Dear Executive Vice-President Virkkunen, Commissioner Zaharieva, and Honourable Members of the European Parliament,

We, the members of ACT | The App Association, are European startups, scaleups, and small and medium-sized enterprises (SMEs) building companies from kitchen tables and co-working spaces, yet our innovations power the global digital economy and reach millions of consumers and businesses every day. We are writing to share our perspective on two critical initiatives shaping the future of innovation in Europe: the 28th regime and the European Innovation Act.

As entrepreneurs building the next generation of digital products and services, we welcome the European Union’s renewed commitment to making the Single Market work for innovators through the 28th regime and the European Innovation Act.

For European startups, the first challenge begins at incorporation. Registering a company today often means navigating 27 distinct national procedures, languages, and bureaucratic systems, each with its own legal and administrative requirements. This not only delays market entry, but it also makes it harder to attract investment as investors face uncertainty about corporate status, compliance, and jurisdictional consistency. A fully digital, EU-wide company incorporation process completed within 48 hours would be a game-changer for us. It would allow us to establish a company anywhere in the EU, obtain recognition across Member States immediately, and unlock access to cross-border investment and capital. Such a reform would represent a decisive step toward completing the Single Market, but it can only succeed if the 28th regime takes the form of a Regulation.

Only a directly applicable Regulation can deliver the legal certainty, harmonisation, and predictability that we need to operate seamlessly across the EU. A Regulation would allow startups to opt-in to a single, coherent EU-wide framework for incorporation, compliance, and scaling without needing to navigate divergent national rules. This would not only simplify operations but also send a strong signal that Europe is serious about making its Single Market work for innovators.

Without a Regulation-level approach, the 28th regime risks becoming another layer of complexity rather than a simplification tool. To succeed, it must replace fragmentation with true legal unity, allowing us to focus on growth, not bureaucracy.

While the 28th regime should reduce fragmentation, the European Innovation Act must enable experimentation. We thrive in environments where innovation can be tested, refined, and scaled, not stifled by uncertainty or overlapping compliance burdens.

We therefore call on the Commission to make regulatory sandboxes and innovation stress tests central pillars of the Innovation Act’s implementation.

Specifically, we recommend:

  • EU-wide coordination of regulatory sandboxes, ensuring mutual recognition and interoperability between Member States;
  • Mandatory innovation stress tests for all new or revised EU legislation, to assess real-world impact on startups before adoption;
  • A centralised reporting platform allowing startups to fulfil multiple regulatory requirements (e.g. under the AI Act, NIS2, DSA, and CRA) through a single process; and
  • Active participation of startups in designing and evaluating sandbox outcomes, ensuring that frameworks reflect market realities.

These measures would transform the Innovation Act from a declaratory initiative into a practical instrument for startup-friendly policymaking, one that balances protection with experimentation and growth.

Europe’s digital economy is rich in talent and ideas but constrained by complexity. The combination of a Regulation-based 28th regime and a sandbox-driven Innovation Act offers a historic opportunity to create a more agile, harmonised, and competitive environment for startups.

We urge the European institutions to:

  1. Adopt the 28th regime as a Regulation that fully harmonises core business rules across the EU;
  2. Align the Innovation Act with practical experimentation tools, including coordinated sandboxes, innovation stress tests, and centralised compliance mechanisms; and
  3. Ensure both initiatives are designed with, not just for, Europe’s startups, incorporating direct input from the innovators, like us, who face these challenges every day.

We stand ready to support this effort and to contribute our experience to make Europe the best place to start and scale a digital business.

Sincerely,