Europe’s Bid to Become a Global Startup Powerhouse.

Introduction

In May 2025, the European Commission issued the EU Start-up and Scale-up Strategy, a far-reaching framework aimed at making Europe the world’s most competitive jurisdiction for launching and scaling innovative companies. The Strategy highlights that despite Europe’s strong research base, startups continue to face administrative burdens, slow incorporation procedures, and fragmented rules. To address these, the Commission proposes harmonized company-law tools, digital identity solutions for businesses, and tax simplification for early-stage firms.

Tax Simplification Measures for Startups

The Strategy includes a forthcoming EU Recommendation promoting immediate expensing, accelerated depreciation, and startup-focused tax credits. Although this EU measure is forthcoming, Member States already offer examples of mature, implemented tax relief regimes similar to what the Commission promotes. In this sense member states have already established benefitial rin order to attract start-ups into their jurisdiction, the Netherlands for instance has implemented the WBSO R&D Wage-Tax Relief. The WBSO, codified in the Research and Development Promotion Act, reduces wage taxes on employees engaged in R&D and directly lowers payroll burdens for early-stage companies.

Company-Law Simplification and Rapid Incorporation (28th Regime)

The Strategy proposes an EU-wide optional incorporation regime allowing company formation within 48 hours. Although the 28th Regime is not yet in force, several Member States already operate systems that reflect what the EU seeks to replicate across the Single Market.

The regime of Portugal’s “Empresa na Hora” (Company in One Hour). has represented since 2005. Portugal has allowed incorporation at designated counters within an hour using pre-approved articles of association and digital certificates. This legislative framework (Decree-Law 111/2005) remains one of the fastest legally binding incorporation systems in Europe. This national precedent demonstrates how accelerated incorporation measurably reduces administrative friction and is precisely the type of mechanism the EU intends to standardise through the 28th Regime.

Similarly, the Netherlands has implemented the Digital Notary Act (“Wet digitale oprichting bv”), in force since 2021, which allows the full online incorporation of a private limited company (BV). Under this system, founders may execute notarial deeds via secure videoconferencing, apply digital signatures recognised under eIDAS, and complete registration electronically with the Chamber of Commerce (KVK). The Dutch framework significantly shortens incorporation timelines and eliminates traditional formalities, making it one of the most advanced digital incorporation regimes in Europe.

European Business Wallet

The Strategy introduces the idea of an EU-wide digital identity for businesses. While the EU-level system is not yet implemented, Member States have already deployed comparable digital-identity and authenticated-credential systems that operate legally and at scale.

Estonia’s e-Business Register and e-Residency Digital ID provides evidence of the increasing efforts established by the individual member states of the European Union. Under the Estonian Commercial Code and Digital Identification Acts, companies can incorporate through with a e-residency digital id, and with it they can submit, fill and authenticate legally binding documents entirely online using the national eID system. Digital credentials are recognised by Estonian authorities and trusted across borders under eIDAS.

Innovation Stress Test

The Commission proposes that Member States examine whether new legislation unintentionally hinders innovation. Although this EU test is new, some Member States already apply similar legally binding regulatory-impact methodologies. It is still unclear the interaction that this may have with regards to the European Intelligence Act.

In conclusion, the EU Startup and Scaleup Strategy seeks to reduce operational barriers for innovative firms by promoting faster incorporation, simpler tax rules, and a unified digital business identity. Although many measures are still pending at EU level, existing national regimes in Portugal, the Netherlands, and Estonia show that these reforms are workable and effective in practice.

These precedents confirm that streamlined procedures, digital incorporation, and targeted tax relief can materially support early-stage companies. The Strategy therefore provides a practical pathway for extending such benefits across the Single Market and creating a more efficient environment for startups to grow.

At MCORE Law, we remain closely informed of the latest developments affecting the startup landscape, ensuring that our clients understand emerging EU initiatives and their practical implications. This allows us to provide clear, timely guidance as Europe moves toward a more unified and efficient framework for innovative businesses.