency (the Croatian kuna).

Nevertheless, many freelancers still earn in USD even when based in the EU. If it’s also your case, you may consider using banking services like Revolut, which uses the interbank exchange rate to give you a good and instant currency exchange. Revolut doesn’t add any markup on the exchange rate for most currencies on weekdays (though it does at the weekend).

Avoidance of Double Taxation

Most EU countries have concluded tax treaties with the other Member States as well as with third countries. This means that even in cross-border situations (when relocating or working abroad) if both countries have entered into an agreement for the avoidance of double taxation, you’ll pay tax on the same income only in one of them.

In general, if you live and work in a country that isn’t your home country for more than 6 months in a year, you’ll likely become a tax resident there. Most probably your new home nation will be able to tax your total income – i.e. both income earned in your home country and income you earn elsewhere within and outside the EU.

If you have strong family and economic ties with your home country, you can still be considered a tax resident there, even if you spend less than 6 months a year there. This is why if you’ve moved from one country to another it’s always recommended to notify your home country’s tax authorities to prevent problems in the future.

Legal Security and Protection

EU law creates individual rights, such as personal, civic, political, economic, and social rights. These are directly enforceable in the national courts in the member states, between individuals as well as between the individual and each EU state. An example of this is the right to the protection of your data, as well as to guarantee and return goods you’ve bought.

The EU also offers diplomatic and consular protection for every EU citizen who isn’t represented by their own EU country in the territory of a third country. In this case, you’re entitled to request help from the local embassy or consulate of any other EU Member State present in the third country you’re staying in.

These are the things that we don’t pay attention to when everything is going smoothly, but when in need, EU citizenship is a powerful force to have on your side.

Policies and Initiatives

The EU as a whole, through its policies and initiatives, encourages small business owners and freelancers to run their businesses in the EU. EU support programs can offer you and your freelance business easier access to funding, help to connect with potential business partners, and support with taking advantage of free trade opportunities and overcoming cultural and linguistic obstacles.

Many EU initiatives promote harmonized and more effective legislation regarding operating business, and reduction in the administrative burdens on your business.

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Being based in the EU as a freelancer has its own pros and cons. Depending on the EU country, you may benefit from the effectiveness of the government, political stability, and freelance-friendly, high-quality regulations.

On the other hand, in some EU countries, you might face a lot of bureaucracy, misleading and ever-changing laws, and high social security contributions with poor standard services provided in return.

Finding the best-suited EU country for your freelance business can be tough, with many crucial factors to consider.

We’ve researched the 5 best EU countries for freelancers – benefit from the opportunities the EU provides and find the best freelance-friendly EU country for you!

Costs and standard of living can also differ significantly – even between cities within the same country. For this reason, we’ve researched the 5 best European cities for digital nomads, freelancers, self-employed people, and remote workers based on some unique benefits, including lower taxes and living costs, quality of life, and more. Discover your top European city for freelancers!

FAQ – Benefits of Freelancing in the European Union