As we approach 2026, the European business landscape is experiencing a profound transformation driven by regulatory innovation, technological advancement and shifting global economic dynamics. For companies considering European expansion, understanding these forces isn't just strategic — it's essential. Here's what the year ahead holds and how to position your business for success.
The Digital Operational Resilience Act (DORA) represents one of the most significant regulatory developments for financial services and their technology providers operating in Europe. Having come into full force in January 2025, DORA's impact will truly crystallize throughout 2026 as enforcement mechanisms mature and compliance expectations become clearer.
DORA fundamentally reshapes how financial entities approach digital operational resilience, mandating comprehensive frameworks for ICT risk management, incident reporting and third-party provider oversight. For tech companies serving financial institutions, this means your operational resilience is now your clients' compliance obligation.
In 2026, expect heightened scrutiny of cloud service providers, software vendors and data processors. Companies expanding into Europe should prioritize building robust incident response capabilities, establishing clear communication protocols for disruptions and implementing comprehensive business continuity planning. Be ready to answer questions of how you help these financial services orgs comply with DORA.
Europe's cybersecurity landscape in 2026 will be defined by the maturation of NIS2 (the Network and Information Security Directive), which expanded its scope to cover approximately 160,000 entities across critical sectors. Unlike its predecessor, NIS2 introduces personal liability for management bodies, fundamentally changing the C-suite conversation around cybersecurity investment.
For companies entering European markets, this regulatory environment creates both challenges and opportunities. The challenge lies in meeting stringent security requirements across supply chains — NIS2 explicitly addresses supply chain security, meaning your cybersecurity posture affects your customers' compliance status. The opportunity emerges for businesses that can demonstrate security excellence, as European enterprises increasingly view vendor cybersecurity as a key procurement criterion.
Practical steps for 2026 include implementing comprehensive vulnerability management programs, establishing incident notification procedures that align with a 24-hour initial reporting requirement and ensuring leadership teams understand their personal accountability.
Tech companies that treat cybersecurity as a strategic differentiator rather than a compliance burden will find European markets more receptive.
Europe's environmental regulatory framework continues to lead globally. Next year will see expanded enforcement of measures that directly impact how technology companies operate. The Corporate Sustainability Reporting Directive (CSRD) progressively extends to smaller companies, while the EU's Carbon Border Adjustment Mechanism (CBAM) increasingly affects imported goods based on their carbon intensity.
For tech companies, this means scrutinizing your entire value chain. Data centers — the backbone of digital services — face growing pressure to demonstrate renewable energy usage and operational efficiency. The EU's Energy Efficiency Directive sets specific targets for data center operators, and countries like Ireland and the Netherlands have introduced local restrictions on data center development due to energy concerns.
Hardware manufacturers and distributors must navigate the EU's circular economy initiatives, including right-to-repair regulations and extended producer responsibility schemes. The forthcoming Ecodesign for Sustainable Products Regulation will impose lifecycle requirements on a broad range of products, including electronics.
Companies expanding into Europe should conduct comprehensive carbon footprint assessments, establish transparent ESG reporting mechanisms and build circularity into product design.
Our client Eoliann is leading part of this green-first Europe initiative, as it provides AI-driven climate risk assessments, so you can be prepared.
The European tourism sector is undergoing a digital transformation that creates significant opportunities for technology companies. As international visitor numbers rebound and evolve, several tech-driven trends are reshaping how people experience travel across the continent:
For technology companies, the tourism sector offers diverse entry points — from infrastructure solutions for destinations to consumer-facing applications, from sustainability measurement to operational optimization. The sector's digital maturity varies significantly across markets and segments, creating opportunities for both cutting-edge innovation and practical digitization support.
Manufacturing dynamics
The evolving U.S. tariff landscape is creating compelling opportunities for companies willing to establish European manufacturing operations. For businesses evaluating their production strategy, 2026 represents a strategic inflection point.
The opportunity equation is straightforward: European manufacturing provides tariff-free access to 450 million affluent consumers while conferring local producer status — a distinction that increasingly influences procurement decisions. Europe's manufacturing renaissance, driven by semiconductor investments, electronics incentives and targeted industrial programs, is creating a sophisticated ecosystem with genuine competitive advantages.
Beyond market access, European manufacturing delivers critical strategic benefits. Companies gain geopolitical risk diversification and supply chain resilience at a time when both command premium valuations. For products subject to carbon border adjustments or containing critical materials, European operations transform regulatory requirements into competitive moats — you're already compliant while competitors calculate obligations.
The first-mover advantage is significant. Companies establishing operations now build supplier relationships and market credibility while others analyze scenarios. Early entrants position themselves as committed European players, capturing opportunities that will attract greater competition as the strategic logic becomes universally apparent.
But, like all things in European markets, relationships with both manufacturers and online and brick-and-mortar sales channels are essential.
As you plan European expansion, consider these priorities:
Build compliance into your foundation. Retrofitting compliance is exponentially more expensive than building it in from the start. Engage European legal and regulatory advisors early, and design your operational model with DORA, NIS2, GDPR and environmental regulations as core requirements rather than afterthoughts.
Invest in resilience as a differentiator. As digital operational resilience becomes table stakes, companies demonstrating superior capabilities will win larger contracts and premium pricing. Document your resilience practices comprehensively.
Embrace sustainability transparency. European customers and regulators expect detailed environmental reporting. Establish measurement systems now, even if you're not immediately subject to reporting requirements, as this data will become essential for procurement processes.
Think local, act networked. European customers increasingly prefer vendors with local presence, but this doesn't require massive upfront investment. Strategic partnerships, local hiring and distributed operational models can establish credibility while maintaining flexibility. An outsourced sales agency model is key as you test out markets.
Monitor the regulatory horizon actively. European regulations continue evolving rapidly. Establish mechanisms to track regulatory developments across your relevant markets and sectors, and build adaptive compliance capabilities rather than static programs.
Despite — or perhaps because of — its complex regulatory environment, Europe represents one of the world's most attractive markets for technology companies. The regulatory framework, while demanding, creates competitive moats for companies that invest in compliance and operational excellence. The emphasis on sustainability, security and resilience aligns with long-term business value creation rather than contradicting it.
Companies approaching European expansion with strategic intentionality, viewing regulations as guardrails rather than obstacles and building genuinely localized operations will find 2026 full of opportunity. The European market rewards quality, sustainability and reliability — characteristics that create enduring competitive advantages far beyond any single geography.
The year ahead will separate companies that view Europe as simply another market from those that understand its unique characteristics and build accordingly. For the latter group, 2026 could mark the beginning of a transformative European success story.
