START Program

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A government-backed entrepreneurship program providing non-reimbursable grants and mandatory training to support new business creation, with emphasis on young entrepreneurs and less-developed regions.
What are the main aims and objectives?

The START Program Romania aims to stimulate new business creation and reduce unemployment, particularly among young people and in less-developed regions outside Bucharest-Ilfov. The program addresses multiple barriers to entrepreneurship in Romania, including limited access to early-stage capital, high youth unemployment rates, and economic concentration in the capital city. By providing non-reimbursable grants of €40,000 to €50,000 per project along with mandatory entrepreneurship training, the program seeks to convert entrepreneurial intentions into tangible business ventures. Additional objectives include strengthening regional economic development by distributing entrepreneurial opportunities geographically, engaging Romanian diaspora members living abroad to return and establish businesses, increasing entrepreneurship among underrepresented groups including women and marginalized communities, and supporting businesses in strategic sectors such as information technology, manufacturing, food processing, renewable energy, and other innovation-focused industries. The program reflects Romania's commitment to diversifying its economy, reducing emigration pressures through employment creation, and aligning with European Union objectives for youth employment and regional cohesion.

How does the program work?

The START Program Romania operates through a structured multi-stage process combining eligibility screening, mandatory training, competitive business plan evaluation, and tiered funding disbursement.​

Eligibility and Registration

Aspiring entrepreneurs register on an online platform managed by the Ministry of Economy, Digitalization, Entrepreneurship and Tourism. Eligibility criteria include being at least 18 years old, holding Romanian citizenship or legal residency, having no prior business ownership (in most editions), and residing in an eligible region or belonging to a targeted population group. The diaspora track requires minimum 12 months residence abroad and demonstrated entrepreneurial competence.​

Mandatory Entrepreneurship Training

All eligible applicants must complete free entrepreneurship training courses provided by certified training organizations. Training includes minimum 40 hours of instruction covering business planning, financial management, marketing, legal aspects, digital skills, and sector-specific knowledge. Training completion is mandatory before proceeding to business plan submission.​

Business Plan Development and Competitive Evaluation

Participants develop comprehensive business plans addressing business concept, market analysis, operational structure, financial projections for at least two years, job creation estimates, and funding justification. Plans are evaluated by independent juries using standardized scoring criteria including business viability, innovation, financial feasibility, job creation potential, regional development impact, and alignment with national strategies. Projects are ranked competitively, and funds are allocated to highest-scoring applications until budget exhaustion.​

Funding Disbursement

Approved beneficiaries receive grants in tranches: 50% upon signing the financing contract, enabling business launch, and 50% upon project completion and compliance verification. Eligible expenses cover workspaces, equipment, machinery, vehicles, IT systems, software, training, consultancy, and working capital.​

Regional Implementation Structure

The program operates through a decentralized model with regional development agencies and designated managing authorities overseeing regional implementation. Training delivery occurs through a network of organizations and universities selected as administrators to enhance geographic accessibility.​

What is the overall cost?

The original 2017 edition allocated approximately RON 200 million (€43 million / $47 million USD). The 2018-2023 Romania Start-Up Plus program funded through the European Social Fund provided up to €40,000 ($43,400 USD) per project. The Diaspora Start-Up program allocated approximately €30 million ($32.6 million USD) with approximately 1,600 applicants.​

The fourth edition (2024-2025) represents the largest allocation to date at €450 million ($490 million USD), comprising 80% from European Union funds (Education and Employment 2021-2027 program and Recovery and Resilience Facility) and 20% from national budget. Individual grant sizes increased to €50,000 ($54,500 USD) per project, representing approximately 90% of eligible investment costs with 10% mandatory beneficiary co-funding. An additional €300 million ($327 million USD) was allocated for training provider services to deliver entrepreneurship

How was it implemented?

The START Program Romania was formally established in 2017 by the Romanian government through the Ministry for the Business Environment, Commerce and Entrepreneurship (later restructured as the Ministry of Entrepreneurship and Tourism). The program emerged in response to high youth unemployment, limited access to early-stage capital for micro and small enterprises, regional development disparities with economic concentration in Bucharest-Ilfov, and brain drain pressures affecting educated young Romanians.​

The initial program launched with grant amounts of up to RON 200,000 (approximately €43,000) per project using national budget funds. Subsequent calls were issued in December 2018 and October 2019 as demand demonstrated program effectiveness.​

Recognizing implementation challenges and broader policy objectives, the Romanian government implemented complementary EU-funded programs in parallel. In 2018, 195 organizations and universities were selected through a competition process as grant scheme administrators to manage grants and deliver training locally. The Romania Start-Up Plus program operated through the European Social Fund under the Operational Programme Human Capital, providing up to €40,000 per project to entrepreneurs of all ages. The Diaspora Start-Up program specifically targeted Romanian citizens living abroad, allocating approximately €30 million with around 1,600 applications from diaspora members.​

The original Start-Up Nation Romania program was relaunched in 2022 under similar conditions to the 2019 edition, incorporating lessons learned and adjusting to economic conditions. In August 2024, the Romanian government approved the fourth edition through an Ordinance, representing significant institutional commitment and expansion.​

Implementation Timeline

  • 2017: Original Start-Up Nation Romania program launched
  • 2018: Romania Start-Up Plus begins; 195 administrator organizations selected
  • 2020: Star Tech Innovation track launched for IT startups
  • 2022: Original program relaunched
  • 2024: Fourth edition approved with €450 million budget; digital platform launched in September with automated processing features
  • 2025: Fourth edition implementation continues with applications processed through October 2024 onwards
What impact has been measured?

