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.
The European Union is full of opportunities for freelancers, offering a common market with rich cultural and environmental diversity and open borders. However, finding the right country within the EU can be a challenge, with numerous important factors to take into account.
I’ve found the 5 best EU countries for freelancers with some great benefits, including special visa programs, low costs of living, low taxes, and more. Find your favorite freelance-friendly EU country!
The 5 Best Freelancing Countries in the European Union
Portugal – Sunny Business Hub
|Capital & the largest city||Lisbon|
|Tax Rate For Freelancers||from 14.5% up to 48%|
|Capital Gains Tax Rate||28%|
|Cost of Living||$1050~/month|
|Doing Business 2020||39th/190|
Portugal’s mainland is located in Southwestern Europe. Its territory also includes the Atlantic archipelagos of the Azores and Madeira, two autonomous (and breathtaking!) regions with their own regional governments.
Spain is to its north and east, to the south and the west is the Atlantic Ocean, and to the west and southwest lie the aforementioned Azores as well as the Madeira Islands. While Portugal isn’t a large country, it offers a remarkable diversity of scenery, ranging from low-lying coasts and plains up to the Estrela Mountains, which rise to nearly 2,000 meters (6,500 feet). As a result, whether you’re a city travel fan or more of a nature lover, in Portugal you can do both.
Portugal performs well across a number of well-being dimensions relative to the other 41 countries in the Better Life Index. It outperforms the average in housing safety as well as in environmental quality.
Portugal currently also ranks quite highly in The Human Development Index (HDI) – in 2022 it placed 38th out of 186 countries included on the list. The HDI is a summary measure of average achievement in key dimensions of human development: a long and healthy life, knowledge, and decent living.
In 2020 Portugal came 39th overall on The World Bank’s Doing Business ranking and came 63rd in the “Starting a business” category out of 190 countries. Note that in September 2021, World Bank Group management announced the discontinuation of the Doing Business report following accusations of undue influence, irregularities, data manipulation, as well as unethical behavior by bank staff as a result of pressure from Chinese government figures. Although this isn’t believed to have affected most countries (including those on this list), it’s worth mentioning.
Freelancers (self-employed) in Portugal are required to report their earnings and pay both income tax and social security contributions. If you choose to operate your freelance business as a sole proprietor, you will be taxed on your income at progressive rates varying from 14.5% to 48% for 2022.
If you decide to operate as a company established in Portugal, as a rule, once your freelance business becomes profitable, it will be charged 21% corporation tax, one of the lowest in Europe. Read about sole proprietorship vs LLC and find out which business structure you should adopt as a freelancer.
As a freelancer, you’ll also need to be covered by mandatory insurance. This can be connected directly with your freelance business activity, such as liability insurance for damages caused to third parties during the provision of your services. Other obligatory insurances can be in regard to associated risks such as health insurance for illness and accidents that could happen during your freelance work.
You have to set up your freelance business and register it with local tax authorities in Portugal. Luckily, opening a bank account (especially in bigger cities) is fairly easy. In some cases, it’s also possible to open a bank account remotely without ever stepping foot in Portugal.
Portugal offers a high quality of life with lower costs of living compared to Western Europe. Even major cities like Porto and Lisbon are relatively cheap compared to similar-sized cities across the EU. This includes rent and property prices which are quite low compared to much of Western Europe.
If you’re an EU citizen wanting to move to Portugal, the process will be fairly easy. Remember you still have to apply for the registration certificate to be able to live in Portugal for more than 3 months, just like in other EU countries.
However, when moving to and starting a freelance business in Portugal as a non-EU citizen you may also benefit from various privileges, including the possibility of obtaining a Golden visa (Residence Permit for Investment) or Startup visa for entrepreneurs.
According to The Global Residence and Citizenship Programs report, the Golden Residence Permit Program in Portugal has been listed as the best residence-by-investment program in the world — for a consecutive third year running. The program achieved a score of 79 out of 100 after being assessed on following indicators: citizenship and financial requirements, taxation, compliance, processing time and quality of processing, quality of life, reputation, time to citizenship, total costs, and visa-free access.
