Allied for Startups' Position on the EU Single Market Strategy

The European Union stands at a crucial juncture: the Single Market must evolve to support a more competitive, resilient, and innovation-driven economy. Startups are central to this transformation. Allied for Startups supports reforms that simplify rules, harmonise regulation, and empower entrepreneurs to scale across borders.

Recognising Startups as Distinct from SMEs

Startups are not simply smaller businesses; they are defined by innovation and scalability. Yet EU consultations like the Call for Evidence fail to acknowledge this distinction. This contradicts the European Council’s 2024 conclusions, which stress the need to support both SMEs and startups. Policies must reflect the unique needs of startups to ensure their input and success are not sidelined.

Removing Cross-Border Barriers

Startups face major hurdles when expanding due to fragmented standards, tax rules, and labor laws. For example:

• A CE-certified product may still need additional approvals in other Member States.

• VAT complexity and national differences create compliance burdens.

• Varying professional qualifications and language demands limit hiring across borders.

Solutions include expanding the One-Stop-Shop VAT system, enabling mutual recognition of certifications, and introducing flexible, skills-based hiring frameworks.

Simplifying Regulation for Startups

Europe’s fragmented legal landscape slows down innovation. Startups often lack resources to navigate differing laws on labor, corporate structure, and taxation. Regulatory complexity delays growth and deters cross-border investment.

We call for:

• A unified EU framework for startups covering incorporation, IP, labor law, and tax.

• Regulatory “sandboxes” and a “ladder” model where compliance requirements grow with the business.

• Simplified, digital procedures and user-friendly support systems.

Enforcing Rules Fairly Across the EU

Startups face inconsistent enforcement of EU laws across Member States, leading to unfair competition. “Gold-plating” — when countries impose stricter rules than required — further disrupts the Single Market.

Dispute resolution is also slow and ineffective. Platforms like SOLVIT are advisory and lack enforcement power.

We propose:

• Centralised enforcement oversight and penalties for unjustified national rules.

• A fast-track cross-border arbitration mechanism.

• Strengthening SOLVIT with binding decisions and faster processes.