The European Union offers a strong common market, open borders, long-term political stability, the possibility of competitive tax systems, and plenty more. In fact, there are numerous benefits to starting your freelance business in the European Union.
Yet, bureaucracy levels, tax rates, and business environments can vary significantly by country. Costs and standard of living often vary greatly even between cities within the same country.
I researched the 5 best European cities for freelancers, self-employed people, digital nomads, and remote workers offering some outstanding benefits, including lower taxes and living costs, visa programs, and more. Find your top European city for freelancers!
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The 5 Best Cities for Digital Nomads & Freelancers in the European Union
Portimão, Portugal
City of Golden Sands
| Country | Portugal |
| Currency | Euro (€) |
| Tax Rate For Freelancers | From 14.5% up to 48% |
| Capital Gains Tax Rate | 28% |
| Corporate Income Tax Rate | 21% |
| Cost of Living | $1500~/month |
General Overview
Portimão is the second-most-populous city and one of the main commercial hubs in the Algarve region of southern Portugal. If you’re searching for the ultimate Portuguese beach life with some nice benefits for self-employed people and business owners, keep on reading.
Taxes
As a self-employed tax resident of Portugal, you’ll be taxed on your worldwide income at progressive rates varying from 14.5% to 48% for 2023. If you decide to operate as a company registered in Portugal, a flat corporate income tax rate of 21% will apply.
Find out more about sole proprietorship vs LLC and work out which business structure you should adopt as a freelancer.
You may also consider applying for Portugal’s non-habitual resident status (NHR). NHR status in Portugal provides special tax conditions for entrepreneurs, individuals, professionals with high-added value, and pensioners.
One of the requirements to apply for NHR status is that you must have the right to reside in Portugal. This right comes through EU citizenship if you’re an EU national. If you’re a non-EU citizen, you can acquire it through programs such as the Golden Visa program.
To qualify as NHR you can’t have been a Portuguese tax resident in the previous 5 years. However, you must be a tax resident in Portugal in a given year.
One of the biggest benefits of the NHR status is that you can be exempt from almost all taxes on foreign sources of income, including professional income, rental income, capital gains, interest, dividends, as well as other investment income, provided that certain conditions are met.
If you practice certain professions or engage in certain self-employment known as “high value-added activities” you can benefit from a 20% flat tax rate on Portuguese income (instead of progressive rates from 14.5% up to 48%).
If you’re accepted, you can enjoy your NHR status with special income tax treatment for up to 10 years from the date of application.
Visas
If you’re a non-EU citizen, you can consider applying for a Portuguese digital nomad visa. To apply for the visa, you’re required to have a minimum monthly income of around $3,350 per month. A visa can be valid for up to 1 year.
Note that if you stay in the country for more than 183 days in a year, you might be considered a tax resident in Portugal.
Lifestyle
The city offers a continuously growing expat community, along with the warmest weather and some of the best sandy beaches in Portugal. Portimão is very sunny, averaging over 3,000 hours of sunshine a year. For comparison, in London, there are on average around 1,500 hours. It has a Mediterranean climate with hot, dry summers and mild but quite wet winters moderated by the Atlantic Ocean.
Portimão is packed with restaurants famous for their fresh fish, hip cafés, trendy bars, and a few historic sites.
Portimão also offers a lower cost of living when compared to Lisbon and other European cities. Prices generally, including rent, are 34.6% lower in Portimao than in Lisbon.
The city has a bus network for getting around the town and beach resorts. Trains, both inner-city and long-distance, offer connections throughout the country. Faro International Airport is a 45-minute drive from the city center making it easy to travel around Europe and outside.
Close by, there is one of the most popular beaches in the Algarve, Rocha, and there are many others nearby. If you’re generally interested in beach life, check out our list of the best beach towns for digital nomads and freelancers.
Overall, Portugal provides a stable political and social environment at an affordable cost. As a result, Portugal is also among our 5 best EU countries for freelancers.
Prague, Czech Republic
Flat Tax Metropolis
| Country | Czech Republic |
| Currency | Koruna (Kč) |
| Tax Rate For Freelancers | Monthly flat tax starting from $285~ possible (otherwise 15% up to 23%) |
| Capital Gains Tax Rate | 15% |
| Corporate Income Tax Rate | 19% |
| Cost of Living | $1600~/month |
General Overview
Prague is the capital of the Czech Republic. It’s a political, cultural, and economic hub in central Europe, mixing its historical roots with modern charm.