Portugal is blooming and bigger business players are taking notice. Recently, UK-based fintech startup Revolut expanded into Portugal, launching a new customer operations center in Porto.
Estonia – E-State Of Mind
|Tax Rate For Freelancers||20%|
|Capital Gains Tax Rate||20%|
|Cost of Living||$1400~/month|
|Doing Business 2020||18th/190|
Estonia is one of the smallest countries located in northern Europe. Estonia is bordered to the north by the Gulf of Finland across from Finland, to the west by the Baltic Sea, to the south by Latvia, and to the east by Russia. The territory of Estonia consists of the mainland, the larger islands of Saaremaa and Hiiumaa, and over 2,000 other islands and islets on the eastern coast of the Baltic Sea.
More than half of Estonia’s territory is covered by forested land, almost a quarter is protected nature, and 45 percent of the forests are organic collection areas. This means you are never more than half an hour’s drive away from a forest or a lake! As a consequence, Estonia has the 4th best air quality in the world. Moreover, according to the European Food Safety Authority 2017 study, Estonia has the 2nd-cleanest food in Europe.
Estonia has a temperate and mild climate, characterized by warm summers (from June to August around 20-25°C) and fairly severe winters, with temperatures occasionally dipping below -20°C. Spring brings the sun back in March, while Autumn brings the rain from September to October.
The capital city Tallinn, along with Tartu, are the two biggest urban areas in Estonia. You’ll be delighted to hear that public transport is free for all of Tallinn’s registered residents!
The official language is Estonian. However, according to recent studies, Estonians are among the best English speakers in Europe.
Estonia has made impressive progress over the last decades in terms of improving the quality of life of its residents. In the Human Development Index 2022, Estonia ranked well and positioned 31st.
Estonia outperforms the average in education, environmental quality, safety, and social connections relative to 41 other countries in the Better Life Index. For example, 79% of Estonians declare that they feel safe walking alone at night, which is above the OECD average of 74%.
In the Doing Business Ranking 2020, Estonia ranked 18th overall and positioned 14th in the “Starting a business” category. An entrepreneurial-friendly environment makes Estonia a start-up hub, producing the most unicorns per capita in the world (Skype, Bolt, Wise, etc.).
Nowadays, Estonia is the world’s most digitally advanced society, benefiting from a hassle-free and modern approach to doing errands. Internet access has even been declared a human right in Estonia.
Estonia is also the first e-government in the world and offers “e-Residency” to foreigners from all over the world (some famous recipients of Estonian e-Residency include Angela Merkel and Barack Obama). You can sign your documents, get a medical prescription, register your business and do your taxes fully online. If you hate time-consuming bureaucracy, it’s a vast upgrade to many countries.
As a freelancer choosing Estonia as a location for your freelance business, you can register in the commercial register as a sole proprietor (FIE) or establish an Estonian company. The income tax rate for both private entrepreneurs and corporations is 20%. Interestingly, capital gains in Estonia are treated as ordinary income of a company and are taxed accordingly – in the case of selling your investments and earning profit.
Here you can download a quick-start Relocation Guide prepared by the International House of Estonia.
Bulgaria – Black Sea Hotspot
|Tax Rate For Freelancers||7,5%|
|Capital Gains Tax Rate||10%|
|Cost of Living||$850~/month|
|Doing Business 2020||61st/190|
Bulgaria is a country in Southeast Europe located on the eastern side of the Balkans. It is bordered by Romania to the north, Serbia and North Macedonia to the west, Greece, and Turkey to the south, and the Black Sea to the east.
Sofia, the capital, is the largest city and leads when it comes to both the economic and cultural life of the country. Plovdiv, one of the other major industrial and cultural centers, is located in the south-central region. Another city undoubtedly worth mentioning, especially if you love the sea, is Varna. If you are more into hiking in the mountains, you should consider Bansko.
Most of Bulgaria has a mild continental climate, which is bolstered by Mediterranean influences in the south of the country.
