The 28th Regime: Advancing a Real Single Market for Startups
The European Union has long been celebrated for its vision of a unified single market, yet for many startups and small businesses, the promise of seamless cross-border operation remains largely unfulfilled. One persistent barrier is legal fragmentation. Navigating 27 different legal systems often turns scaling into a costly and bureaucratic burden.
The concept of the 28th regime, first articulated in a 2010 opinion by the European Economic and Social Committee (EESC), offers a practical solution: create an optional, pan-European legal framework that businesses can choose to operate under, without disrupting the sovereignty of national legal systems. In light of current EU policy priorities—from the Startup and Scaleup Initiative to the Capital Markets Union—this proposal is not only relevant, but urgent.
An option European Framework to Complement National Systems
Rather than replacing national laws, the 28th regime would create a parallel legal system covering key areas such as company law, labor law, taxation, insolvency, and contract law. Crucially, participation would be voluntary. Businesses could opt in to the EU-wide legal framework, benefiting from legal certainty and administrative simplicity across all Member States.
For startups in particular, the impact could be transformative. A single legal regime would allow them to incorporate and operate under one consistent set of rules, rather than adapting to different national requirements as they expand across borders. This would reduce legal costs, speed up time to market, and encourage cross-border activity from the earliest stages of growth.
A tool to support startups scalability in Europe
Europe continues to face challenges in helping startups transition into scaleups. Many promising ventures move operations outside the EU due to the complexity of operating in multiple jurisdictions. The 28th regime could reverse this trend by offering a streamlined legal path to scale within Europe.
This approach is especially relevant for startups in sectors like digital technologies, climate innovation, and artificial intelligence—areas where time-to-market and regulatory agility are critical. By removing legal friction, the EU would not only enhance its competitiveness but also support a more resilient and connected innovation ecosystem.
From Legal Theory to Policy Action
While the idea of the 28th regime has circulated for over a decade, it has recently gained renewed attention. The European Commission is currently examining structural reforms that would make it easier for innovative businesses to scale across borders. As part of this, the Commission is exploring ways to provide startups with access to a “European Legal Entity” option that aligns with the principles of the 28th regime. This is not merely a theoretical exercise. Such a regime could be a key building block of a more integrated startup policy, complementing financial instruments like the EIC Accelerator and regulatory initiatives under the Digital Services and AI Acts.
The 28th regime represents a strategic opportunity for the European Union to strengthen its internal market, empower startups, and reinforce the global relevance of European innovation. By offering an optional, coherent legal path for doing business across borders, the EU could finally turn the vision of a true single market into a lived reality for its most dynamic enterprises.
As Europe seeks to lead in the global innovation race, the time to operationalise the 28th regime is now.
