EU ACTivists for Change: Members join forces to make the Single Market work for startups

Across Europe, startups, scaleups and small and medium-sized enterprises (SMEs) are building world-class products, but their growth path is still more complicated than it should be. EU startups face 27 different systems for incorporation, regulation, and compliance, each with its own rules and paperwork.

Two initiatives, the 28th regime and the European Innovation Act, could change that. Together, they represent a once-in-a-generation opportunity to make it simpler, faster, and fairer for innovators to start and scale across the EU. To understand why these proposals matter, it helps to look at what each aim to achieve.

Regulation that supports innovation

The 28th regime aims to create a single, EU-wide system for company incorporation. Rather than navigating 27 different national procedures, startups could complete one fully digital process and gain recognition across all EU Member States.

The European Innovation Act complements this goal by promoting experimentation and flexibility within the EU’s regulatory framework. It recognises that startups innovate best when they can test, iterate, and refine products in real-world conditions. Coordinated regulatory sandboxes, innovation stress tests for new legislation, and centralised reporting tools would help ensure that compliance keeps pace with innovation rather than slowing it down.

Together, these initiatives could remove long-standing barriers that prevent startups from expanding across borders and competing globally. For Europe’s innovators, they represent a chance to replace fragmentation with clarity, complexity with consistency, and bureaucracy with growth.

What’s at stake

Recently, regulators in the EU have signalled an intent to move the proposals within the 28th regime forward as a Directive rather than a Regulation. For startups and scaleups, this decision could be detrimental to effectively implementing a Single Market in the EU. We and our members support a Regulation-based approach to guarantee harmonised, directly applicable rules across the EU and provide the legal certainty businesses need to scale confidently. A Directive, by contrast, would allow 27 different national implementations of the proposal, adding to the very fragmentation that the 28th regime was meant to solve and making it harder for startups to grow within the European market.

Members taking ACTion

Our EU members have joined forces in a sign-on letter to Executive Vice-President Virkkunen, Commissioner Zaharieva, and Members of the European Parliament, sharing their experiences to help shape policies that truly work for startups. Their message is clear: Europe’s innovators need clarity, not complexity, and these initiatives can deliver it if properly enacted. As conversations around the 28th regime and the European Innovation Act continue, our members will remain at the forefront, advocating for a Europe where innovation is not hindered by complexity but is empowered by clarity and opportunity.

This collective effort reflects what it means to be an ACTivist for Change: members using their shared voice to create a more consistent and connected environment for innovation. By speaking up, our members are helping to build a stronger Single Market where startups can launch, scale, and compete on equal footing. Want to join future sign on efforts? Email Brad Simonich here.