Bulgaria is a developing country, currently ranking 68th in the Human Development Index 2022. In 2020, Bulgaria ranked 61st overall on The World Bank’s Doing Business and came only 113th in the “Starting a business” category out of 190 countries.
When considering Bulgaria as your freelance base, you should keep in mind that it doesn’t currently employ the Euro as a national currency, instead using the Bulgarian lev.
Bulgaria is also not part of the Schengen area. It means that the time you spend in Bulgaria doesn’t count towards your 90-day in 180 days visa-free limit in the Schengen area.
Note that English proficiency is also quite low across Bulgaria as a whole. However, like in most other countries, English is quite widely spoken in the capital city of Sofia.
On the other hand, Bulgaria has some of the lowest corporate income tax rates in the entire EU at a flat 10% rate.
According to the Bulgarian tax law, freelancers are only taxed on 75% of their income and are entitled to statutory “recognized expenses” (making up the other 25% of their income). A flat 10% tax rate is then applied over the rest of the income. As a result, as a freelancer in Bulgaria, your tax rate is reduced to 7.5% of your income derived from freelancing. In the same way, only 75% of gross income is subject to social security contributions.
As a non-EU citizen, you can apply for a Bulgarian freelance visa which is issued to:
- non-EU individuals who work as freelancers;
- people who have a detailed business plan related to their activities.
You have to meet both of the above conditions.
Bulgaria is becoming increasingly popular with expats of different ages and also attracts new companies creating a good business environment.
Malta – Golden Nomad Land
|Tax Rate For Freelancers||from 0% up to 35%|
|Capital Gains Tax Rate||from 15% up to 35%|
|Cost of Living||$1400~/month|
|Doing Business 2020||88th/190|
Malta is an island country consisting of an archipelago located in the central Mediterranean Sea, and is considered part of Southern Europe. The country includes five islands: Malta (the largest), Comino, Gozo, and the uninhabited islets of Comminotto and Filfla.
Malta lies 80 km south of Sicily in Italy, 284 km east of Tunisia, and 333 km north of Libya. The official languages are Maltese and English. English as one of the official languages can be a huge advantage for you as an expat – no need to ask locals or hire professionals to be your translator!
Summers in Malta are hot and dry, autumns warm and sporadically wet, while winters are short and cool with adequate rainfall. More than three-quarters of the total annual rainfall falls between October and March, while June, July, and August are generally quite dry. One thing is sure: the world envies Malta’s climate!
In 2022, Malta ranked 23rd on the Human Development Index. In 2020 it placed 88th overall in the Doing Business Ranking and positioned 86th in the “Starting a business” category.
When freelancing while located in Malta, before you do anything, you have to register with “Jobs Plus” as either self-employed full-time or part-time, depending on the size of your freelance business. Fortunately, registering with Jobs Plus is fairly easy.
As a freelancer (self-employed) based in Malta, you are subject to progressive tax rates starting at 0% and gradually increasing to 15% then to 25%, and finally to 35% (beyond €60,000 in profits). Your overall income and marital status will be the deciding factor.
In the case of forming a company in Malta, your freelance business will be subject to income tax at a flat rate of 35%.
To attract nomads from around the world, Malta introduced the Nomad Residence Permit. To be able to apply for the Permit you have to be employed in a foreign country while legally residing in Malta. It means that to be eligible for the Permit you must prove you can work remotely and independent of location, using telecommunications technologies.
Malta has a considerably lower cost of living than the larger countries in central Europe, stunning real estate, and high quality of life with a Mediterranean lifestyle.
Cyprus – Cosmopolitan Expat Island
|Tax Rate For Freelancers||from 0% up to 35%|
|Capital Gains Tax Rate||20%|
|Cost of Living||$1600~/month|
|Doing Business 2020||54th/190|
Cyprus is the third-largest and third-most populous island country in the eastern Mediterranean Sea. It’s located south of Turkey, east of Greece, and west of Syria. Thanks to its location at the crossroad of three continents (Europe, Africa, and Asia), Cyprus is considered a regional transit hub between Europe and the Middle East. Its strategic location makes it a regional business hub and a desirable tourist destination.
