European Startups Face ‘Hard Mode’ as Calls Grow for Unified Business Rules

Brussels – A growing chorus of tech entrepreneurs are highlighting significant hurdles to building businesses in Europe, prompting a campaign for unified regulations across the European Union to better compete with the United States.

Lovable founder Anton Osika, whose vibe-coding company reached a billion-dollar valuation just eight months after launch, described building in Europe as “playing on hard mode.” Many startups struggle with differing national rules that slow operations, with Stef van Grieken of Cradle likening the process to “running through mud in clogs.” His company, which develops tools for organic chemistry, faced €70,000 in legal and accounting fees last year alone simply to establish entities in Switzerland, Holland, the Czech Republic, and Sweden. A recent Stripe report found that 93% of EU founders would prefer to incorporate in the US.

The challenges extend beyond incorporation, encompassing issues like stock option plans and banking access; van Grieken waited three months for a business bank account in the Netherlands, which only opened after securing funding. These difficulties echo a report last year from Mario Draghi, which stated that Europe had failed to realize its technological potential due to “inconsistent and restrictive regulation.” The EU is increasingly focused on technological sovereignty as geopolitical tensions rise and tech becomes a factor in trade disputes – a trend exemplified by companies like Mistral AI, positioning itself as a reliable European alternative to US-based AI providers.

A campaign dubbed EU-Inc, launched last October and now backed by over 18,000 signatures from European tech leaders, proposes a single set of EU-wide company rules, similar to Delaware in the US. The initiative submitted evidence to a European consultation that closed yesterday, with concrete proposals expected early next year. Osika believes “this is the decade where Europe can make a comeback,” and a more streamlined regulatory environment is crucial for attracting investment and fostering innovation.

Officials involved with the EU-Inc campaign say they will continue to work with the European Commission to develop and implement the proposed changes, aiming to create a more competitive landscape for European startups.