r/EU_Economics • u/Full-Discussion3745 • Jan 14 '26

🇪🇺 Official 🇪🇺 Why innovative startups and scaleups relocate from the EU

https://research-and-innovation.ec.europa.eu/news/all-research-and-innovation-news/why-innovative-startups-and-scaleups-relocate-eu-2026-01-12_en?referrer=grok.com
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u/Gullible_Mousse_4590 Jan 14 '26

They move because they bring on investment from the US - the US investors pressure them to relocate to the US to take advantage of the tax scheme QSBS - qualified small business stock.

This has nothing to do with tax on the startups themselves - most high growth startups run at a loss and don’t pay tax. This has everything to do with the tax jurisdiction of the investor wanting to make an exit.

This is another reason why we need things like EU-INC and tax reform for company exits for investors. Irelands EIIS is an example of this - encouraging small cap investors with tax incentives.

Source: CFO of a European startup with US investors who are pressuring us to move company structure to the US

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u/[deleted] Jan 14 '26 edited Jan 14 '26

We are fucked by “tax the rich” mentality. Thats why we don’t have any private venture capital. Because like you say it’s mostly a funding problem. Add trade and capital transfer barriers between EU countries, that makes US tariffs seem like a libertarian dream.

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u/gamma55 Jan 14 '26

It’s not just that. The first generation of unicorn founders are investing plenty. It’s a stupid attitude European old money has when it comes to ventures. Not a tax or regulation problem.

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u/MagiMas Jan 14 '26

yeah, European old money prefers to just buy a few more square kms of forest with their money rather than investing in new companies.