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Small and medium-sized enterprises (SMEs)

Simplification of start-up procedures.

Europe needs more enterprises. One significant barrier to more entrepreneurs has been the time taken and the costs involved in the administrative procedures to start up and run a small enterprise.  In 2006, the Council set a number of ambitious and concrete targets to facilitate start-ups throughout Europe before 2008. In 2008 these commitments were taken up and renewed by the SBA and the December 2008 Competitiveness Council with a set of wider and more ambitious targets.

Man working at a desk

There is evidence that heavy, expensive and time-consuming administrative procedures to start and run a small firm are a 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.

Based on this evidence and building on the Comission efforts and initiatives since the mid 1990's the 2006 Spring Council asked Member States to take concrete and decisive steps to simplify the processes to start-up a business

2011 Commission study on "Business Dynamics": measuring the impact of (licensing procedures - non-efficient transfer of business - bankruptcy/insolvency procedures and lack of support for a second chance) on job creation and business births in Europe

Presented in February 2011 the study “Business Dynamics: Start-ups, Business Transfers and Bankruptcy” analyses the macro-economic impact of start-up, business transfer and bankruptcy legal and administrative procedures on entrepreneurship in Europe. Its aim is to identify the main problems faced by entrepreneurs along key instances of the business life of a company: start-up/licensing procedures, transfer of business, bankruptcy and second chance. Moreover, the study explores potential solutions and propose policies that may be recommended to increase the ease of doing business and eventually the number of entrepreneurs in Europe.

The study covers the current national practices in 33 European countries affecting key moments of a company's life cycle: licensing, transfer, insolvency and re-birth with the final goal of analysing what are the key problems in each of these areas and their impact in terms of companies, jobs or GDP loss.

The study is available here pdf - 4 MB [4 MB]

In 2013 average time and cost to start-up a private limited company was 4.2 days and cost was €315.

The reduction in average times is due mostly to simplifications implemented in Greece, Spain, Latvia, Finland, Cyprus and the UK.
The reduction in average cost is due mostly to simplifications implemented in Greece, Latvia, Lithuania and Austria. 

From 2011 target cost to start-up a company: €100

The conclusions of the Competitiveness Council of 31st May 2011 included a call to Member States "to reduce the start-up time for new enterprises to 3 days and the cost to €100 by 2012". Under these new benchmarks the aggregate situation of Member States in relation to the 3 objectives earmarked for administrative simplification for start-ups are:

 

Number of Member States

 

Accomplished

Not accomplished

One-stop-shop

20

7

Time

12

15

Cost

7

20

3 countries comply with all three objectives: Denmark, Romania and Slovenia.

5 countries do not comply with any of the objectives: Czech Republic, Germany, Greece, Latvia and Slovakia.

For more details including the country by country performace table please refer to the link "Progress in 2013" on the left of this page 

Start-up procedures – evolution and historical background

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