Byzantine red-tape, corruption, a legal framework that makes the Talmud look like a minor collection of one-liners, add to that a somewhat xenophobic business environment and an economy that's moribund and you've got the least favorable place to start a business : Greece. (I speak from experience. I'm sure Kafka was Greek.) The easiest, in my experience, is The Netherlands.

London appears to be a fairly popular place to start a startup. A limited company can be started in the UK with 1 pound in capital, plus a few hundred in various fees. Several countries offer more favorable tax climates and there are also benefits for starting a business in specific (typically underdeveloped) regions in a number of EU countries, so you might want to check that, but it appears that the UK is the go-to jurisdiction for EU startups. Note that you can run your company from any EU country and register in any EU country (though some countries require more solid legal presence in the country to be registered there).

Good info. Thanks. Didn't know you could register anywhere in the EU.

You might try this http://www.heritage.org/index/ranking.aspx ; besides the table, if you click on a country name you get (slightly) more detailed information about the country. There are also other country rankings out there, this is the only recent one I have a link to.

Awesome link! Thanks!

Can you be more specific as to the types of legal restrictions you are concerned about? Or is this just a general question on what countries are more/less supportive of start-up businesses?

Yes, it's just a general question. I don't really know what issues I might face although I have heard for example that the EU is more restrictive than the US in general. But, again, I'm not even sure what that means in practical terms.

It means that there are more rules, but it also means that there is less litigation.