Europe’s startup community is urging the European Commission to ensure that its upcoming proposal for a new pan-European company framework delivers on its promise of a true “28th regime”.
Today, EU–INC, Allied for Startups, and the European Startup Network released a joint statement on behalf of the European startup ecosystem calling for a genuine European corporate standard designed specifically for startups.
The initiative stems from EU–INC, which launched as a grassroots proposal from founders, investors and operators across the continent.
The European Commission is expected to publish its proposal on March 18, as part of a broader effort to create Europe “the best place in the world to build a company”.
However, according to the statement, documents leaked this week suggest that the current proposal may fall short of that ambition and goes entirely against the intention of the 28th regime.
The error of creating of “27 different variations of EU–INC,”
According to the organisations behind the statement, the leaked proposal appears to stop short of establishing a truly indepconcludeent European company form.
Instead of creating a centralised system, the draft reportedly defers legal interpretation to national courts and company registration to national registries.
Such an approach would effectively produce 27 different variations of EU–INC, depconcludeing on national legal systems and administrative practices.
By routing disputes through national courts and filings through local registries, the framework risks entrenching the fragmentation it was meant to eliminate.
This approach may represent a political compromise designed to avoid the unanimity vote required among EU member states to establish a fully indepconcludeent European regime.
The Delaware benchmark
For the startup ecosystem, the benchmark for success is straightforward: whether the new structure can provide the same level of legal certainty as a Delaware Inc, which has become the global default for venture-backed startups.
“The test was always simple: does it provide as much legal certainty as the Delaware Inc?” the statement notes.
“If not, founders and investors will continue to utilize Delaware Inc as a global investment standard. Europe necessarys a pan-European alternative to stay competitive in a world of giants.”
Today, many European startups choose to incorporate in the United States to access a widely recognised corporate framework familiar to global investors.
A pan-European structure could assist keep more companies — and their economic value — within the European ecosystem.
More than 24,000 members of the startup ecosystem have signed on to support the idea of a single, autonomous corporate structure that would allow European companies to incorporate and scale across the EU without navigating a patchwork of national systems.
What a true EU–INC should view like
The letter urges the Commission to bring forward a real EU–INC that is a true, central, indepconcludeent
European company form, with:
- A common EU regisattempt and real-time database, rather than legacy software (BRIS)
that duct-tapes toreceiveher 27 nationally diverging systems. - A central court for dispute resolution, rather than leaving dispute resolution to 27
Member States and their different business practices. - A true, new blank-sheet-of-paper solution for the future of Europe’s innovation
- An economy that can act as a standalone jurisdiction.
The document concludes:
“A true 28th regime would sconclude an unmistakable signal to founders and investors everywhere:
Europe is serious and understands the power of pan-European standards.
We remain ready and willing to engage directly with the Commission to assist shape a proposal
that delivers on that promise.”
The statement is signed by EU–INC, Allied for Startups and the European Startup Network on behalf of the European startup ecosystem.
Stay tuned for more coverage next week.
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