Europe’s entrepreneurs kept the continent’s business landscape vibrant in 2023, with more new companies opening than closing despite ongoing economic uncertainty. According to Eurostat, the European Union recorded over 33 million active enterprises last year, with 3.5 million new firms launched and 2.8 million shutting down — a birth rate of 10.5% and a death rate of 8.5%.
However, the data also highlights striking contrasts between EU member states, revealing where entrepreneurial activity is thriving — and where it is slowing.
Baltic Nations Lead in Business Creation
Lithuania recorded the highest enterprise birth rate at 19.6%, followed by Malta, Portugal, Estonia, and France, all exceeding 14%. At the other end of the spectrum, Austria saw the lowest business creation rate at 6.2%, with Denmark, Italy, Sweden, Belgium, Germany, and Greece also recording figures below 9%.
Business closures showed an even wider range. Hungary posted the lowest death rate at 2.6%, while Estonia topped the list at a striking 27.5%. Other countries with high closure rates included Ireland, Bulgaria, and Lithuania.
Winners and Losers in Europe’s Business Balance
According to Professor Jun Du of Aston Business School, the difference between business births and deaths is a key measure of “economic vitality,” showing how effectively economies renew themselves through innovation and adaptation.
In 2023, eight of the 31 European countries analyzed had higher business death rates than birth rates. Estonia faced the largest negative gap — 13.2 percentage points — meaning almost twice as many businesses closed (45,389) as opened (23,544). Bulgaria and Ireland also reported negative gaps of 5.8 and 4.8 points, respectively.
Conversely, Malta stood out with the highest positive gap at 10.5 percentage points, with about 2.5 times more firms opening (9,669) than closing (3,726). Croatia, Hungary, Latvia, Norway, Portugal, Romania, and Greece also recorded strong positive gaps above 5 points.
France saw the biggest overall increase in business numbers, with 164,420 more companies opened than dissolved, while Poland had the largest negative difference at 26,732.
Economic Resilience Amid Challenges
Experts from Eurochambres, the association of European chambers of commerce, said the figures reflect the resilience of small and medium-sized enterprises (SMEs) despite headwinds such as the lingering effects of Russia’s war in Ukraine, the energy crisis, and the withdrawal of pandemic-era fiscal support.
“The positive gap between enterprise births and deaths in many EU states reflects the adaptability of European SMEs and the impact of targeted public support,” said Giacomo Fersini and Ben Butters of Eurochambres.
They noted that post-pandemic readjustments and administrative delays may have influenced closure and registration figures but stressed that strong support ecosystems — including easy registration processes, active chambers of commerce, and effective insolvency laws — continue to foster entrepreneurship.
Countries with efficient regulatory systems and access to start-up finance, they added, remain the most fertile ground for new business creation.
