The European Union has acknowledged that start-ups and scale-ups face real obstacles when trying to set up and run businesses across the Single Market. EU institutions are currently working on new legal frameworks for young, innovative companies. The European Parliament has presented its vision of a “28th legal regime,” under which rules for businesses would be simplified and harmonized. The proposed concept of a single European company would allow entrepreneurs to establish a business within 48 hours—fully digitally and across borders.
In the Competitiveness Compass published a year ago, the European Commission announced plans to create a 28th legal regime that would allow innovative companies to rely on one unified, EU-wide set of rules—covering key areas such as company law, insolvency law, labour law, and tax law. The 28th legal regime was also highlighted in Enrico Letta’s 2024 report as a core recommendation aimed at strengthening the Single Market and removing internal barriers.
“There are 27 countries in the European Union, and each of them has its own laws related to how the economy functions. This needs to change—we need to unify the rules for access to starting a business. This package of solutions has been widely accepted by the majority in the European Parliament. Essentially, only two political groups were against its introduction,”
says Bogdan Rzońca, a Member of the European Parliament (Law and Justice), in an interview with Newseria.
The European Parliament supports creating a harmonized package of rules—i.e., a “28th legal regime”—for start-ups and scale-ups. On 20 January this year, MEPs adopted a set of recommendations that are to be taken into account in the Commission’s legislative proposal, expected to be presented in the first quarter of 2026.
According to MEPs, start-ups should be able to establish a business quickly. This could be enabled by registering limited liability companies as a “single European company” (Societas Europaea Unificata, S.EU) through a digital process completed within 48 hours. These companies would then be automatically recognized in all Member States. Their seamless operation across the Single Market would, in turn, be supported by a unified, multilingual portal managed by the European Commission.
As the European Commission points out, the central problem is the fragmentation of legal frameworks across Member States, which restricts business activity and causes companies to lose potential within the Single Market. This includes complex procedures and high costs linked to establishing and operating businesses throughout the EU, as well as the diversity of national company-law provisions and requirements concerning the creation, structure, and functioning of enterprises. In addition, the lack of standardized digital procedures and tools can make it harder to secure financing or discourage investors from getting involved.
“On the other hand, there is a major problem with how start-ups function. Even if new companies are created—because they received funding or financial support from the European Union—later it turns out that after two or three years they collapse. There is no continuity of support in the form of, for example, appropriate relief measures in individual countries, and treating start-ups as places for employment and development. These are the two extreme problems: bureaucracy and law, and the lack of long-term financing for those ideas that could guarantee companies in the European Union greater longevity,”
Bogdan Rzońca argues.
According to the latest GEM Poland report from the entrepreneurship study Global Entrepreneurship Monitor, Poland 2025, in 2024 the owners and co-owners of Polish start-ups indicated tax burdens as a key factor hindering growth (55% of respondents). Bureaucracy and formalities ranked second (48%), followed by legal instability (36%).
“Simplifying and digitizing company formation are important from the perspective of the competitiveness of European start-ups. The French model is very well known. France managed to ignite economic hubs in different parts of the country where companies prosper and do not fail on the same scale as in other EU countries. They ensured that these companies had good conditions for development from the very beginning,”
the Law and Justice MEP explains.
In 2013, France established the French Tech Mission, a public institution responsible for developing local start-ups. Under this initiative, 17 so-called “tech capitals” were created, bringing together stakeholders within their local technology ecosystems and implementing national programs at the local level.
“This is the direction the whole world is taking—such as the United States. Human ingenuity is great; sometimes what’s missing are the resources to finance it. That is why focusing on start-ups is the right approach, just as reducing bureaucracy is. You just need a bit of money. More funds should be redirected in the budget for 2027 and after 2028—already within the new financial perspective—toward the economic activity of young, creative people who want to invest their ideas in the European Union,”
Bogdan Rzońca says.
The European Parliament also believes that companies should have the ability to commercialize their research and is calling for measures that would ensure better cooperation between SMEs, start-ups, scale-ups, and research institutions in the EU.
“Global university rankings show that European science is doing very badly, and that is also a problem. I believe the path to economic success leads through strong research centres, through linking science with business. That does not exist in the European Union. The EU has lost a lot of time, also because of those bureaucratic regulations. If that changes—if universities and technical universities start working with entrepreneurs, if they take entrepreneurs’ ideas and properly discuss them with students—then I believe we can think about successful economic development of the European Union in the future,”
the Law and Justice MEP argues.
