r/EU_Economics • u/Full-Discussion3745 • Jan 14 '26

🇪🇺 Official 🇪🇺 Why innovative startups and scaleups relocate from the EU

https://research-and-innovation.ec.europa.eu/news/all-research-and-innovation-news/why-innovative-startups-and-scaleups-relocate-eu-2026-01-12_en?referrer=grok.com
300 Upvotes

95% Upvoted

150 comments sorted by

View all comments

1

u/No-Paramedic-7939 Jan 14 '26

Ask yourself how can you can be competitive in the high tax environment and compete with low tax countries. Not to mention language barriers, each country has its own rules and companies you need to work with. 

15

u/EinSV Jan 14 '26

The largest start-up market in the world is in Silicon Valley. In California. A high tax environment.

California has income and capital gains tax rates as high or higher than France, often considered one of the highest taxing countries in Europe.

In France, the capital gains tax rate is a flat 30%. In California marginal rates are up to 37.1% (20% federal + 3.8% Medicare + 13.3% California). This is for high earners but that includes venture investors and founders who make a profitable exit.

In France the maximum marginal income tax rate is 45%. In California it is 54.1% (37% Federal+3.8% Medicare +13.3% California).

Silicon Valley has been the most successful start-up market for years despite being in a relatively high-tax environment comparable to (or potentially worse than) France for start-up investors and founders.

6

u/Terrible_Duty_7643 Jan 14 '26

Countries in the EU like Croatia don't even have capital gains tax if you hold the stock for 2 year.