Working Group Kicks Off 2025:
Entrepreneurship, Self-Employment, and One-Person Companies

Working Group Kicks Off 2025:
Entrepreneurship, Self-Employment, and One-Person Companies

On 27 May 2025, the SME Connect Working Group on Entrepreneurship, Self-Employment, and One-Person Companies held its first meeting of the year to address the key challenges faced by one-person companies and solo entrepreneurs. These included regulatory burdens, limited access to funding, and a lack of visibility and tailored support across the EU.

 1. The Forgotten Corner of Entrepreneurship: Microbusinesses, One-Person Companies and the Self-Employed

A key takeaway from the discussion was the continued oversight of one-person enterprises – namely microbusinesses, one-person companies (OPCs), and the self-employed – within both public discourse and EU-level policymaking. Although these solo entrepreneurs make up a significant part of Europe’s business landscape, they are often overlooked in the language, design, and implementation of SME-related policies and programs.

Participants noted that EU initiatives frequently focus on small and medium-sized enterprises with employees, often highlighting tech-driven scale-ups and internationally active SME leaders. In political and policy discussions, attention tends to concentrate on innovation champions or export-oriented businesses – leaving out the vast majority of SMEs that operate on a much smaller scale. Microbusinesses, one-person companies, and the self-employed – who together constitute the absolute majority of Europe’s SMEs – are too often left at the margins.

Many EU programs and regulations fail to reflect the daily realities and operational challenges faced by these micro and solo entrepreneurs. This oversight is not only structural, in terms of policy design and access to support, but also symbolic: the public language used in EU strategies – terms like “entrepreneur,” “start-up,” or even “SME” –rarely captures the independent, often informal nature of their business models. The discussion called for a more balanced and inclusive narrative that truly reflects the diversity of the European entrepreneurial landscape.

2. A Missing Foundation: Legal Recognition and Fragmentation

One of the root causes identified is the absence of a common EU definition for self-employment. This has led to fragmented national interpretations and inconsistent treatment across Member States. For many one-person businesses, this means navigating unclear or unequal access to support schemes, coping with varied regulatory frameworks, and facing difficulties in obtaining fair treatment under tax and social security systems.

Participants discussed the potential benefits of introducing a common definition and formally recognizing one-person companies as a distinct category at the EU level. Such a step could enhance legal clarity, facilitate cross-border activities, and allow for more tailored and accessible support measures. It could also help elevate the visibility of solo entrepreneurs within the broader SME strategy and ensure that their specific needs are no longer an afterthought.

However, the group also considered possible drawbacks. A rigid or narrow definition might unintentionally exclude certain forms of self-employment or limit national flexibility. There were concerns about the risk of reclassification effects, legal uncertainties, or added bureaucratic burdens if not carefully designed. Therefore, any attempt to define or categorize one-person enterprises must be handled with care, ensuring it adds clarity and support – without introducing new complexity.

3. Cultural Attitudes and Declining Youth Interest

Beyond structural issues, participants also explored cultural barriers. A striking concern was the declining entrepreneurial ambition among younger Europeans: fewer than 30% of people under 25 express interest in starting a business. This trend was attributed to widespread skepticism toward entrepreneurship, fear of failure, and a societal preference for stable, salaried employment. Cultural narratives too often paint entrepreneurship as risky or insecure – deterring youth at precisely the age when exploration and experimentation should be encouraged.

The group called for a proactive cultural shift. This includes integrating entrepreneurship education into schools and universities, encouraging experiential learning, and showcasing diverse and relatable entrepreneurial role models. By doing so, Europe can help demystify self-employment and rebuild confidence in entrepreneurship as a viable and fulfilling path.

4. Entrepreneurship as a Life Philosophy

Several participants underlined that entrepreneurship should not be viewed merely as an economic activity but as a way of life – an expression of independence, creativity, and personal initiative. Many solo entrepreneurs do not see themselves as businesspeople in the conventional sense, but as individuals pursuing meaningful work aligned with their values and lifestyles. For them, entrepreneurship is closely tied to self-fulfillment and purpose, not just profit.

This mindset often stands in contrast to conventional employment systems built around stability, predictability, and compliance. Participants argued that EU policy must learn to respect and accommodate this distinct entrepreneurial philosophy, rather than trying to fit it into traditional employment-oriented frameworks.

Importantly, self-employment should not be treated as a social problem to be corrected or a symptom of precariousness to be “saved from”. For the vast majority of micro and solo entrepreneurs, self-employment is a deliberate and empowering choice – a mode of work that reflects their desire for autonomy, creativity, personal growth, and flexible working conditions. It embodies a modern understanding of Selbstverwirklichung (self-realization) and individualized work styles that differ from – but are equal in value to –conventional career paths.

