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Comment by pier25 | Hacker News Reader

> When you talk to most EU business owners, even in tech, the limiting factor isn't regulations.

I have a tech startup in Estonia and I agree. To me the biggest limiting factor is lack of funding.

The root cause of that is the lack of a true Capital Market union.

In the US, you can get VC across state borders and VC can invest in any US company regardless of their location. Not in the EU.

Investing in an Estonian startup from, say, the Netherlands is near impossible. And even if managed, now that NL investor has to repeat the entire process for Poland, Spain, Malta and other countries.

EU Made Simple explains this very well https://www.youtube.com/watch?v=1RqYws1JAuI

> Investing in an Estonian startup from, say, the Netherlands is near impossible

If anything this would be due to Dutch regulations rather than Estonian ones. So that would be more of a problem for setting up VCs in the EU rather than attracting capital in general, as the same would apply to the rest of the world. Is it easier for a US or Singapore VC to invest in an Japanese startup vs an Estonian startup? As far as I know the answer is a "no", but I'm happy to be proven wrong.

This is because there's no unified capital market.

A texas VC can invest in a startup in Chicago and a startup in Florida can raise money from NY and so on.

> If anything this would be due to Dutch regulations rather than Estonian ones

Yes, because there's no unified capital market. You describe an effect not the cause. With 27 member states, if such regulations are bi-directional, you'd need 351 of such "regulations". If one way, you'd need 702.

In the US with 51 states, there aren't a total of 1,275 "regulation contracts" between all states, there's one, and it's federal.

I don't think you understood my point. This "disadvantage" applies the exact same way to starrups every other non-US country, it's not something specific to the EU so it makes no sense to posit it as an EU thing.

> Is it easier for a US or Singapore VC to invest in an Japanese startup vs an Estonian startup?

This was my main question, and it looks like the answer is indeed no.

I indeed missed that point.

Still, the existence of the EU is (to bring peace by) lowering, mostly economic, barriers that traditionally exist between countries.

And the comparison in this threat was "between EU and US" (in europe Thing is hard... in Europe you cannot... etc). When people use "The EU" or "Europe" in this sense, they consider it as a "Single thing". Europe, or the EU, has a great disadvantage for startups over the US. You say that is because Europe is not a "thing" like a country is. I say, that is because Europe seen as a "thing" lacks some critical infrastructure that "the thing called US" has - or even "the thing Brazil" or "China" do have, internally.

Thanks for the video!

Yep, VCs don't exist here. Plus the absurd starting costs, it's like what, 20k to set up a GmbH?

2.5k EUR in starting capital, and two founders to start a a limited liability company (AB) in Sweden, and a 240 EUR processing fee: https://verksamt.se/starta-foretag/valj-foretagsform/aktiebo...

And you register online.

Depends on the country.

Opening a company in Estonia is very cheap but in Spain the manager/CEO needs to be an "autónomo" (like a self-employed tax status). This costs thousands of Euros per year. Something like 2,400-30,000 Euros per year, every year, forever.

And that's probably one of the big obstacles in the EU: there's no common ground for these things. At least this will hopefully be addressed: https://www.reuters.com/business/eu-propose-uniform-rules-st...

What does it matter that the rules for establishing differ per country? I'm only founding in one of them.

The article is unclear, but is probably referring to making it easier for startups to offer products in other EU countries.

The idea is to establish common rules to make it easier to register and move startups between countries, among other things.

It's in very early stages, so info is very scattered. More info, for example, here: https://www.loyensloeff.com/insights/news--events/news/the-2...

So what? There's no common ground in the US either, and it's not an issue there.

The ground is significantly more common than in the EU.

And that's just one of the problems (many of the problems have nothing to do with European bureaucracy)

The global ground is even less common. In that sense it's ironic to talk about this as if it's an EU issue. Non-EU/US countries are all completely separate. The EU has much more common ground amongst each other than the other 170 or so countries that aren't EU/US; in that sense, it's an advantage for EU startups compared to startups from the other 170 countries that aren't the US. Yet it gets positioned as this unique EU disadvantage, as "the reason why EU startups are 'behind'".

Not needed in the beginning. You can start an UG (mini GmbH) for 1 euro and then convert it into a proper GmbH later.

Technically yes, but it costs thousands per year for upkeep and again thousands plus 1-2 years of time to shut it down again.

In countries that have it. In Slovenia we have no such legal entity and so starting a business requires, at the very least, ~400€/month for a single proprietorship (unless you are already employed elsewhere already, then it's <100€) or even more for an LLC-type company (since it requires one fully employed person at a level above minimal wage).

After waiting 3+ months for the Finanzamt to respond.

I'm sure there's at least one US state where it's a pain to set up a company. So startup founders don't set up in that state but in Delaware, or recently maybe 1-2 ones. Germany is that state for the EU where it's a pain, so you set up your legal entity elsewhere.

You just need to pay 60€ or so for a business license and off you go. A GmbH (a corporate structure with limited liability, somewhere between an LLC and Corp) is not needed if you want to start a) now and b) for almost zero cost.

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