By Thaleia Lamprou
In a global environment marked by rapid change and intensifying competition, supporting startups and strengthening the competitiveness of the European market have become strategic priorities. Against this backdrop, the European Union is seeking to reshape its regulatory framework through new tools and schemes, with the proposed “28th regime” for startups at the centre of this effort.
What is the 28th regime?
The 28th regime aims to create a more unified and startup-friendly business environment for companies operating across more than one EU member state. Its core objective is to reduce the administrative and regulatory barriers that currently hinder cross-border growth.
Key features under discussion include:
- The possibility of fully digital company incorporation
- Fewer administrative requirements
- A single European corporate identity for startups
The framework also seeks to reduce the cost and time needed to launch operations, improve access to investment capital from across Europe and offer greater flexibility in business operation and scaling. If implemented effectively, it could significantly harmonise the regulatory landscape and facilitate cross-border entrepreneurship within the EU.
Legal form still under debate
The future of the 28th regime remains open, as discussions are ongoing at EU level. A critical issue is its legal form, namely whether it will be adopted as a regulation or a directive.
A regulation would ensure direct and uniform application across all member states, limiting regulatory fragmentation and creating a fully harmonised environment for startups. A directive, by contrast, would allow greater national discretion in implementation, but risks divergences that could undermine the goal of integration.
Concerns around tax competition, investor protection and fair competition underline the need for a careful balance between flexibility and regulatory certainty.
Strategic choices for Greece and Cyprus
Within this context, Greece and Cyprus are called upon to position themselves strategically. On the one hand, they must ensure that the new European framework does not lead to revenue losses or weaken national oversight. On the other, they need to capitalise on the opportunities offered by a more integrated market, strengthening the outward orientation and competitiveness of their innovation ecosystems.
Greece’s startup ecosystem has gained strong momentum, with more than 1,000 active startups and a growing presence in technology, energy, life sciences and agri-food. Investment levels continue to rise, exceeding €450 million in 2024 and €500 million in 2025, reflecting increasing investor confidence.
Why the 28th regime matters for Cyprus
The proposed regime is particularly significant for Cyprus. According to the European Innovation Scoreboard 2025, Cyprus is classified as a “Medium Innovator”, achieving around 84 percent of the EU average and ranking higher than Greece.
While the country’s most recent annual performance has declined, the long-term trend remains positive. Cyprus demonstrates strong performance in higher education, international research collaboration and trademark applications. However, it lags behind in key areas such as business R&D expenditure, access to venture capital and the commercialisation of knowledge.
Here, the 28th regime could act as a catalyst. By allowing Cypriot startups to operate effectively within a single European market, with common corporate and investment structures, it could reduce legal uncertainty and compliance costs that currently limit the attraction of international capital.
At the same time, it would facilitate European-scale growth, helping to bridge the gap between Cyprus’s strong research base and its still-limited commercial exploitation.
A role for the Cyprus EU Presidency
As Cyprus holds the Presidency of the Council of the European Union, it has an opportunity to actively promote the adoption of the 28th regime. Doing so would contribute constructively to improving the operating and growth environment for startup entrepreneurship, an area that aligns closely with Cyprus’s priorities at this juncture.
The author is a researcher specialising in startup entrepreneurship.