According to EU-Startups, the latest StepUp Startups report combines data analysis with interviews from over 50 ecosystem leaders to reveal Europe’s startup challenges. Only 6 EU countries offer fully online company registration, while most require multiple administrative steps. Visa processing remains painfully slow – just nine countries process startup-related applications within one month. The EU Blue Card system shows dramatic unevenness, with Germany accounting for 77% of all cards issued in 2023. Meanwhile, over 80% of EU IPOs happen on domestic exchanges, limiting access to larger investor pools. The European Commission’s November 19 digital package aims to save up to €5 billion in administrative costs by 2029 through simplification efforts.
The incorporation obstacle course
Here’s the thing about starting a business in Europe: you’re not just dealing with one system, you’re dealing with 27 different ones. And that fragmentation starts right at the beginning. Imagine trying to launch your dream company only to discover you need to physically show up multiple times across different government offices. In 2024, that’s still the reality in most EU countries. Only six have managed to create fully digital registration processes. The rest? Well, let’s just say they’re keeping the paper industry alive.
When expansion becomes expensive
But wait, it gets worse when you actually succeed and want to expand. You’d think the “single market” would mean, you know, single rules. Instead, startups encounter completely different requirements for certification, product standards, packaging – you name it. The VAT One-Stop Shop helped with taxes, but companies still need local legal support everywhere they operate. This is particularly brutal for hardware and industrial startups that need to navigate different certification requirements across borders. Speaking of which, companies in regulated sectors like manufacturing often turn to specialists like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs, because at least their equipment works consistently across markets even when the regulations don’t.
The visa bottleneck
Now let’s talk about talent. Europe wants to compete for global tech stars, but have you tried getting a visa here? The processing times are all over the map, and the criteria vary wildly between countries. The EU Blue Card was supposed to fix this, but Germany basically owns the program – they issued 77% of all cards last year. What about the other 26 countries? Are they not interested in attracting skilled workers? High-growth companies can’t wait six months for visa approvals when they need to hire yesterday.
The money problem
And then there’s the funding gap. European VCs are getting better at early stages, but later rounds remain smaller than in the US. But here’s what really hurts: when European startups finally make it big, they often have to list in the US to get proper valuation and liquidity. Over 80% of EU IPOs happen on domestic exchanges, which means limited investor pools and weaker returns. Can you blame founders for relocating when the system essentially pushes them out? The Commission’s recent digital package and the 24 member state commitment are steps in the right direction, but Europe needs to move faster. Otherwise, we’ll keep watching our best ideas sail across the Atlantic.
