Which European Countries Are Riskier for Entrepreneurs?

According to Eurostat, there were over 33 million active businesses in the European Union in 2023. That year, 3.5 million new companies were established, while 2.8 million closed down — translating to a 10.5% business birth rate and an 8.5% death rate. In other words, more companies were created than dissolved across the EU.

Business creation was particularly low in Austria (6.2%), while Malta, Portugal, Estonia, and France recorded rates above 14%.The lowest business birth rates — under 9% — were seen in Austria, Denmark, Italy, Sweden, Belgium, Germany, and Greece.

The highest business death rate was observed in Estonia (27.5%), followed by Ireland, Bulgaria, and Lithuania, each exceeding 15%.The lowest closure rate was in Hungary (2.6%), with Greece, the Netherlands, Austria, and Croatia also reporting some of the lowest figures.

In 8 out of 31 countries, the death rate exceeded the birth rate. Estonia recorded the largest negative gap — 13.2 percentage points — meaning nearly twice as many companies closed (45,389) as opened (23,544). Bulgaria followed with a 5.8-point gap, and Ireland with 4.8 points.

According to Prof. Jun Du of Aston Business School, “The difference between business birth and death rates is a fundamental indicator of economic vitality, reflecting how effectively economies renew themselves through creative destruction.”

Countries with negative gaps tend to face intertwined challenges:– Decline of traditional industries with insufficient emergence of new sectors,– Regulatory and administrative barriers to entry,– Limited access to financing,– Aging demographics weakening entrepreneurial drive,– Market concentration that allows incumbents to block new entrants.

By contrast, Malta recorded the highest positive gap at 10.5 points, meaning 2.5 times more businesses opened than closed (9,669 vs. 3,726). Croatia, Hungary, Latvia, Norway, Portugal, Romania, and Greece also showed positive differences above 5 points.

In absolute numbers, Poland saw the largest negative difference, with 26,732 more closures than openings, while France had the largest positive margin, with 164,420 more businesses opened than closed.

Eurostat noted that the 2023 data reflects a period marked by the economic effects of Russia’s war in Ukraine, the resulting energy crisis, the withdrawal of pandemic-era support, and the normalization of fiscal policy.

Source: Euronews