London has long been the darling of the European start-up scene, with its entrepreneur-friendly legal infrastructure and robust financing options. And while a global study into the state of entrepreneurship places the UK as the fifth most conducive environment, leagues ahead of the United States and many other prominent EU countries, the biggest barrier remains the nation’s dampened entrepreneurial spirit.

The emerald isle, however, is on the up, according to new research. A combination of a business friendly tax system, easy access to finance and strong economic growth placed Ireland ahead of Slovakia, Latvia and Malta in the ‘Best Places For Business in Europe’ Index, compiled by international money transfer firm, World First. The criteria covered a range of economic and demographic evidence including GDP growth, VAT, business birth and death ratios, corporation tax, education levels, tax breaks for SMEs and access to finance.

Ireland is regularly cited as a good model for achieving economic recovery post financial crisis. The country’s progressive economic policies has attracted a wealth of foreign investment and seen the likes of Facebook, Google and Microsoft open up local offices and creating thousands of jobs. Ireland is also among the top three for education levels in the EU with over 92 per cent of the population attaining a high school education.

“For any business looking to expand in Europe, the first consideration is how easy it will be to make your business successful in your chosen market,” Edward Hardy, analyst at World First said.

“Our research reveals Ireland as the optimum place to achieve such business success in Europe with new businesses being able to benefit from the Emerald Isle’s growing economy and the business friendly initiatives put in place to assist the private sector. This includes the loosening of Ireland’s tax residency requirements and reducing corporation tax to 12.5 per cent which has led to the influx of a number of multinationals already.”

In comparison, the UK comes fifth in the league table, beating Spain, France and Germany. “Despite the uncertainty caused by the UK’s vote to leave, it remains one of the best places to do business in Europe which bodes well for a post-Brexit UK. As the fastest growing G7 economy, the UK provides businesses with a competitive tax system and access to diverse talent. These key characteristics are what the current government will be keen to highlight when negotiating trade deals post-Brexit as they seek to convince foreign firms that the UK is open for business,” Hardy added.

According to the Global Entrepreneurship Index from the Mara Foundation and Opinium, another league table released earlier this month, the UK is an entrepreneurial powerhouse, and is fiercely supportive of local entrepreneurs. However, it is being held back by a lack of strong entrepreneurial attitudes among the general population. These findings mirror those of another similar index, Telefonica’s Index on Digital Life, which examined the UK’s digital openness, confidence and entrepreneurship.

“We’re definitely in a period of uncertainty. Measurements need to be put in place by policy makers for businesses big and small, and most importantly, this has to happen beyond London,” Helen Parker, Telefonica’s head of social innovation told GrowthBusiness.

According to Parker, Telefonica is launching two incubator hubs in the midlands and the north of England as a way to galvanise entrepreneurship and talent in all parts of the country.

“I know from the response rates, there’s still a massive appetite for people to start businesses. It’s important to keep that consistent, and make sure that talent isn’t concentrated in one hub alone,” she said.

The league table for best places for business in Europe

World First’s interactive index, allows businesses to compare which countries ranked highest across each benchmark. All underlying data has been sourced from Eurostat, the World Bank, finance ministries across the EU and respective official domestic statistics agencies. The rankings are:

1. Ireland
2. Slovakia
3. Latvia
4. Malta
5. United Kingdom
6. Slovenia
7. Netherlands
8. Romania
9. Hungary
10. Spain
11. Luxembourg
12. Sweden
13. Poland
14. France
15. Bulgaria
16. Estonia
17. Finland
18. Czech Republic
19. Greece
20. Portugal
21. Belgium
22. Cyprus
23. Croatia
24. Denmark
25. Germany
26. Austria
27. Italy