Aerospace Startups – Civilian or Defence First? A Quick Compliance Checklist

For startups, regulatory strategy can shape the entire business direction. Here are a few key questions to consider:

Which market path should I choose first: civilian or defence?

From a legal standpoint, starting with civilian applications is often simpler. Most consumer and commercial products fall under standard EU rules for product safety, data protection, and consumer protection. Entering the defence market early means navigating export controls under the EU Dual-Use Regulation, plus national authorizations which can be slow and costly.

A pragmatic approach is to validate your technology in the civilian market first, then layer on defence use cases.

What are the implications for attracting investment?

Some investors avoid defence-related technologies due to ESG restrictions, while others, especially defence-focused funds, actively seek them out.

Under EU law, if defence use is material to your business model, investors will expect you to have compliance policies in place, particularly export control screening procedures. Even a basic compliance framework can streamline due diligence.

What compliance requirements apply from day one?

If your product appears on the EU dual-use control list (e.g. certain cybersecurity, encryption, or surveillance tools), you’ll need export authorization for sales outside the EU. Even if not listed, the “catch-all” clause under the Dual-Use Regulation may apply if the product could be intended for military use in sensitive countries.

Startups must build in at least a minimal screening process such as know-your-customer and sanctions checks. Failing to comply, even unintentionally, can lead to export bans or reputational damage that are disproportionately costly for young companies.

Startups should map early whether their product could be classified as dual-use, set up a simple compliance framework (covering export controls, sanctions checks, and contract management) and decide strategically whether to pursue civilian or defence markets first. This preparation makes it easier to attract the right investors, avoid compliance pitfalls and scale sustainably.

Check Dual-Use Goods| Legal Guide for Defence-Ready Companies for full article.