BRUSSELS, BELGIUM – Today, the European Parliament adopted the own-initiative report on the 28th regime.

ACT | The App Association recognizes the Parliament’s substantial work undertaken to advance the discussion on strengthening the Single Market for small and medium-sized enterprises (SMEs).

The Parliament’s report contains many constructive and forward-looking recommendations that recognise the challenges faced by European startups and SMEs while operating and scaling across borders. ACT welcomes the Parliament’s support for the creation of a ‘Societas Europaea Unificata’ (S.EU), combined with fast and fully digital company formation and registration, the once-only principle, and the digitalisation of administrative procedures. These elements represent important steps toward reducing administrative burdens, increasing legal certainty, and enabling startups to operate seamlessly across the Single Market.

Startups and SMEs are the backbone of Europe’s digital economy, yet they continue to face 27 different legal systems when incorporating, operating, and growing across the EU. Addressing this fragmentation is essential if Europe is serious about boosting competitiveness and turning innovation into growth.

“The European Parliament has clearly recognised that Single Market fragmentation remains one of the biggest obstacles, hindering small companies’ potential to grow”, said Mike Sax, Founder and Chairperson of ACT | The App Association. “The report contains many valuable recommendations, particularly on digital and simplified company formation, that reflect the realities faced by SMEs on the ground.”

At the same time, the Parliament rightly underlines that the 28th regime must be ‘ambitious both in substance and in form.’ ACT strongly agrees and stresses that this ambition can only be realised through the adoption of the 28th regime as a Regulation.

“If the 28th regime is to deliver real simplification, it must be ambitious not only in its content, but also in its form,” Sax continued. “Only a Regulation can provide a true, EU-wide framework that applies directly across all Member States, gives startups legal certainty from day one, and avoids the fragmentation that comes with national transposition.”

A Regulation would ensure full harmonisation, enable a single EU-level system for company formation and cross-border operations, and allow startups and investors to rely on one coherent legal framework. In this context, Article 352 TFEU offers the appropriate legal basis to establish a genuine 28th regime that strengthens the Single Market.

“As stated by Commissioner McGrath during yesterday’s debate, we need to avoid 27 versions of the 28th regime,” Sax concluded.”  “A Directive rather than a Regulation would add another 27 layers of complexity. Europea needs a single, predictable framework that startups can opt into with confidence. The European Commission should now build on Parliament’s work and bring forward the 28th regime as a Regulation that is truly ambitious in substance and in form.”

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