Starting a business in Europe has probably never been easier. Digitalization and regulatory standardization have helped make the continent more friendlier to entrepreneurs.
Yet key differences between countries do still remain. Estonia lets you create a company 100% online in under 24 hours. In France, despite admirable efforts, the process can still take several weeks and eat up time and cash early on.
These aren’t minor details. Speed, administrative efficiency, and access to financing are essential competitive advantages for SMEs. You need to launch quickly, sign your first contracts, and protect cash flow.
This article compares some of the most business-friendly European countries for SMEs, focusing on three essential criteria: ease of incorporation, access to credit, and B2B payment terms.
Key takeaways
- Speed matters: In Estonia or Denmark, creating and financing a company takes under 10 days. In France, it often takes 3-6 weeks.
- Credit access varies widely: 27% of French SMEs struggle to access financing, compared to just 10-12% in the Netherlands or Estonia.
- Short payment terms strengthen cash flow: In the most business-friendly countries, invoices are paid in 25–30 days on average. In France, it’s 62 days.
Doing Business ranking: where does France stand?
Until 2021, the World Bank’s Doing Business Index ranked countries on 10 business-environment indicators, including:
- Time required to start a business
- Access to credit
- Taxation
- Investor protection
- Contract enforcement
The index was suspended in 2021. But it remains a useful reference point for organizations like the OECD, IMF, and Bpifrance. According to Doing Business 2020:
- France ranked 32nd worldwide for ease of doing business
- It ranked 37th for ease of starting a business, with a theoretical 4–7 business-day delay
- In practice, a 2023 Banque de France study puts real-world delays at 3–6 weeks, once banking, social security, and VAT steps are included
Digitalization efforts exist (including the INPI one-stop shop), but France is still slowed by:
- Multiple administrative counterparts (URSSAF, tax authorities, banks, INSEE, etc.)
- Long bank onboarding times (up to 3 weeks for a business account)
- A perception of complexity. Only 8% of French adults say they would start a business, compared with 45% in the Netherlands (Eurobarometer 2024)
Europe’s business-friendliest countries
Using Doing Business 2020, complemented with data from Bpifrance, Eurostat, and Eurobarometer:
France is improving but still lags behind Nordic and Baltic countries, which benefit from deep administrative efficiency and strong digital systems.
Note: In 2024, the World Bank launched Business Ready (B-READY), an updated successor to Doing Business. France does not appear in the first edition. Among European countries, leaders include:
- Regulatory framework: Portugal, Slovakia, Bulgaria, Romania, Greece
- Public services: Estonia, Croatia, Portugal, Slovakia, Greece
- Operational efficiency: Estonia, North Macedonia, Bulgaria, Slovakia
Access to credit: a key measure of economic maturity
Creating a company is one step. Financing it quickly and securely is another. And the differences between European countries here are also significant.
Credit access is one of the clearest indicators of whether a country is truly SME-friendly. Approval rates, timelines, diversity of lenders, fintech presence, and guarantee requirements all directly affect a company’s ability to grow.
What the numbers show
According to the SAFE survey (ECB & European Commission, 2023):
- 27% of French SMEs report difficulty obtaining bank credit
- The European average is 19%
- In Estonia, the Netherlands, and Denmark, the rate falls to 12% or below
Decision timelines differ sharply:
- France: 3–6 weeks for a professional credit decision
- Estonia, Denmark: often under 10 days, thanks to automated and digital processes
Non-bank financing (fintech lenders, B2B platforms, factoring, short-term credit) remains low in France at ~12%, versus 25%+ in the Netherlands or Denmark (OECD SME Finance Scoreboard 2023).
SME credit access comparison
Why this matters for SMEs
For an SME, the speed of financing can determine whether it grows or stagnates:
- A loan approved after 6 weeks may arrive too late to seize an opportunity
- Poorly explained refusals slow hiring and investment
- Limited non-bank options penalize young, innovative, or atypical businesses
A business-friendly environment supports not just incorporation but fast, flexible financing.