5. Gender Dynamics in Self-Employment

The conversation also revealed the gendered dimensions of self-employment. Many women, particularly during phases of caregiving or after job displacement, turn to self-employment not out of aspiration but necessity – seeking flexible schedules and autonomy. However, they often lack the systemic support to build long-term, resilient businesses. Structural gaps in maternity protection, social security coverage, and business development services can leave female entrepreneurs vulnerable and under-resourced.

Participants stressed the need for gender-sensitive entrepreneurship policies – designed to respond to these lived realities rather than applying one-size-fits-all solutions. This includes targeted financial instruments, better access to childcare, and recognition of unpaid care work as a legitimate barrier to economic participation.

6. Complementary Income Models: A Flexible Future

The group also explored the growing trend of “independent complementary income” models – where individuals retain salaried employment while testing entrepreneurial ventures on the side. This hybrid approach is increasingly attractive, particularly to young professionals, parents, or those transitioning careers. It offers a way to manage risk while gaining practical experience and building entrepreneurial confidence.

Participants emphasized that holding a second job or part-time job alongside a self-employed activity is not only a financial necessity for some, but also a conscious and empowering lifestyle choice for many. While public debate often portrays these dual roles as indicators of precarity, the discussion stressed the importance of also acknowledging their positive potential – including increased autonomy, skill diversification, and personal fulfillment. For many, this combination reflects a modern, multi-faceted approach to work and economic participation.

Yet current legal and tax systems across Europe often make such models difficult, discouraging dual-path entrepreneurship through rigid rules or excessive contribution burdens. Participants proposed the development of a European framework that formally recognizes and supports complementary income – treating it not as an exception but as a dynamic and legitimate form of modern entrepreneurship.

7. Pension, Social Security, and Health Insurance in a Mobile EU

National pension and social protection systems remain poorly adapted to the needs of self-employed individuals, micro businesses, and one-person companies – especially those with hybrid or fluctuating income models. A typical situation, such as working two years in one Member State and three in another, often leads to fragmented entitlements and gaps in coverage. These systemic shortcomings discourage mobility and undermine the EU’s principle of free movement.

In addition to pension insecurity, accessing health insurance – particularly after the age of 50 – presents growing challenges for solo entrepreneurs. Many face higher premiums, stricter conditions, or exclusion altogether due to age or irregular income streams. Current health insurance frameworks are often rigid and not suited to the evolving realities of independent work and ageing entrepreneurs.

To address these issues, greater EU-level coordination is urgently needed. This includes creating portable and flexible pension systems, ensuring cross-border recognition of contributions, and establishing fair, accessible health insurance models that cover all stages of entrepreneurial life. A modernised social protection framework would give entrepreneurs the confidence to pursue cross-border opportunities without risking their long-term security.

8. Simplification of Taxation and Access to Services in the Internal Market

Micro businesses, one-person companies, and self-employed individuals are disproportionately affected by complex taxation systems and rigid administrative rules. Often, taxes and social contributions are required even before income is generated, placing undue financial pressure on these actors at the earliest and most critical stages of business development. Simplified taxation models – such as income thresholds, deferred payment mechanisms, and startup grace periods – could offer immediate relief and promote sustainable entrepreneurial growth.

VAT obligations pose an additional and particularly burdensome challenge for those engaging in cross-border business. Differing national VAT regimes, inconsistent registration thresholds, and complex reporting requirements make it difficult for small and solo entrepreneurs to expand their activities across the EU. These barriers effectively limit participation in the internal market and stifle broader economic integration.

Addressing these issues requires not only simplification of tax regimes but also significantly improved access to high-quality advisory services. Publicly supported guidance and digital tools that help navigate both national and EU-level requirements are essential. Creating a more coherent, transparent, and entrepreneur-friendly tax environment would empower Europe’s smallest businesses to scale across borders and contribute more fully to the Single Market.

Conclusion: From Marginalization to Mainstream Recognition

The discussion underscored the urgent need to re-center Europe’s approach to entrepreneurship by including those most often left behind: microbusinesses, one-person companies, and the self-employed. These individuals form the economic majority but remain politically under-recognized and structurally underserved.

Addressing this blind spot requires more than legal definitions. It calls for a cultural shift, policy rethinking, and inclusive support systems that value the independence, adaptability, and contributions of solo entrepreneurs – regardless of size, gender, or starting point. Only then can Europe unlock the full potential of its most diverse and dynamic entrepreneurial base.

Looking ahead, we are preparing for the annual Summit on Entrepreneurship, One-Person Companies, Self-Employment, and the Future of Work, organized by SME Connect. The event will take place this September in Brussels.

Contact | t.viires@smeconnect.eu | Working Group Coordinator