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• European Commission publishes strategy on scaleups and startups
• European Parliament’s JURI Committee releases draft report on sustainability omnibus
• Progress towards an EU 28th regime: key insights from European Parliament’s workshop

Commission publishes strategy for start-ups and scale-ups

The European Commission (EC) has released its EU start-up and scaleup strategy Communication a non-legislative roadmap outlining planned initiatives to support smaller business across the Single Market. For example, the document indicates the following:

• in Spring 2025, the EC will review the definition of “undertaking in difficulty” to enable a broader range of entities to potentially benefit from state aid measures
• in early 2026, it will propose the so-called 28th regime, providing a single set of rules for companies. It would include an EU corporate legal framework, based on digital-by-default solutions, and will help companies overcome barriers in setting up, scaling up and operating companies across the Single Market. To do so, it will simplify applicable rules and reduce the cost of failure, by addressing specific aspects within relevant areas of law, including insolvency, labour and tax law. It will also explore the possibility of enabling companies to establish in Europe more rapidly, ideally within 48 hours
• also in early 2026, the EC will introduce a common EU definition for start-ups, scaleups and innovative companies, aligned with the recently proposed definition for small midcaps (see May SME Update for more details on the latter)
• by mid-2027, the EC will develop a framework for intellectual property (IP) valuation for IP-backed financing in cooperation with the European Union Intellectual Property Office (EUIPO). It will also expand the evidence base to develop concrete IP finance instruments

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JURI Committee organises workshop on 28th regime

The European Parliament’s (EP) legal affairs (JURI) Committee held a workshop titled “the 28th Regime: a new legal framework for innovative companies”.

The workshop focused on numerous aspects of the future 28th regime, as announced in the EC’s recent Single Market Strategy (see May SME Update) and the Strategy on Scaleups and Start-ups (see article above).

Discussions covered the need for such a regime, obstacles that hindered similar past initiatives in the past, what it could cover, how to enable simplified registration of companies and what legal basis it could be based on. The participants also exchanged on which types of companies should be able to use it.

The EC provided an update on its ongoing work on the proposal, currently expected for March 2026. The EC is planning to issue a public consultation soon – likely before the summer break period – seeking views on the issues raised during the workshop. However, the EC highlighted that certain challenges and legal constraints may limit what can be achieved at the EU level.

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MEP Warborn’s draft report outlines changes to sustainability omnibus

The EP’s lead negotiator on the sustainability omnibus, MEP Jörgen Warborn (EPP, Sweden), published his draft report proposing further changes to the EC’s initial proposal on 12 June. As a reminder, this omnibus amends notably the Corporate Sustainability Reporting (CSRD) and Due Diligence Directives (CSDDD) with the aim of decreasing administrative burdens for companies.

From an SME perspective, key proposed changes include:

• increasing the scope threshold of companies under CSRD and CSDDD to 3000 employees
• aligning some of the terminology between the two legislations, such as proposing CSRD’s “value chain” to be replaced by CSDDD’s “chain of activities”
• limiting information requests for companies below the 3000 employee threshold, instead indicating that in-scope companies should rely on reasonably available information (e.g. public, or one obtained during past cooperation), unless there is evidence of likely adverse impacts
• recommending the EC establish a free, one-stop-shop digital reporting portal
• proposing a stronger focus on risk-based prioritisation in due diligence, and introducing exceptions to the obligation to suspend business relationships under CSDDD

Next steps include a presentation of the report in the JURI Committee on 23-24 June, with a deadline for other MEPs to table amendments by 27 June. On 14-15 July, JURI will organise a meeting to discuss these amendments. In parallel, Member States in the Council are aiming to reach a general approach agreement on 24 June.

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European Commission provides update on state of play of the 28th regime initiative

• Question by MEP Oihane Agirregoitia Martínez (RE, Spain)
• Reply by Commissioner McGrath

European Commission explains what measures it is taking to support SMEs with the EU Cyber Resilience Act

• Question by MEP Dimitris Tsiodras (EPP, Greece)
• Reply by Executive Vice-President Virkkunen

IFAC seeks input from SMEs on sustainability and publishes sustainability reporting tool for small businesses

The International Federation of Accountants (IFAC) recently launched two initiatives to support SMEs’ sustainability reporting.

Firstly, IFAC published a Small Business Sustainability Checklist, which is an interactive tool designed for use by SMEs and their advising accountants. By working through this checklist, the user can establish a framework to assess their current position and track progress across environmental, social responsibility, and governance initiatives.

Secondly, IFAC together with the Edinburgh Group has launched a survey inviting SMEs to indicate the extent to which sustainability-related information is being prepared by SMEs, used by SMEs in internal decision-making, or provided to supply chains, lenders, or other stakeholders. The deadline for responding is 30 June.