• "Small Business Act" for Europe
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Start-up procedures. An overview

There is evidence that heavy, expensive and time-consuming administrative procedures to start and run a small firm are a significant disincentive to too many would-be entrepreneurs and countries with lesser administrative burdens in the procedures required to create a company (cheaper and faster start-ups) have greater numbers of business start-ups.

In 1997 the Commission adopted a Recommendation proposing measures to accelerate and simplify start-ups.

In 2000 The European Charter for Small Enterprises included "Cheaper and faster start-up" as one of its ten action lines. The Charter not only asked Member States to take action in this area but also provided a forum for information and good practices to be exchanged between all participating countries.

In 2002 an EU commissioned a study benchmarking the then EU 15 Member States was published. The study presented the state of play in the different Member States, proposed measures and presented good examples to simplify and speed up business registration procedures. According to that study, the average time to start-up a company in 2001 in the EU 15 was 22 days and the cost € 827.

Based on all the collected evidence, the 2006 Spring European Council provided the main political impulse and asked Member States to take concrete steps to facilitate start-ups. The conclusions of that Council (point 30), state that:

"The Member States should establish, by 2007, a one-stop-shop, or arrangements with equivalent effect, for setting up a company in a quick and simple way. Member States should take adequate measures to considerably reduce the average time for setting up a business, especially an SME, with the objective of being able to do this within one week anywhere in the EU by the end of 2007. Start-up fees should be as low as possible and the recruitment of a first employee should not involve more than one public administration point."

In order to monitor progress the Commission asked all countries to appoint a representative to act as National Start-up Co-ordinator [43 KB] [42 KB] to liaise with the Commission. It also developed a document [164 KB] [164 KB] providing greater specificity on how compliance would be measured.

Efforts did not stop in 2007. In 2008 the Small Business Act retook these commitments and again asked Member States to speed up and reduce the costs of starting a company. It also asked that licenses, permits, authorisations required to start an activity should be shortened to a maximum of 1 month.

Administrative simplification will remain high in the political agenda of the EU during the foreseeable future and the Commission will continue tracking the progress of all EU 27 countries in simplifying and reducing the times and costs to start-up a business. Continuing with administrative simplification will ensure Europe can better realise its entrepreneurial potential, through removing one of the barriers to business creation.

Results

Measuring progress in times, cost and one-stop-shops for start-ups was fully embedded in the Lisbon Strategy for growth and Jobs in 2007. Progress was assessed on the basis of the information from regular meetings with the National Start-up Co-ordinators and the yearly National Progress Reports on the implementation of the Lisbon Strategy for Growth and Jobs.

In 2007 and 2008 both times and costs to start-up a business have been reduced in many countries. Also, most countries have established a one-stop-shop or equivalent arrangement even though in some cases they do not cover all types of companies. However, starting a business requires more than mere registration and there are still vast differences between Member States in terms of the number, cost and length of procedures required.

More detailed information on the main results for 2007 and 2008 is also available.

Start-ups in 2008 and beyond: The Small Business Act (SBA)

As a result of the successful developments in this area and also in recognition of the importance of this matter, the 2008 Commission Communication "Think Small First: A Small Business Act for Europe" again collects the issue of start-up procedures. In addition to invite Member States to continue reducing times and costs to start-up a company (as the 2006 Spring Council conclusions), the SBA adds a new element as it calls for simplification in the administrative procedures required to obtain licenses, permits and authorisations required for a company to be able to start operations.

In 2009 and 2010 the Commission will continue to track the progress of the Member States in all these areas and continue reporting through the yearly National Progress Reports on the implementation of the Lisbon Strategy for Growth and Jobs.