Since the program's inception in 2017, the START Program and related initiatives have supported the establishment of over 14,000 businesses in Romania. The student-focused entrepreneurship component demonstrated strong outcomes, with students establishing 1,300 new businesses by end of 2023 that created more than 3,300 new jobs.

Approximately 1,600 Romanian diaspora members applied for the Diaspora Start-Up program with €30 million allocated. Survey research indicates 79% of surveyed diaspora members express significant inclination to start businesses in Romania.

What lessons can be learned?

Program Design and Accessibility Issues

  • The decentralized implementation model with 195 different grant administrators created uneven program delivery and quality variation across regions, with fund absorption rates of only 26.5%-34.7% indicating significant implementation barriers despite high demand.​
  • Multi-stage implementation phases (training selection → business plan evaluation → competitive ranking → funding → monitoring) created administrative bottlenecks and high overhead, with fixed timelines creating friction that prevented full resource utilization.​
  • Diaspora program design underestimated specific barriers including relocation costs and family adjustment needs, suggesting insufficient tailoring for program participants with distinct circumstances compared to domestic entrepreneurs.​

Structural Entrepreneurship Ecosystem Constraints

  • Romania's broader entrepreneurship ecosystem remains risk-averse, with only 21.4% of Romanian tech startups reporting development of actual innovations, indicating program grants do not automatically produce innovation-driven ventures.​
  • Geographic concentration of entrepreneurship persists in Bucharest-Ilfov and Cluj-Napoca despite program targeting of less-developed regions, suggesting financial incentives alone cannot overcome natural clustering dynamics and economies of agglomeration.​
  • Fund absorption rates of only 26.5%-34.7% reveal that administrative complexity constrains program effectiveness even when demand exists and funding is available.​

Business Sustainability and Growth Challenges

  • While 14,000 businesses were established, only 145 Romanian companies across all sectors achieved consistent profitable growth over 17 years (2008-2024), indicating that program support does not fundamentally alter broader business survival and scaling challenges in Romania.​
  • Venture capital ecosystem remains significantly underdeveloped, creating a "missing middle" where successful early-stage START Program businesses cannot access growth-stage financing needed for scaling beyond subsistence-level operations.​
  • Most START Program enterprises operate in traditional service sectors with low barriers to entry rather than high-innovation technology sectors, limiting contribution to innovation-driven growth objectives.​

Necessity vs. Opportunity Entrepreneurship

  • Many beneficiaries remain "necessity entrepreneurs" creating subsistence-level self-employment rather than "opportunity entrepreneurs" building growth ventures, suggesting program support does not fundamentally address underlying labor market conditions driving necessity entrepreneurship in less-developed regions.​
  • Key barriers to Romanian entrepreneurship including regulatory complexity, low ease of business formation, limited credit access, and weak intellectual property enforcement persist despite START Program support, indicating grants alone cannot overcome structural institutional barriers.​

Program Scalability and Adequacy

  • While training 14,000 entrepreneurs over multiple editions represents meaningful activity, this represents only a fraction of Romania's 20% of 18-24-year-olds classified as "out of school and out of work," suggesting program capacity remains limited relative to broader workforce development needs.​
  • Regional infrastructure gaps remain unaddressed, with most entrepreneurship support services (incubators, accelerators, business development services) concentrated in Bucharest, limiting support availability in less-developed regions where the program operates.​

Positive Implementation Innovations

  • The 2024-2025 fourth edition introduced technological improvements including AI-enabled administrative automation reducing 60% of procedural flow to "zero human intervention," suggesting institutional learning and commitment to addressing administrative efficiency challenges identified in earlier evaluations.​
  • The program's demonstrated adaptability across iterations (2017, 2018, 2019, 2020, 2022, 2024 editions) with increasing grant amounts (€40,000 to €50,000) and refined targeting mechanisms indicates institutional capacity for evidence-based refinement.​
  • Successful engagement of 1,600 diaspora members with €11.5-17 billion projected GDP contribution potential demonstrates that well-designed targeting can reach specific populations with distinct entrepreneurship potential and resources.

CURATED BY

Sarolta Borzasi

Director for Government + Investor Engagement
Embassy of Hungary London
United States