Since a long period of time, Europe has been a business powerhouse of innovation, creativity, and talent. From outstanding scientific research to ever growing tech ecosystems, it has no shortage of successful and brilliant ideas. However, expanding and competing globally for various types of businesses, even after the ease from globalisation has been a big challenge for the continent. Why is that?
Recently, the European Commission President Ursula von der Leyen, at the World Economic Forum in Davos announced a great news for this challenge Europe is facing, stating that too much of Europe’s top talent is leaving because it’s simply easier to grow a company elsewhere. The main problem here being Fragmented funding conditions and regulatory barriers that make operating across the EU far more complicated than it should be.
The reality of scaling Business opportunities in Europe
The European Union was built on the promise of a unified nation market, where goods services can move freely across borders. For example, an entrepreneur in Milan should have the same growth opportunities as one in Paris or Berlin. However, in reality, scaling a business in Europe feels more like running a marathon with 27 different sets of hurdles wherein each country has its own corporate laws, taxation rules, labour regulations, and licensing requirements. Businesses constantly have the need to adjust to new legal frameworks, adding layers of complexity and costs that stifle growth, instead of expanding and growing seamlessly.
This challenge is particularly severe in the fintech sector and financial services industry, where raising capital across European borders is still a bureaucratic nightmare, with varying Know Your Customer (KYC) rules, prospectus requirements, and local securities regulations creating a fragmented and inefficient system. For startups and scale-ups, this isn’t just an inconvenience—it’s a fundamental roadblock to competitiveness, investment, and long-term success.
The 28th Regime: A Game Changer for European Business Environment
The concept of the EU’s 28th Regime, which has been debated for several years now, offers a standardized regulatory framework that companies can opt into instead of navigating 27 separate national regimes from Member States.
The EU recommitted to this approach in the recent Competitive Compass, acknowledging the urgent need for a truly unified business environment. Under the 28th Regime, businesses would be able to operate under a single set of rules across all member states, dramatically reducing regulatory friction and unlocking growth potential.
What Could This Mean for Fastest-growing European Companies?
Going Further: Electronic Securities and the Future of European Capital Markets
The 28th Regime isn’t just about reducing bureaucracy, but it is an opportunity to fundamentally reshape how capital is raised and traded in Europe. One of the most promising developments in this space is the rise of electronic securities. Germany has already taken a leading role here with the Electronic Securities Act (eWpG), which we use at NYALA. It allows entirely electronic shares and bonds and expanding this model across Europe under the 28th Regime would modernize European capital markets, making investments more liquid, and efficient.
Europe has the chance to create its own funding ecosystem, instead of mimicking Silicon Valley’s venture capital model, basically an ecosystem that allows broader investor participation along w9th embracing digital finance. Shervin Pishevar, a US Investor recently highlighted this trend, highlighting how crucial it is to democratize access to investment opportunities. By integrating tokenized assets within a harmonized regulatory framework which works for all Member States, Europe could leapfrog its competitors and attract global investors, entrepreneurs and enthusiasts looking for a more digitally transparent and scalable funding environment.
Now is the time to act!
By eliminating the barriers that hold back high-potential companies, The 28th Regime isn’t just another regulatory initiative, but it can definitely act as a catalyst for Europe’s economic future. Europe can create an environment where businesses, small businesses regardless of size or location can dream big, scale fast, and compete globally.
What we need now is the right framework to ensure that our best ideas grow here in our continent and we don’t need to go elsewhere for them. It’s time to make Europe the best place to scale a business and make an ideal condition of not just a Berlin, Milan or Paris based companies but European based Companies!