Both Cyprus’s capital, Nicosia, and Limassol are the largest cities and key business centers. They offer an international society, competitive business environment, highly developed infrastructure, high-quality educational institutions, including international schooling from
kindergarten to university, and respected medical centers.
Cyprus has an intense Mediterranean climate. It means hot, dry summers (June to September) with +35°C average temperatures, and rainy winters (November to March), separated by short autumn and spring seasons (October and April to May). Winter’s average temperatures reach +15°C.
Currently, Cyprus isn’t part of the Schengen Zone. Although the process of joining the Schengen Zone has started, it isn’t known when it will end. This means that national visas issued by Cypriot authorities are valid for Cyprus only. They don’t permit you to enter other Schengen zone countries. On the other hand, if you’re a holder of a valid double/multiple entry Schengen Visa, you’re allowed to enter Cyprus without obtaining an additional short-stay visa.
The language of the majority is Greek and of the minority, Turkish. Regardless, English is widely spoken and understood, and used as the prevailing business language.
With its recently established “Vision 2035” plan, Cyprus aspires to be one of the best countries to live, work, and do business in, trying to attract more businesses and highly skilled individuals. One of the pillars of this strategy focuses on developing a thriving green economy that is innovative, resilient, and diversified, underpinned by the principles of digitalization.
In the Human Development Index 2022, Cyprus ranked 29th. Cyprus also ranks highly as one of the best places for lifestyle among major European cities and other competitive destinations, and as one of the safest countries in the world amongst countries with less than 5 million citizens.
In the Doing Business Ranking 2020, Cyprus rated 54th overall and placed 50th in the “Starting a business” category. It has a fairly transparent and efficient pro-business legal framework that is based on English common law.
The average cost of living in Cyprus is about 25% lower than other European business hubs.
If you choose to operate your freelance business as a sole proprietor your income up to $19,500 is tax-free. Tax rates for individuals including freelancers then start at 20% and rise progressively to 35% for your income over $60,000.
If you choose to operate as an LLC, your profits will be taxed at a flat rate of 12.5% (the corporate tax rate).
It’s also worth mentioning that (although a common misconception) Cyprus isn’t officially considered a tax haven anymore. Since the OECD declared Cyprus, along with Luxembourg and Seychelles, to be compliant with standards set forth by the Global Forum on Transparency and Exchange of Information for Tax Purposes, the country lost its tax haven status.
There’s one other EU country worth mentioning – the Czech Republic – which is already on our list of the top countries for freelancers worldwide. The Czech Republic offers streamlined freelance admin, low living costs, and a flat 15% tax rate is available if you earn under 79,000 USD. Any of your earnings above this level will be taxed at 23% with the rest remaining at 15%.
FAQs – Best EU Countries for Freelancers
Portugal is one of the best EU countries for freelancers (self-employed) thanks to its high quality of life, warm climate, relatively low costs of living, and low taxes for freelancers. Check out some other top EU countries for freelancers and choose your favorite!
Estonia is the easiest EU country to start a freelance business. Thanks to its e-Residency, e-signatures, minimal bureaucracy level, and fully online process, starting your new freelance venture is fast and easy.
In the Doing Business Ranking 2020, Estonia ranked 18th overall out of 190 countries. while in the “Starting a business” category it placed 14th in the world.
Starting a business in Estonia is also cheap and convenient. Estonia’s e-Business Register allows you to register your freelance business online in just minutes, without having to go to a notary or a government office. It’s a freelance-friendly e-State of mind!
Bulgaria is an EU country with the lowest taxes for freelancers at a 7.5% tax rate.
As a freelancer (self-employed) in Bulgaria, you will be only taxed on 75% of your income as you will be entitled to statutory “recognized expenses” which automatically make up 25% of the income. A flat 10% tax rate is then applied over the rest of your income. As a result, when operating your freelance business as a sole proprietor in Bulgaria, your tax rate is reduced to 7.5% of your income derived from freelance work.