Breaking into the EU is a milestone many startups dream of — but visas, talent, regulation and legal structures can quickly turn that dream into a maze. Choosing the right first market is only the beginning, scaling further across the continent brings a whole new set of challenges.
At the latest Sifted Talks, we unpacked what founders need to know before making the leap, and the most common pitfalls teams encounter on their European expansion journey.
Our panel of industry experts were:
- Tim Chong, cofounder and CEO at UK-based credit card startup Yonder
- James Varga, cofounder at UK-based consultancy The Closing Foundry
- Ülane Vilumets, head of global expansion at e-Residency of Estonia, a digital identity issued by the Estonian government to non-Estonians, allowing them to start and manage an EU-based company entirely online
1/ Pick a low‑friction first market
Varga stressed that when expanding into the EU, founders want fast setup, direct access to regulators and simple hiring processes. The less time spent on admin, the more they can focus on building the business.
We ended up loving Estonia for all of those reasons around lack of friction and access to conversation support within the community… ‘Global first’ is a mindset everybody has there.” — James Varga, The Closing Foundry
2/ Test market attractiveness — and keep entries reversible
Chong advised founders to enter new markets as cheaply and reversibly as possible with lean, reversible market entries. He said every new market for Yonder is almost like a mini startup — they put in a small amount of capital to see whether they get signals of a market fit and, if they do, they scale investment; if not, they roll back quickly.
You can talk to many customers and experts, but do customers use your product and love your product? You don't know that until you're in the market.” — Tim Chong, Yonder
3/ Plan for bureaucracy — governments don’t move at startup speed
Slow government processes can become major roadblocks. Chong noted a past experience where it took 12 months to set up an entity in India. Vilumets instead recommended somewhere like Estonia, which offers easy access for those who aren’t Estonian or physically located in the country.
Governments like to measure time in months and years when they do or change something but startup founders need to measure things in days, so this is a very different mindset.” — Ülane Vilumets, e‑Residency of Estonia
4/ Choose a country with a strong tech talent pool
Chong highlighted the importance of local talent. He noted the Netherlands as a standout example, where there are multiple successful breakout companies. He said this is especially important for new startups who are headhunting for roles rather than filling them via job ads.
It’s also important to assess how easy it is to bring in talent from abroad. Countries with visas for founders and startups, and supportive work‑authorisation policies, can make it far easier to recruit or relocate non‑local founders and early key hires.
We almost have to go back to the ‘zero to one’ playbook of the company where we have to go out and find talent — we have to find the best people on the ground. There are a subset of people that really want the adventure of setting up something new.” — Chong
5/ E‑residency enables remote business ownership
The biggest mistake that founders make is [going] after the large market for their product when it may not actually be an environment where you want to be with your business, where you want to be set up or where it's actually efficient to do these things.” — Vilumets
Vilumets discussed how Estonia’s e‑Residency programme helps founders to bypass traditional barriers when setting up remotely. For example, you don’t need to go to the notary (a lawyer that specialises in document authentication for use abroad) because founders can go online thanks to highly secure digital identity checks.
With e‑Residency enabling digital sign‑off and company management from anywhere, you can stay flexible as you build.
