Summary of the Regulation: Enhancing Investment Opportunities in Europe and the UK

As of late December 2025, several European and UK jurisdictions have enacted tax measures that will take effect in 2026. These reforms significantly enhance the attractiveness of investing in certain European member states and the UK. They should be viewed as part of a broader, coordinated effort to strengthen Europe’s position in global capital markets. This comes at a time of intensified competition for private investment, entrepreneurial talent, and innovation funding. In this blog, I will analyze the practical advantages by jurisdiction of the newly enacted regulations, focusing on those that will remain relevant and come into effect in 2026. Together, these measures reflect a deliberate policy to remain competitive against initiatives such as the Big Beautiful Bill in the USA.

Practical Advantages by Jurisdiction

Luxembourg: A Hub for Private Capital

In Luxembourg, the 2026 reform introduces a direct and immediate incentive for private capital deployment into start-ups. The new personal income tax credit allows individual investors to offset part of their income tax liability against qualifying equity investments. This tax credit amounts to 20% of the eligible investments, with a maximum limit of €100,000 per tax year. This initiative is designed to stimulate investment in innovative ventures, making Luxembourg an appealing destination for investors.

Belgium: Strengthening Founder-Centric Incentives

In Belgium, the combination of a deduction linked to capital contributions and an increased tax credit for self-employed individuals creates a founder-centric incentive framework. Starting in 2026, the participation exemption will also apply to group contributions. Consequently, amounts received as intra-group contributions will be deductible, enhancing the financial environment for entrepreneurs and fostering growth.

United Kingdom: Refinement of Investment Schemes

In the United Kingdom, the continued refinement of the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) will take effect on April 6, 2026. These schemes preserve one of the most mature and legally sophisticated angel investment ecosystems in Europe. From a practical perspective, SEIS offers one of the most generous income tax reliefs available to individual investors. Investors may claim income tax relief at a rate of 50% of the amount subscribed for qualifying shares, subject to an annual investment cap of £200,000. This relief may be carried back to the previous tax year, allowing investors to optimize relief allocation based on their available tax liability. It is essential to note that where relief exceeds the investor’s income tax liability for the relevant year, the excess is forfeited. Therefore, careful timing and allocation decisions are crucial.

Beyond income tax relief, SEIS provides two complementary Capital Gains Tax (CGT) reliefs that materially enhance the risk-adjusted return profile. First, reinvestment relief allows an individual who realizes a chargeable gain on the disposal of any asset to treat up to 50% of that gain as exempt from CGT, provided the proceeds are reinvested in qualifying SEIS shares and SEIS income tax relief is also claimed. This exemption applies up to a maximum reinvested gain of £100,000 and is proportionately reduced if the reinvested amount is lower. Second, disposal relief offers a full CGT exemption on gains arising from the disposal of SEIS shares held for at least three years, subject to compliance with statutory conditions throughout the holding period.

Implications for Businesses and Investors

Luxembourg: A Competitive Edge

For Luxembourg, the practical implication is a clearer and more competitive positioning as a hub for early-stage private capital. The availability of an upfront personal income tax credit of 20% (capped at €100,000 per tax year) directly improves the after-tax return profile of angel investments. For businesses, this translates into improved access to Luxembourg-based private investors and family offices. For investors, it reduces downside risk and enhances liquidity planning in the early phases of investment.

Belgium: Enhancing Entrepreneurial Growth

In Belgium, the 2026 framework strengthens founder-led and group-based investment structures. The extension of the participation exemption to group contributions lowers the effective tax cost of intra-group funding. This facilitates recapitalizations and internal growth financing. Combined with the increased tax credit for self-employed individuals and the continued relevance of investment deductions in specific asset classes, these measures enhance Belgium’s attractiveness for entrepreneurs who both capitalize on and actively operate their businesses.

United Kingdom: Investor-Friendly Environment

In the United Kingdom, the continued operation and refinement of EIS and SEIS from April 2026 reinforces the UK’s position as one of the most investor-friendly jurisdictions for seed and early-growth financing. The availability of 50% income tax relief, along with reinvestment and disposal reliefs for capital gains, significantly improves risk-adjusted returns for individual investors. For start-ups, this materially lowers fundraising friction, accelerates access to angel capital, and supports larger or more rapid funding rounds, provided strict eligibility and compliance requirements are met.

How MCORE LAW Can Help in 2026

In 2026, MCORE LAW is committed to supporting start-ups and growth companies seeking to expand or establish operations in Europe. We provide clear guidance on the tax incentives and regulatory frameworks available across key jurisdictions. Our team assists clients in understanding which incentives apply to their business model, stage of growth, and investor profile. This enables them to make informed decisions when entering or scaling within European markets.

Our advisory services include high-level mapping of available incentives, coordination of cross-border tax and legal considerations, and strategic support in aligning expansion plans with local incentive regimes. By offering a practical overview of opportunities and requirements, MCORE LAW helps start-ups navigate Europe’s 2026 incentive landscape efficiently. We position our clients for sustainable growth, ensuring they can confidently navigate complex global tax environments and achieve significant tax savings across multiple jurisdictions.

In conclusion, the regulatory changes set to take effect in 2026 present a wealth of opportunities for investors and businesses alike. By understanding and leveraging these incentives, stakeholders can enhance their investment strategies and operational frameworks, ultimately driving growth and success in the evolving European market.