The statistics are telling: From 2013 to 2022, the number of Americans in the Netherlands grew from about 15,500 to 24,000; in Portugal, it tripled to nearly 10,000; and in Spain, it increased from around 20,000 to 34,000. Moderate to steady growth was observed in countries like France, Germany, and the Nordics. Britain alone saw an increase from 137,000 resident Americans in 2013 to an estimated 166,000 in 2021. With various European countries offering incentives ranging from streamlined visa processes to tax breaks, the continent has become not just a market but an expansive field of opportunity for American entrepreneurs.
Your options as an American relocating to Europe
When looking to move to the European Union, American professionals typically encounter two distinct pathways to secure work and residence permits.
- The first is through employment with an established firm, where Highly Skilled Migrant (HSM) visas are commonly used. This can be a These visas are designed to attract top-tier talent and generally streamline the process for qualified applicants working in specialized fields. Several countries also hand out visas tied to labor shortages (i.e. types of work the national population does not offer enough of).
- The second pathway is for entrepreneurs, startups, and self-employed individuals. In contrast to the HSM route, these visas usually require additional steps such as submitting a business plan, demonstrating financial stability, or even meeting language proficiency criteria. The process is more complex but offers the flexibility to shape your own professional journey. Some entrepreneurs take a hybrid approach by setting up a company in the EU and then hiring themselves, thereby accessing some benefits available to employees.
In this article, we’ll explore how American entrepreneurs can establish their businesses in the EU and secure a work and residence permit. We will compare the relevant countries and their various programs and incentives.
Remember that obtaining a residence permit in one individual EU country, doesn’t automatically grant the right to work and live throughout the entire EU. Each EU member state has its own immigration policies, and a residence permit from one country is generally not valid for working or long-term residence in another EU country. However, Italy is part of the Schengen Area, so a residence permit does allow for visa-free travel to other Schengen countries for short visits, typically up to 90 days within a 180-day period. For longer stays or to work in another EU country, you would usually need to apply for a separate residence permit in that country. If you hold a long-term residence permit from an EU member state, you could have more rights under the EU Long-Term Residents Directive (Ireland and Denmark are not part of this agreement), but even then, you’d typically have to meet specific conditions to move and work in another EU country.
- Between 2013 and 2022, the American population in the Netherlands grew from approximately 15,500 to 24,000.
- The Netherlands is #1 in the EF English Proficiency Index
- Most prominent advantages of the Netherlands for American citizens are the Dutch American Friendship treaty (DAFT) and the 30%-ruling.
Residence in the Netherlands
If you’re a U.S. citizen planning to set up a business and relocate to the Netherlands, you have a few visa options. The Dutch-American Friendship Treaty (DAFT) offers an easier path with less red tape. The Start-up Visa is geared towards innovative entrepreneurs but requires a strong business plan and mentorship. The Self-Employed Visa is another option but has strict income and business criteria. Each route has its own set of requirements and benefits, so choose the one that aligns best with your business goals.
Official route: start-up visa or self-employed visa (slow and expensive)
As a non-EU entrepreneur relocating to the Netherlands, the official way in would be by applying for a start-up visa or the self-employed visa. However, securing these visas is known to be quite challenging. The process can even take a full year and and is quite expensive.
Alternative: Set up LLC + become sponsor (or EOR / payroll)
Therefore, the alternative is to set up a LLC (BV) in the Netherlands and employ yourself in this company. Establishing the company itself is straightforward, but obtaining a residence/work permit as a director working for your own company is more complicated. The process is not only very lengthy (1 year is not uncommon), it is also quite expensive.
In order to be allowed to live and work for your own company in the Netherlands, this new BV (which would be your new employer) needs to have Recognised Sponsor status from the Dutch Immigration Authorities (IND) before it can sponsor any Knowledge Migrants. It costs just under 3000 Euros, takes around 4 months and your company would be thoroughly assessed by the Enterprise Agency for financial stability. Most applications do not meet the criteria and are unlikely to succeed. The company needs to be in one of the sectors that the authorities (through an organization called RVO) wants NL to develop and grow (mostly tech sectors) and then the company would have to be approved by the IND (again with RVO analysis) to become a Recognised Sponsor before you could hire yourself or any other (non EU) employee from abroad.
The easiest way into the Netherlands for an employee would be to have a payroll company employ the person, and then second him/her to the new BV. That will cost around 700 Euros per month (excluding initial costs), on top of the Highly Skilled Migrant level salary that would have to be paid. In both cases, the employee would have to qualify as a Highly Skilled Migrant, so they’d have to think carefully about what the job would entail. Complicated, but no Immigration Department makes it easy for foreign nationals unless it’s by a controlled and approved route.
