The European Commission has unveiled its much-awaited strategy for startups and scaleups, with plans to tackle some of the key barriers to growth for tech companies in the EU.
The package includes harmonising fragmented national markets and plugging the funding gap for later-stage businesses thanks to a new ‘scaleup fund’.
Policymakers aim to ensure European startups stay in the region instead of relocating to the US, where market conditions are more favourable to grow. Nearly 30% of European unicorns relocated outside of the EU between 2008 and 2021, according to the strategy.
The text addresses long-standing challenges in regulation, funding, tech transfer, talent and access to infrastructure, networks and services, and puts forward nearly 30 proposals for actions to take over the next two years to address these issues.
“It’s pretty exhaustive in terms of understanding the needs of the ecosystem,” Marianne Tordeux-Bitker, director of public affairs at startup and VC lobby France Digitale, tells Sifted. “They’ve understood the complexity.”
Many propositions, such as the creation of a ‘European 28th regime’ — a regulatory framework with a single set of rules for businesses operating across several EU countries — have been in the works for some time. But Tordeux-Bitker says the strategy now provides a roadmap for the legislative work needed to bring these ideas to life.
“We’ve been waiting for this strategy for a long time,” she says, “and we need it to move into action… Now we’re waiting for the Commission to get to work to make the legislative proposals to make it happen.”
What’s in the strategy?
The Commission proposes to establish a ‘28th regime’ for businesses — a “single set of rules” to help businesses overcome barriers in setting up, scaling up and operating companies across different EU countries.
This is unlikely to address differences in tax and labour regulations, which come under the remit of national laws, but would aim to reduce existing administrative hurdles when opening an entity in another country.
MEP Pascal Canfin, who leads work on the 28th regime in the European Parliament, says the initiative could, for example, harmonise stock option regimes.
“Today, stock option regimes are fragmented,” Canfin tells Sifted. “[Harmonisation] would enable companies to better attract talent and have more coherence in their management processes… This could be a part of the 28th regime.”
The Commission plans to make a formal legislative proposal for the 28th regime at the start of 2026, and Canfin says the law could come into force as soon as 2027.
The strategy also proposes a boost to funding for European startups and scaleups, with plans to expand the role of the European Innovation Council (EIC), the EU’s main programme for supporting innovation in the region.
In particular, the Commission plans to launch a new fund in 2026 for the EIC to invest directly into European deeptech scaleups. Dubbed the Scaleup Europe Fund, it would target “strategic sectors” like AI, quantum, cleantech, semiconductors, advanced materials and biotech.
Scaleup Europe would work alongside the EIC’s existing funding vehicles, which already include grants and equity investments of up to €30m. The size of the new fund hasn’t been disclosed, but the strategy states it will be cofunded by private investors.
To attract talent, the Commission has proposed a number of measures including adopting an ‘EU visa strategy’ for foreign students, researchers and entrepreneurs, and encouraging Member States to implement fast-track schemes enabling startup founders to obtain work permits.
It comes as the EU attempts to position itself as a top destination for talent relocating from the US as the Trump administration cracks down on higher education and research institutions.
Other proposals in the strategy include promoting the transfer of technologies from university labs to businesses, creating startup-friendly public procurement procedures and supporting access to infrastructure, especially to AI computing capabilities.
What’s next?
Anna Handschuh, founder of strategic advisory and advocacy firm Future Affairs Consulting, says what comes next is what matters most.
“It’s simple. If you want people to choose Europe, actions speak louder than words,” she tells Sifted. “Work with the founders, listen to them and take action based on what you hear. They don’t have time for endless position papers and meetings that achieve nothing.”
Read the orginal article: https://sifted.eu/articles/eu-startup-scaleup-strategy/
