On 28 May 2025, the European Commission released its new Startup and Scaleup Strategy, aiming to make the EU a more attractive destination to launch and grow tech-driven businesses.

At ACT | The App Association, we welcome the strategy as a meaningful step forward. More than a political ambition, it’s a practical roadmap to tackle the fragmentation, funding gaps, and regulatory hurdles that have held back too many European startups for too long.

Earlier this year, we submitted input to the European Commission’s public consultation on the Startup and Scaleup Strategy. We’re encouraged to see that several of our recommendations, such as those related to regulatory simplification, capital access, and the proposed 28th regime, are reflected in the Commission’s newly released communication. Here’s what’s on the table and what it could mean for digital and app-based businesses across the EU:

The 28th regime
One of the most ambitious proposals is the introduction of a ‘28th regime’ – an EU-wide corporate legal framework for startups. This would allow enterprises to:

  • Set up and operate across the Single Market without navigating 27 different legal systems
  • Launch in under 48 hours with digital-by-default solutions
  • Benefit from simplified rules in areas like insolvency, labour, and tax law

Why it matters: For startups, especially those looking to scale beyond their home market, this could drastically reduce administrative burdens and legal complexity. A harmonised regime could streamline compliance, reduce administrative costs, and lower the barrier to growth across borders.

In addition to our submission to the Commission, we also shared input directly with MEP René Repasi for the upcoming own-initiative report, to emphasise the importance of a truly optional and SME-friendly framework, and we look forward to continue contributing to this initiative.

 

The European Innovation Act
Another key initiative is the forthcoming European Innovation Act, designed to boost regulatory agility. Central to this is a coordinated EU approach to regulatory sandboxes, controlled environments where startups can test new technologies in collaboration with regulators with little to no risk. The proposal includes:

  • A common EU definition and guiding principles for sandboxes
  • Support for cross-border and place-based sandbox initiatives
  • Increased use of innovation impact assessments in policymaking

Why it matters: Sandboxes help SMEs bring emerging technologies to market responsibly, while giving regulators space to adapt. But without consistent standards across Member States, fragmentation will persist. We strongly support the Commission’s efforts to align national approaches and ensure startups can scale solutions tested in one market across the EU. Our members have made it clear, through comments and meetings with the Directorate-General for Research and Innovation, that they strongly support this approach.

 

 Boosting access to capital with SIU
As part of its broader competitiveness agenda, the EU has introduced the Savings and Investment Union (SIU) strategy aimed at one of the biggest challenges facing startups: access to funding. The SIU focuses on:

  • Reducing capital market fragmentation
  • Mobilising institutional investors
  • Expanding access to both equity and debt financing
  • Aligning EU public funding tools with the needs of high-growth companies

Why it matters: Startups often face major hurdles accessing growth capital, especially in markets with underdeveloped venture ecosystems. The SIU could help close this gap by creating more diverse, reliable, and accessible funding pathways. For SMEs, this means more chances to scale thanks to European capital.

 

Moving forward

We welcome and support the Startup and Scaleup Strategy as a meaningful step towards creating a more coherent and competitive environment for European SMEs and innovators. The focus on regulatory simplification, harmonisation, sandboxes, and access to finance reflects many of the priorities we’ve long championed and is promising.

The challenge now lies in implementation – how will these proposals translate into concrete and practical measures that truly support small innovators? We urge the Commission to avoid unnecessary complexity and keep the needs of startups at the core of every step forward.

We look forward to continued engagement with EU policymakers to help ensure this strategy delivers real impact for startups and scaleups across the Single Market. If you’re an SME, startup, or scaleup with questions or perspectives to share, we encourage you to get in touch by emailing Brad Simonich here.