DAFT (highest success rate)
The easiest route for an American entrepreneur to set up a business and move to the Netherlands could be the DAFT (Dutch-American Friendship Treaty) agreement. This allows U.S. citizens to start, own, and operate a business in the Netherlands with minimal red tape. It’s generally easier to secure than other visa types like the start-up or self-employed visas. However, you’ll need a solid business plan and sufficient funds to support yourself.
Initially, the permit is valid for 2 years, allowing the U.S. citizen to establish or buy a business in a Dutch city and operate as a self-employed entrepreneur. If the business proves successful, the visa can be extended for an additional three years. After a total of five years, the visa holder may be eligible to apply for permanent residency, provided specific conditions are met.
The most important requirement is a solid business plan. The main conditions for the DAFT application are that you invest EUR 4500 (meaning you need to have this available during the first year of your stay. This amount is typically added as nominal share capital in case of a LLC/BV.
We can help you submit the DAFT application. Contact us if you have any questions.
30%-ruling – This ruling is one of the main reasons US entrepreneurs opt for the Netherlands. It only works with a LLC/BV where you are employed by the company. If you expect your business to make more than approximately €60,000 a year and you’ve never lived or worked in the Netherlands before, we suggest setting up a BV. You’ll probably be eligible for the Dutch 30% ruling, which effectively makes 30% of your income tax-free.
While not in the EU anymore since Brexit, the UK can be an attractive option for English-speaking entrepreneurs. However, keep in mind that long-term residency (or even citizenship) in the UK does not give you the right to live and work in EU countries.
Residence in the UK
The Innovator Founder visa (formerly UK Innovator Visa) requires endorsement from a recognized UK body. You need to speak English fluently and be able to prove that you have enough personal savings to support yourself while you’re in the UK. Most of all, your business must be innovative, so something completely new. This requirement can be quite hard to meet.
Under an Innovator Founder visa, you can:
- Establish one or multiple businesses
- Serve in your business as either a director or as a self-employed partner
- Pursue skilled work outside your business, such as roles listed under Skilled Worker eligible occupations or jobs requiring at least a level 3 qualification
- Bring eligible family members, including your partner and children, as dependants
- Travel internationally and return to the UK
- Seek permanent UK residency, also referred to as ‘indefinite leave to remain,’ after living in the UK for 3 years and fulfilling other eligibility criteria.
Incentives in the UK
Business Asset Disposal Relief means you’ll pay tax at 10% on all gains on qualifying assets, for example when selling (parts of) your business.
Residence in Ireland
Incentives in Ireland
Ireland’s Immigrant Investor Programme (IIP) gave right of residence to those immigrants investing EUR 1 million into the Irish economy. It was scrapped in 2023.
There are several tax incentives to attract people to start their own business in Ireland. Among them are the ‘Start your own Business Relief’ and a few others. One of the more attractive ones is SURE. This is a tax relief for new entrepreneurs offering a refund of past Income Tax. Eligibility extends to employees, the unemployed, and recently redundant individuals. You must start a new business, have primarily PAYE income in the last four years, work full-time in the new company, invest cash in new shares, and keep those shares for at least four years. Specific conditions apply.
Residency in Portugal
Investor Visa – Portugal: Known as the Golden Visa, it allows residence through a substantial investment, such as real estate purchase of €500,000 or more. After five years, you can apply for permanent residence. It is also called Article 90A residence permit for investment purposes. It is unsure whether or not this visa schema will survive, due to pressure from the EU.
In Portugal a residential visa requires income of just 150% of the national minimum wage, or about €1,100 ($1,190) a month.
Incentives in Portugal
Foreigners can pay a 10% flat tax on “passive income”, such as investments or a pension.
Italy is targeting wealthy individuals by offering a flat annual income tax rate of €100,000, irrespective of their actual earnings. Under this scheme, qualifying individuals pay a flat annual tax of €100,000 on their global income, irrespective of how much they actually earn. This means that no matter how high the income, the tax liability will remain fixed at €100,000 per year.
- Global Income: The flat tax covers not just income earned within Italy but worldwide income as well.
- Duration: This regime is usually applicable for a maximum of 15 years, although there can be conditions for renewing or extending it.
- Family Members: Additional family members can also be added to this tax scheme, but they are subject to a lower flat rate, usually €25,000 per person per year.
