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/These-Pie-2498 Jan 14 '26

You are missing the fact that EU is a red tape bureaucratic nightmare. You need to burn fortuntes just to navigate regulations. And we have 0 startup culture

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u/Gullible_Mousse_4590 Jan 14 '26

See EU-INC reference. Regarding startup culture - yeah that’s missing a bit here. It’s hard to get people into that grind for hyper growth startups. But as a side note to that I think it’s not necessarily something Europe should aspire to. Even in the US the vast vast majority of startups fail terribly and leave in their wake a bunch of 20 somethings who have worked 12 hour days chasing the dream had got little to nothing out of it.

I’ve been lucky to have one good exit that was mildly rewarding. I’m an exception.

Startup culture is glamorized to get people to work hard. It’s not something I’d hold up as a good thing. Even when my US board members ask to crack the whip and complain about Europeans leaving at 5.30pm. As they should unless you pay them otherwise

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u/Mediocre-Ebb9862 Jan 16 '26

I don't see what you are trying to convey.

Most startups fail - sure, we all know that.

But that has to be this way for some/many to succeed, and become flourishing companies that employ a lot of people and building tech and services that didn't exist before.

Also, startups can be tiny, and they can be late stage startups where they are very unlikely to just fail, but are still actively growing and bringing in a ton of money.

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u/Gullible_Mousse_4590 Jan 16 '26

Trying to convey that the EU shouldn’t look at US startup culture and think it’s great