The local currency is the Czech koruna (CZK), since the Czech Republic is one of the 7 EU countries where the official currency isn’t the Euro.
Taxes
The country boasts one of the lowest tax rates for individuals and companies in the EU. As of 2021, as an individual self-employed in the Czech Republic, you’ll be taxed as follows:
- Gross income up to the threshold for 2023 of $88,480 (CZK 1,935,552) is subject to a 15% rate,
- Only gross income exceeding $88,480 is subject to a rate of 23%.
However, if you’re a self-employed individual with an annual income below $91,360 (CZK 2 million), you can register for an optional lump-sum tax. It’s also known also as the flat tax regime (“paušální daně”). Note that as of 2023 your annual income has to be below CZK 2 million to quality, an increase from the previous CZK 1 million.
In 2023, the minimum flat tax amount in the Czech Republic is $285 (CZK 6,209) monthly which covers health insurance, social insurance, and income tax.
At the same time, three bands have also been introduced within the flat tax regime. Which bracket is applicable to you will depend on the amount and nature of income from your self-employment. This depends on your annual income and deductible expenses.
Please be aware that the flat tax for self-employed people in the Czech Republic has undergone several changes with effect from January 2023.
It’s only possible to apply for the flat tax regime until the 10th of January for the given calendar year. For 2023, it was necessary to submit a notification of entry into the scheme to the local tax office by the 10th of January 2023.
When taking on the flat tax regime, there is no access to any extra relief, discounts, or bonuses. This means the flat-rate scheme may not pay off for everyone.
The corporate income tax rate in the Czech Republic is 19%. As a rule, capital gains are generally taxed at a rate of 15% (specific exemptions exist).
One of the most crucial things to do to operate as a freelancer in the Czech Republic is to obtain the Živnostenský list (Trade Licence). You can run a business only on the basis of a valid business license in Czechia.
Visas
In general, citizens of EU countries don’t need any permits when relocating to the Czech Republic, while third-country nationals must obtain work permits.
If you’re a self-employed non-EU citizen, you can apply for the Czech visa for freelancers commonly called a Zivno visa. The first visa is valid for 1 year. Along with other requirements to apply for a Czech visa for freelancers, you also have to prove the availability of financial resources of $7,185 (156,500 CZK).
Non-EU citizens are also required to register with the Foreign Police Department within 3 days after their arrival in the Czech Republic.
Lifestyle
The Czech Republic ranks 18th among the happiest countries in the world according to the World Happiness Report 2022. The Report is an annual survey of the UN that evaluates 146 countries around the world on the basis of key factors such as gross domestic product, life expectancy, level of corruption, social support, and personal freedom.
Prague itself is rich in history and culture, and its architecture is a significant part of that. From Gothic cathedrals to Art Nouveau buildings, there’s something to admire around pretty much every corner.
Thanks to its central location, you can easily travel around Europe from Prague. You can choose from trains, buses, or affordable, direct, and relatively short flights.
The infrastructure in the city, including Prague’s public transport, is at a very high level. According to many rankings, it rates as 5th best in the world. Getting around the city is easy and affordable. If you prefer to walk or cycle, Prague is also a very walkable city with plenty of bike lanes.
The international Václav Havel Airport in Prague is located 30 minutes drive from downtown. As a result, the city is the perfect base for comfortable living with global reach. The airport offers dozens of flights a day to destinations within and outside of Europe.
Prague has seen a significant increase in the number of expats in recent years. It owes it in particular to its safety, fair costs of living, and flourishing job market in the creative and technology industries.
You can find an apartment in the center of Prague for around 1000 euros per month, while in more remote areas you can find housing for much less. Living expenses are much lower than in the rest of Western Europe.
Importantly, you can survive even if you don’t speak a word of Czech. According to the English Proficiency Index (EPI) 2022, the Czech Republic ranked 23rd out of 111 countries in Europe with a general ‘high proficiency’ score.
In general, the Czech Republic is one of the top countries for freelancers in the world due to its flat tax for freelancers, vibrant culture, high quality of life, and relatively low cost of living.
Tallinn, Estonia
Green E-capital of Europe
| Country | Estonia |
| Currency | Euro (€) |
| Tax Rate For Freelancers | 20% |
| Capital Gains Tax Rate | 20% |
| Corporate Income Tax Rate | 20% |
| Cost of Living | $1400~/month |
General Overview
Tallinn is the capital of Estonia, and the most cosmopolitan and well-connected place in the whole country. Estonia is a part of the economically stable Nordic area located on a dynamic trading route between East and West.