B2B payment terms: the real test of economic fluidity
When evaluating a business environment, payment behavior is just as important as taxation or incorporation speed.
Predictable payment timelines mean:
- Reduced cash-flow pressure
- Fewer financing needs
- Better visibility for hiring and investment
Chronic delays can suffocate even profitable SMEs by starving them of liquidity.
Payment delays across Europe
According to the European Commission’s 2024 study on payment delays:
- France: 62 days on average
- Germany: 41 days
- Denmark: 66 days
- Portugal: 56 days
Additional insights:
- 59% of SMEs say late payments limit their ability to invest or innovate
- 21 out of 27 EU countries saw worsening payment delays in 2023
- B2B delays deteriorated more sharply than public-sector delays
The hidden cost of intercompany credit
Europe processes over 18 billion invoices per year—about 500 per second. Late payments lead to:
- SMEs functioning as involuntary lenders
- increased working capital requirements
- follow-on delays in payroll, suppliers, and taxes
The European Commission estimates over 27 million hours are lost annually due to late payments—the equivalent of €5.8 billion in lost productivity.
How payment delays compare between countries
Here’s a summary comparison of average payment times between businesses:
Key lessons
High-performing countries share the same traits: simple rules, digital tools, and strict enforcement.
In France, despite legal limits (60 days or 45 days end-of-month), late payments remain frequent, especially in industrial companies, construction, and B2B service providers.
And seen through another lens, many French SMEs end up financing their clients’ cash flow.
What France can learn from business-friendly countries
Several European countries already show what a frictionless business environment looks like: fast creation, rapid financing, and strict payment discipline.
No need to reinvent the wheel—just adapt what works.
Estonia: Europe’s administrative startup
For 20 years, Estonia has turned public administration into a digital platform:
- Company registration online in under 24 hours
- e-residency that allows foreign founders to incorporate remotely
- Unified interface for taxes, banking, accounting, and reporting
- Mandatory, standardized e-invoicing through a national network
- Near-zero payment delays thanks to real-time data checks
Why it works: The system is designed to eliminate friction. Entrepreneur time is treated as a national asset.
Denmark: Nordic efficiency and long-term stability
Denmark offers a predictable, rules-driven business environment:
- One-day company creation
- Stable tax rules with low regulatory volatility
- Banks and public actors (like Vækstfonden) actively supporting SMEs
- Strict enforcement of payment rules
- Strong public–private financing ecosystem
Why it works: SMEs operate in a stable, transparent, reliable context.
The Netherlands: pragmatism and openness
The Netherlands balances regulatory clarity with fast access to financing:
- Company creation in 3–5 days
- SME-friendly tax system
- Competitive banking and fintech ecosystem
- Fast credit decisions, even for young or atypical companies
- Strong international business culture
Why it works: The approach puts business needs ahead of administrative convenience.
What France could implement immediately
Build your SME faster, with smarter financing
In certain European countries, fast incorporation, rapid financing, and on-time payments are already standard. France is moving in that direction, but we’re still behind.
The good news: you don’t need to relocate to Tallinn to operate with Estonian- or Danish-level agility. With the right tools, partners, and organization, French SMEs can manage cash flow just as effectively.
Defacto believes in real-time, frictionless treasury operations connected to your accounting and banking tools.
If you take cash management seriously, Defacto can help you finance faster, smarter, and with less friction.
FAQ: Starting a business in Europe
What is the best European country to start a business in 2025?
That depends, of course. Administratively, Estonia remains the most advanced thanks to its fully digital system and e-residency program. For financing and stability, Denmark and the Netherlands are also excellent choices.
Why is France slower for business creation?
The legal incorporation step is fast, but post-creation steps (bank account, social security, VAT registration) remain long and fragmented. Progress is underway but integration is still limited.
Is it easier to get SME financing abroad?
In several countries (Estonia, the Netherlands, Finland), professional credit processes are more digitalized and faster. In France, decision times remain long and guarantee requirements are often high.
Modern providers like Defacto bridge this gap, providing all the same benefits of these more advanced systems here in France.