- Exclusions: Certain types of income, like capital gains from substantial shareholdings during the first five years, are excluded and will be taxed under the normal tax rates.
- Opt-Out: It is usually possible to exclude income from specific countries from the flat tax regime, opting to pay taxes on that income in the respective countries instead.
- Eligibility: To qualify, individuals must not have been tax residents in Italy for at least nine of the previous ten years before becoming a tax resident under this regime.
- Formalities: To take advantage of this scheme, certain formalities and filings are required, often necessitating professional tax advice.
- Renouncement: Individuals can renounce the regime before the 15-year period is over if they wish, usually without incurring penalties.
Relocation to Sweden as a US entrepreneur
There are no specific self-employed or startup visas in Sweden. Typically, the routes into Sweden for non-EU nationals include work permits, which often require a job offer from a Swedish employer, or permits for starting or running a business, which require a detailed business plan and financial proof that you can sustain yourself and your business.
Sweden’s ‘Expert tax relief’
In Sweden, key foreign staff can benefit from a significant income tax relief during their initial three years of employment. Qualified employees are taxed on just 75% of their income, with the remaining 25% being tax-exempt. This tax advantage extends to all forms of compensation, including housing allowances, living expenses, stock options, and other special benefits provided by the employer. This tax relief is the most comparable to the Dutch 30% tax ruling.
Additional (tax) Benefits:
- Sweden’s Holding Company Framework: Sweden ranks as one of Europe’s most attractive locations for holding companies, offering tax exemptions on capital gains and dividends along with other competitive tax policies.
- Exemptions on Business-Related Gains: Capital gains and dividends from business-oriented shares are typically tax-free.
- International Scope: These exemptions can apply to shares in, or dividends from, both Swedish and foreign companies.
- Declining Corporate Tax Rate: The effective tax rate for corporations is on a downward trend.
- Interest Deductions: Interest costs are generally tax-deductible.
- No Thin-Capitalization Policies: Sweden doesn’t enforce thin-capitalization rules.
- No Withholding Tax on Interest: Interest payments are not subject to withholding tax.
- No Capital Duties: There are no stamp duties or capital charges on share capital.
- Broad Double Tax Treaty Network: Sweden has an extensive range of double taxation treaties.
Norway doesn’t have specific incentives targeted solely at U.S. entrepreneurs or self-employed individuals. This means that getting a residence permit based on your own business in Norway is unlikely to succeed. You will most likely need to start with finding employment in Norway first.
- Startup Denmark Scheme.
- Positive list for skilled labor.
- Entrepreneurial tax scheme.
- Funding through Innovation Fund Denmark.
- Startup permit required.
- Business plan and €100,000 investment.
- Government grants for innovation.
- R&D tax incentives.
Relocation to France for US entepreneurs
France Talent Passport: Designed for highly-skilled professionals and allows for self-employment. Requires proving ‘economic interest’ to France, which can be substantial business revenue or job creation.
Incentives to move to France
The “Beckham Law,” officially known as the Spanish Tax Regime for Inbound Expatriates was designed to make Spain more attractive for high-earning foreign professionals by offering tax advantages. Under this regime, foreign workers who move to Spain to work for a Spanish employer pay taxes only on their Spanish income at a flat rate of 24%, rather than their worldwide income.
The Beckham Law doesn’t in itself grant the right of residence. To live and work in Spain, you still have to secure the appropriate visa and residence permit separately.
Relocation & incentives
The Swiss lump-sum taxation scheme, also known as “forfait fiscal,” is a special taxation regime for certain wealthy foreign individuals who take up residence in Switzerland but do not engage in any gainful activity there. The taxation is not based on income or assets but on a negotiated lump sum that typically relates to the taxpayer’s living expenses in Switzerland.
The Swiss lump sum taxation system allows cantonal (regional) authorities to issue a residence permit based on fiscal interest. This system is primarily designed to attract wealthy foreign nationals to reside in Switzerland. The cantonal authorities negotiate a lump sum tax agreement with the individual, typically based on their living expenses. Once this is agreed upon, the individual pays that amount annually in lieu of standard income and wealth taxes. If the authorities determine that the individual’s fiscal contribution will benefit the canton, they may grant a residence permit. This is a mutually beneficial arrangement: the individual enjoys a more favorable tax situation, while the canton gains a new, financially beneficial resident.
Other notable incentives:
Estonia e-Residency: While not a visa or residency program, it allows global entrepreneurs to manage an EU-based business online. Ideal for digital nomads and online businesses.
“digital nomad” visas for tech freelancers