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. With the European Commission now moving the 28th regime forward through its EU Inc. proposal, the question is no longer whether Europe should act, but whether it will do so in a way that truly reduces fragmentation for startups and SMEs. To understand why these proposals matter, it helps to look at what each aims 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, the Commission moved the 28th regime forward by presenting EU Inc. as the starting point for the broader framework and proposing it in the form of a Regulation. This would create a clearer path toward the harmonised, directly applicable framework startups and scaleups need to expand across the Single Market with greater certainty.
For startups and scaleups, a Regulation-based approach is essential 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.
At the same time, the current proposal still includes some provisions that risk creating more legal fragmentation. While we welcome some elements, including a single incorporation process and reforms to employee stock ownership rules, the lack of a pan-European registry from the start of the Regulation and the absence of a binding EU-level adjudication path risk undermining the regime’s promise in practice. A central submission portal alone is a half-measure if startups still have to navigate fragmented systems behind it. Similarly, non-binding recommendations on court jurisdiction do not provide the predictability and legal certainty innovative small businesses need to scale confidently across the Single Market.
Members taking ACTion
The 28th regime was a major issue area for our members at our Global App Economy Conference: EU this past February in Brussels, where we brought together startups, scaleups, and independent developers from across Europe for several days of policy discussions and meetings with EU decision-makers and conversations about the policies shaping whether small teams can launch and scale across the Single Market. That work was built on a campaign our members championed in December 2025, when they joined forces in a sign-on letter to Executive Vice-President Virkkunen, Commissioner Zaharieva, and Members of the European Parliament, to share their experiences to help shape policies that truly work for startups.
Throughout their advocacy, our members’ message has been 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.
Moving forward
These collective efforts reflect 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.
For members looking for a deeper dive, we’ve created a resource that breaks down the EU Inc. proposal in practical terms, showing where the Commission’s text aligns with our community’s priorities, where important gaps remain, and what startups and SMEs should be watching as the proposal moves through Parliament and Council. See below for more from our newest member resource.