Europe Looks To Ease Red Tape For Start-Ups

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European Commission proposes new rules to lessen red tape for start-ups, including stock option reform and easier immigration visas

The European Commission has this week proposed new rules for start-up firms, in order to lessen red tape and improve the competitive edge of the the region.

Two of the stand out features of the EC’s ‘Start-up Nations Standard’, is its attempt to get individual countries to reform their stock option laws and improve immigration visas, so start-ups can attract the best talent from around the world.

Europe has noted it is behind the likes of the United States and China in encouraging start-up firms to based themselves in the bloc. And it is aware the UK has long provided one of the best sources of venture capital funding in Europe for start-up companies, with London attracting its fair share of new firms.

Image credit: European Commission
Image credit: European Commission

Regulatory changes

So Europe is therefore keen to make its various regulatory environments easier, in an effort to attract start-ups to its region

The EC announced that ministers representing EU Member States signed three Declarations to pool efforts and resources to promote international connectivity, incentivise the rollout of clean digital technologies and improve the regulatory environment for start-ups and scale-ups.

“These tangible commitments will help accelerate Europe’s green and digital transformation and will contribute to the vision and goals of Europe’s Digital Decade,” it said.

“The new commitments made today strengthen our joint ambitions for a human-centred approach to digitalisation,” said Margrethe Vestager, executive VP for a Europe fit for the Digital Age.

“With several Member states signing, the declarations consolidate commitments within three areas, namely connectivity, start-ups and clean digital technologies, supporting our ambitions towards a more competitive, inclusive and green Europe,” she added.

“The new commitments that Member States made today are also evidence of our determination in the EU to work together for greater digital leadership by 2030,” added Thierry Breton, Commissioner for Internal Market.

Startup signup

The EC said that 25 European countries signed the declaration on ‘EU Startup Nations Standard’.

“To this end, the Commission, together with Member States and industrial stakeholders, has identified a number of best practices that contribute to a growth-friendly environment,” it said.

“These include the processing of applications for visas from third country talent; fiscal treatment of stock options; and, increasing the amount and diversity of private capital.”

Specifically, the EC wants EU countries to be able to create a new company in just one day for a cost of less than 100 euros.

It also wants the processing of visas to be sped up, and reforms of staff stock options, so that options are not be subject to capital gains tax until they are cashed in.

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