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Startup Hungary Foundation

SH

The aim of the foundation is to create, operate and grow as many internationally successful Hungarian startups as possible in Hungary.

Lobbying Activity

Response to 28th regime – a single harmonized set of rules for innovative companies throughout the EU

10 Jul 2025

Im writing as Managing Director of Startup Hungary, a grassroots NGO supported by over 40 of the countrys most successful scale-ups and post-exit founders. We represent the people building Europes next generation of companiesand we want to express serious concerns about the current 28th Regime proposal. Our position is informed by the reality we see every day: around 50% of Hungarian startups have already flipped or are preparing tomostly to the US or UK. Among post-Series A startups, practically all operate under foreign legal HQs. They dont want to leave Europe, but they have to in order to access capital, talent, and operational efficiency that the EU system doesnt provide. The 28th Regime, in its current form, doesnt solve thisit only reinforces the existing problems. The fundamental issue is that this proposal does not create a true pan-European legal entity. Despite the branding, its not a real 28th regime. Instead of introducing a single, harmonized legal layer above the 27 national frameworks, it creates yet another legal patchwork that will behave differently in each country. Member states will interpret, implement, and regulate it differentlyjust like they do now. So founders will continue to ask: Which country is best to incorporate in? Which national court will I end up in? Will investors recognize this structure as credible and scalable? This was supposed to end that ambiguity, not prolong it. We understand the reasoning behind avoiding tax and employment law changes for now. Thats a reasonable, pragmatic trade-off to gain momentum. But if this new legal form is still embedded inside the fragmented national systems, it will not be the neutral, borderless structure European founders desperately need. It wont reduce friction, and it wont stop flips. Whats frustrating is that the ecosystem already offered a better path. The original visionwhat many of us called EU Incwas developed by actual founders, investors, legal experts, and operators. It gathered over 13,000 supporters, including Stripe, Y Combinator, Wise, Sequoia, Atomico, Index, and every serious local ecosystem in Europe. That kind of alignment is rare, and it shows this wasnt just a wish listit was a well-thought-out framework rooted in operational experience. But the version of the 28th Regime thats currently being proposed ignores too much of that. Instead of offering a clear, optional, truly European structure, it introduces yet another layer that still sits on top of national law. Instead of removing complexity, it relocates it. Thats not bold policyits regulatory theater. Startups will not adopt this structure at scale. And if they dont, the initiative will fail to shift anything. We urge you to pause and listen to the people who brought the original idea forward. They have the trust of the ecosystem because they are the ecosystem. If the Commission works closely with themand builds something truly usable, truly borderlessit can still be a defining moment for Europes startup future. Were ready to support this, but it has to be real. If the final result is just another parallel legal form governed by 27 national interpretations, it will be dead on arrival.
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Meeting with Dóra Dávid (Member of the European Parliament)

29 Oct 2024 · Overview about the Hungarian startup ecosystem

Meeting with Isidro Laso Ballesteros (Cabinet of Commissioner Adina Vălean) and European Startup Network ivzw and BULGARIAN ENTREPRENEURS AND STARTUP COMMUNITY

25 Oct 2023 · Innovation and startups