Tallinn welcomes foreign investors and international companies. The Estonian legal system is based on the continental European model. Importantly, foreign and domestic investments in Estonia are treated equally under the law.
Taxes
The city offers a very business-friendly environment supported by a straightforward and clear legal framework, and a stable flat-rate tax system. In general, the income tax rate for both private entrepreneurs and corporations is 20%. Reinvested profit isn’t subjected to corporate income tax.
When it comes to personal taxes, sole proprietors in Estonia (FIE) must pay a social tax rate of 33% on their net (not gross) business income.
This is because salaries are also taxed with social tax. On the other hand, as a rule, dividends aren’t taxed with social tax.
Even if you decide to start a company in Estonia and pay yourself dividends, your role in the company should be analyzed in detail. The role you carry out as an active employee/director or passive shareholder must be compensated and taxed appropriately. Opting for dividends to save on taxes isn’t allowed.
The above is a generalization and exceptions apply depending on the specifics of your business. Always consult with a qualified tax professional specializing in cross-border matters and international business regarding your specific situation. As taxation is often one of the most crucial aspects when choosing a location for your freelance business, read more here about the basics of Estonian taxes.
Visas
Especially if you’re a non-EU citizen, you may consider applying for the Estonian digital nomad visa. The visa provides a temporary basis to live and work remotely in Estonia for up to 1 year.
To be eligible for the digital nomad visa in Estonia, you must prove that you can work location-independently using telecommunications technologies. You also have to prove that you fit under any of the 3 following categories:
- You work for an employer that is registered in a foreign country (i.e. not in Estonia) and you have a contract of work with that employer,
- You conduct the business activity for a company that is registered in a foreign country and of which you are a partner/shareholder, or
- You offer services mostly to clients, whose permanent establishments are in a foreign country, and with whom you have contracts.
Your income must meet the minimum threshold of €4,500 gross during the 6 months preceding the application.
There are no eligibility restrictions based on your country of origin or the sector in which you work or provide services.
The conditions of tax residency in Estonia are very similar to most countries in the world. As a rule, you’re a resident of Estonia if you’re staying in Estonia for at least 183 days over the course of a period of 12 consecutive calendar months.
In the case of also holding a digital nomad visa, if you stay in Estonia for more than 183 days in a consecutive 12-month period, you will be considered an Estonian tax resident.
Lifestyle
The expat community has more than doubled in the past few years with the majority of people living in Tallinn. The city is known as a convenient location for the development centers of international businesses and start-ups. Fully online government services bring technology-based businesses to Tallinn.
Tallinn has become the “European green capital 2023” elected by the European Commission. It’s worth mentioning that since 2013 public transport has been free for those who are registered residents of Tallinn.
On the other hand, make sure you enjoy dark, cold, and long winters! You’re likely to experience winters from late November until late March. Temperatures range from mild plus degrees to as low as -30°C. However, you might appreciate warming up in an Estonian sauna. 2023 might be your year to give it a go – in fact, 2023 is the officially-declared Year of the Sauna in Estonia!
As a country, Estonia also made it to our best EU countries for freelancers list as a particularly tech-savvy location. It has a well-developed digital infrastructure making it a great place for remote work and streamlined business and tax administration!
Split, Croatia
Dalmatian Port Town
| Country | Croatia |
| Currency | Euro (€) |
| Tax Rate For Freelancers | From 20% up to 30% |
| Capital Gains Tax Rate | 10% |
| Corporate Income Tax Rate | From 10% up to 18% |
| Cost of Living | $1200~/month |
General Overview
Split is the second-largest city in Croatia bordered by the Adriatic Sea and famous for its divine beaches. Croatia itself borders Slovenia to the north, Hungary, and Serbia to the east, and Bosnia, Herzegovina, and Montenegro to the south.
On 1 January 2023, Croatia adopted the euro – the 2nd most-used global currency.
Taxes
If you’re planning a more long-term stay in Croatia as a self-employed person, you’ll be taxed on your income at the following progressive rates:
- 20% for income up to $50,997.33 (€47,780.28~) per year which amounts to $4,250.08 (€3,981.69~) per month, and
- 30% for income above $50,997.33 per year (above $4,250.08~ per month).
If you decide to open a company in Croatia, the following corporate income tax rates will apply:
- 10% for revenues up to $1,062,164.04 (€995,421.06) generated in the tax period, and
- 18% for revenues generated in the tax period equal to or greater than $1,062,164.04.
