The Urgency of Transforming European Entrepreneurship

The symptoms are well known: entrepreneurship in Europe struggles to turn ideas into products and scale companies in a global landscape dominated by markets such as the United States and China. The European Commission has identified the main obstacles: lack of scale, bureaucracy, and difficulties in access to funding and attracting and retaining talent.

Despite accounting for 18% of the global economy, Europe attracts only 8% of global startups, and a significant number of successful startups born in Europe end up relocating to the United States in search of greater private investment and global growth.

It is urgent that we change this trajectory, or we risk seriously undermining the EU’s technological sovereignty and competitiveness.

In this context, on May 28th, the European Commission presented the EU Startup and Scaleup Strategy, a key step towards the necessary transformation of entrepreneurship in the EU.

The new strategy is structured around five pillars: fostering an innovation-friendly environment; improving access to funding; facilitating market entry and business expansion; attracting and retaining top talent; and ensuring access to infrastructure, networks and services.

Portugal stands out as an early and effective adopter of several measures in these areas. With around 4,700 identified startups (Informa DB, Dealroom, 2024), representing between 12% and 15% of the total across the EU — in a country with less than 2% of the EU population — the Portuguese ecosystem is recognised for its maturity, dynamism, and international ambition. In 2024, the number of startups grew by 16%, and investment reached €448 million — a 134% increase compared to the previous year.

Let us take a closer look at the five pillars of this new strategy, and how Portugal is well placed to align with them. Following the Commission’s logic, I will also address them in five key points:

• Leadership and Strategic Alignment with the European Union

Startup Portugal has served as the operational arm of public policy for entrepreneurship in Portugal and is fully aligned with the Commission’s new strategy. Portugal is one of the few Member States with a strong and coordinated commitment to entrepreneurship, represented by a single entity that brings together the interests and challenges of various stakeholders in the ecosystem. Since 2023, Portugal has also had a Startup Law, which provides legal definitions for startups and scale-ups, enabling the design of targeted public policies — a clear demonstration of institutional readiness and capacity to contribute actively to the implementation of this European agenda.

The EU’s ambition is to increase competitiveness and the ability to retain both talent and capital. Portugal is already making strong strides in this direction and is ready to extend its best practices and experiences to the broader European context.

• Simplification and Regulatory Harmonisation

International expansion is one of the main challenges faced by startups, particularly those from smaller markets like Portugal. Often, “scaling” means not only entering new markets but also having to “start from scratch” in legal and fiscal terms in each new jurisdiction — a process that consumes time, resources, and energy.

Portugal has made progress in simplifying company creation, with initiatives such as “Empresa na Hora”. However, bureaucracy remains a significant challenge — acknowledged by the Prime Minister himself, who declared a “war on bureaucracy” during his inaugural speech on June 5th, 2025.

In this context, the “28th Regime” proposed within the EU Startup and Scaleup Strategy represents a structural and transformative step forward. A truly European supranational regime that allows companies to operate seamlessly within the single market could be a game-changer for survival and scale. Freeing startups from the need to comply with 27 different legal systems means more entrepreneurs can focus on what really matters: hiring skilled talent, developing products, and gaining customers — instead of spending precious resources on legal teams to ensure minimum compliance.

I have high expectations for this measure. Its effective implementation is critical to making the single market genuinely accessible to startups — not just to large corporations that can afford the cost of navigating European complexity — and to attract more investment.

• Strengthening Access to Finance and Venture Capital

Access to capital remains one of the biggest barriers to scaling. Portugal should play an active role in the Scaleup Europe Fund and the Innovation Investment Pact, using instruments such as Banco Português de Fomento and public venture capital funds.

There is also untapped potential in European pension funds, which should begin to diversify their investments to include startups and scale-ups through venture capital — a structural opportunity that will require both cultural and regulatory change.

• Talent, Stock Options and Mobility

Portugal already has a highly competitive stock options regime, introduced with the Startup Law in 2023 and enhanced in 2024 through the new Tax Incentive for Innovators and Innovation Creators (EFICI). The continued evolution of this framework should consider European harmonisation efforts and could serve as a model for other countries.

There is also room to revise and strengthen the Startup and Tech Visa programmes, creating more agile and effective mechanisms to attract international founders and tech talent. At the same time, we must keep promoting academic careers focused on knowledge transfer and research commercialisation — key to generating innovation with real economic impact.

• Data, Definitions and Measuring Impact

A harmonised definition of startups and scale-ups is essential for the success of the European strategy. Portugal has been leading this debate, thanks to its legislative experience and active participation in the Europe Startup Nations Alliance (ESNA).

We are also developing a new national platform to map the startup ecosystem, which will be integrated into the European Startup & Scale-up Scoreboard. This platform will provide data on financial size, regional impact, sustainability and social value — enabling evidence-based policymaking.

Aligning the European Scoreboard with national representative bodies, such as Startup Portugal and its counterparts in other Member States, is crucial to ensuring statistical detail and informed political action.

Portugal has both the potential and the know-how to lead and inspire this new cycle of startup policies in Europe. However, to make that happen, we must continue doing more and doing better — not only by identifying challenges but by offering practical, structured solutions based on the experience and innovation already demonstrated on the ground.

Startup Portugal is ready to take on a leadership role in implementing the new EU Startup and Scaleup Strategy, as a strategic partner to European institutions to help to test and operationalise measures, ensure coherence between national and EU-level policies, and make sure that the Portuguese ecosystem actively contributes to the urgent transformation of European entrepreneurship.