This article was the Topic of the Week in the newsletter for Week 26 in 2025.

From synthetic heart valves, flying taxis, software solutions, cancer-fighting mRNA vaccines to space rockets: the innovative scope of German start-ups is enormous, rapidly opening new market and growth potentials. To strengthen the innovative potential of such young companies within the single market, the EU Commission has presented a new package of measures: the EU Start-up and Scale-up Strategy. Through bureaucratic reduction, new financing instruments, and talent promotion, they aim to support innovators, founders, and investors. This opens new opportunities for businesses – but also new requirements that need to be considered early.

A New Legal Framework for Companies?

At the core of the strategy for the 27 EU member states is a so-called "28th regime": a new EU-wide legal framework for companies regarding certain aspects of corporate, insolvency, labor, and tax law. It is still unclear how this will relate to existing national and European regulations. The "28th regime" aims to help entrepreneurs establish and operate businesses more quickly and digitally. It will be crucial to ensure that the new options are open to all companies and are practical for businesses. The Commission plans to present the proposal for a "28th regime" at the beginning of 2026.

Strengthening Investments in New Ideas

The privately managed "Scale-up Europe" fund aims to bundle private co-investments in the Deep-Tech sector – such as artificial intelligence, robotics, biotechnology, or quantum technologies – and support growth firms with major financing rounds.

Additionally, the EU Commission plans to mobilize more venture capital through an "Innovation Investment Pact" in collaboration with institutional investors such as pension funds or investment banks. Particularly relevant for technology-oriented companies: new valuation systems will recognize intellectual property as security for financing – a potential lever for research-focused companies to gain easier access to growth capital and secure innovation-oriented investments closer to the market.

Accelerating Innovation Market Readiness

Under a "European Innovation Act," Europe-wide "Regulatory Sandboxes" are planned. In these legally safeguarded real-world laboratories, companies can test new business models under real conditions, for example in health, finance, or environmental sectors. Furthermore, a reform of EU procurement law aims to facilitate access for young companies to public tenders.

Complementing this, a "European Corporate Network" promotes collaboration between start-ups and established companies. The "Lab-to-Unicorn Initiative" focuses on accelerating knowledge transfer from universities and improving networking of university innovation centers.

Attracting Talent, Improving Access to Infrastructure

The EU Commission also aims to help start-ups attract international professionals – for example, through simplified visa and Blue Card procedures. Besides this "Blue Carpet Initiative," tax incentives for employee participation and new models for cross-border remote work are planned. Access to technology infrastructure is to be improved through a new "Charter of Access": start-ups and small and medium-sized enterprises could thus access innovation services and infrastructure across Europe more easily. Adjusted guidelines will also help better utilize state funding instruments.

Strengthening Innovation Culture

The EU Start-up and Scale-up Strategy is an important signal for more start-up and innovation dynamics in the European single market: because a strong and growth-oriented start-up ecosystem also strengthens Germany as an economic location. Many of the measures promise noticeable relief for young companies – provided they are designed to be practical.

Their success will depend significantly on ensuring that new opportunities are not limited to individual companies. Instead, effective approaches must be made available to all businesses. Only then can the positive impulses impact the broader economy, enabling as many companies as possible to benefit from innovation-friendly conditions.