Starting and running a new company is not easy. Cumbersome, expensive, and time-consuming administrative procedures often discourage potential entrepreneurs from setting up their own businesses. The European Commission's objective is to reduce the burden of administrative procedures and encourage more people to become entrepreneurs, create new jobs, and improve Europe's economic performance.
What is a start-up procedure?
The start-up procedure is a 'procedural cycle for a start-up that can be considered complete when a company is fully operational to develop its economic activities'.
Evidence shows that the less burdensome the administrative procedures for setting up a company are, the higher the rate of business start-ups is. Continuing with administrative simplification is therefore a top priority for the Commission.
- Start-up procedures have been taken up by the 2006 Council.
- In 2007, a dedicated expert group of start-up coordinators was established to monitor the progress made by EU countries in simplifying start-up procedures. Start-up procedures are also discussed by national SME envoys
- The small business act (2008) invites EU countries to simplify and reduce the administrative burden on businesses and to improve the quality of legislation.
- The May 2011 competitiveness council asked EU countries 'to reduce the start-up time for new enterprises to 3 days and the cost to €100 by 2012'.
- The Commission’s main role is to follow up on developments in EU countries, monitor them, publish results, and help exchange best practices.
- Progress report on start-up procedures in EU countries
- The entrepreneurship action plan adopted in January 2013 promotes digital and web start-ups.
Situation in EU countries
Even though the EU business environment has improved, progress remains uneven across different countries. While it is rather easy to establish a new company in some countries, the procedures are still lengthy and complicated in others.
In 2018 the average time to start a private limited company was 3.1 days and the average cost was €300. There was no change as regards the average time, it has remained the same as in 2017. The reduction of average cost was mostly due to a decrease in costs observed in Latvia, Cyprus and Greece.
Importance of entrepreneurship education
The first step to starting a business is to have the right entrepreneurial skills, knowledge, and attitude. Entrepreneurial skills can be built through informal learning and through formal education.
Support available to start-ups
- COSME programme (notably access to finance)
- Horizon 2020 for innovative companies
- EEN network
- Digital agenda for Europe – startup Europe
- Start-up Europe road show
- Structural funds – these have provided some €70 billion in support to enterprises, predominantly small and medium-sized enterprises (SMEs), by 2013. Nearly 200,000 projects that support SMEs were funded, including 78,000 start-ups. This helped create over 268,000 permanent jobs
- European Investment Fund and European Investment Bank
- SME week – as a platform for discussion and the exchange of views as inputs to policy making
- Study on EU country enterprise licence and permit times from 2014
- Commission study on business dynamics (impacts of licencing, transfer and bankruptcy procedures) (4 MB) (2011)
- Start-up procedures in EU countries
- Staff working document on start-up procedures under renewed Lisbon strategy for growth and jobs (164 kB)
- Video - coaching and business development for innovative start-ups