Visas
If you’re a non-EU/EEA/Swiss citizen, you might consider applying for a digital nomad visa in Croatia. To be eligible for the visa, you have to prove a minimum income of $2,530 (€2,365.45) per month. The visa is valid for up to 1 year. It’s available only for non-EEA nationals working remotely for a foreign employer or their own foreign company.
Under Croatian digital nomad visa status, the income from your foreign employer or your foreign self-employment will be exempt from tax in Croatia for up to 1 year of your visa validity.
Unlike many other European digital nomad visas, if you’re granted a Croatian digital nomad visa, your income earned from the activities based on which you acquired the visa will be tax-exempt in Croatia for the entire length of your stay. Note that only the income earned from your foreign employment/your foreign self-employment will be tax exempt in Croatia.
Lifestyle
Split offers a great quality of life with a mild Mediterranean climate, exquisite beaches, and rich cultural heritage. The city’s hot, moderately dry summers and mild, wet winters give you an opportunity to enjoy summertime by the sea and all the joys they bring. You can appreciate winters that are not harsh and will still leave you with enough sunny days for outdoor activities.
All the above can help you take advantage of the city’s relaxed pace, and achieve and maintain a better work-life balance.
Particularly during summer, the city becomes a tourist hot spot. As a result, many locals speak at least a little English, plus some other languages like German, Spanish, and French.
Since the tourism sector is highly developed, the infrastructure is also quite advanced. Split has an established public network of buses, as well as a local ferry service to nearby islands each day.
Split is surrounded by spectacular natural beauty, including the Adriatic Sea and the Dinaric Alps. All this presents you with plenty of opportunities to explore the outdoors after work and on days off. And the splendid beaches in Split are a quick walk away!
Valletta, Malta
Island of Sun
| Country | Malta |
| Currency | Euro (€) |
| Tax Rate For Freelancers | From 0% up to 35% |
| Capital Gains Tax Rate | From 15% up to 35% |
| Corporate Income Tax Rate | 35% |
| Cost of Living | $1400~/month |
General Overview
Valletta is the capital of Malta and the European Union’s smallest capital city. Located right in the middle of the Mediterranean, Malta is an island country with a diverse culture, a rich history, eclectic attractions, and perpetual sunshine.
With English as one of the official languages, you don’t have to worry about the communication barrier while setting up your life and business in Valletta.
Taxes
As a self-employed person in Malta, you’re subject to progressive tax rates starting at 0% and gradually increasing to 15%, then 25%, and finally to 35% beyond $65,000 (€60,000) in profits. Your overall income and marital status will be the deciding factor.
In the case of forming a company in Malta, the standard corporate income tax rate amounts to 35%.
If you’re a non-EU national, you might consider applying for the Global Residence Programme which grants you a special tax status. One of the tax benefits is a flat rate of 15% tax applied to foreign income sent to Malta.
Visas
Non-EU citizens can apply for the Nomad Residence Permit in Malta. To be able to apply for the permit you have to have a minimum income of $2,890 (€2,700) per month, be employed, self-employed, or have a company in a foreign country while legally residing in Malta. The permit is valid for up to 1 year.
To be eligible for the Nomad Residence Permit in Malta you must prove you can work or provide services remotely and independent of location, using telecommunications technologies.
Lifestyle
Thanks to Valletta’s central location, there’s great access to the rest of the island. While living in Valletta you can find a mix of deep culture, nightlife, and history. In fact, the entire city of Valletta is classified as a UNESCO World Heritage site.
The city is the central hub of the island where all that matters happens and every national event is celebrated. Additionally, by ferries, in just 10 minutes, you can get from Valletta to other cities such as Sliema, Birgu, Bormla, and Senglea.
Valletta is the southernmost capital in Europe sitting next to the Mediterranean. It offers mild and warm weather around the year.
Many expats are attracted not only by the natural beauty but also by the various booming industries. Gaming, financial services, and software development industries in Malta are thriving. They’re also tempted by tax breaks for high-net-worth individuals.
Additionally, Malta is well-connected by air with Europe and Africa, and by the sea with Sicily. The island provides many swimming spots including golden sandy beaches, red sands, rocky cliffs, blue lagoons, and inland seas.
Malta’s idyllic weather, high level of safety, quality healthcare, and spectacular sea views are some of the main reasons why Malta is also seen as one of the best EU countries for freelancers.
Tax planning is crucial for freelancers and digital entrepreneurs. However, tax advantages shouldn’t be the only factor you consider when relocating to another country to live and run a business or work there. Before taking any action, you should consult a qualified tax professional specializing in cross-border matters and international business.
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