The EU's Startup and Scale-up Initiative spans insolvency and tax simplifications and a $1.7bn pan-European venture capital fund of funds.

The European Union’s executive body has launched Startup and Scale-up Initiative, an effort to simplify the financial restructuring and tax filing process for startups as well as provide venture funding.

As part of its work to support tech startups in Europe and keep them in the single market, the European Commission has partnered multilateral lender European Investment Bank to launch a €1.6bn ($1.7bn) Pan-European Venture Capital Fund of Funds.

The Commission has also proposed a directive to improve the efficiency of the insolvency framework for all member states. At present half of all European businesses survive less than five years, and every year about 200,000 firms file for bankruptcy, resulting in 1.7 million direct job losses.

But under proposed rules, companies in financial hardship will be able to restructure early to prevent bankruptcy and avoid the need to shed employees.

Entrepreneurs whose startups have failed in the past will be offered a second chance to try a new business venture, as the new directive will fully discharge them of their debt after a maximum of 3 years.

In addition, the commission is planning to simplify the tax filing process for startups with a Common Consolidated Corporate Tax Base (CCTB).

CCCTB, which was originally proposed in 2011 and relaunched in October 2016, provides a single set of rules to calculate companies’ taxable profits in the EU, so that companies with cross-border units need to comply with just one rulebook rather than following multiple guidelines.

Other tax priorities include simplifying the EU value-added tax system and providing more guidance on best practice tax regimes to bolster venture capital investment in member states.

Elżbieta Bieńkowskacommissioner responsible for internal market, industry, entrepreneurship and small and medium-sized enterprises, said: “Today startups do not fully take advantage of the opportunities of the single market. Starting and scaling up a company across Europe has to become simpler.

Europe needs to become the first choice place for great business ideas to grow into successful companies. This is about new jobs, innovation and competitiveness for Europe.”