It’s great news for the European startup ecosystem, as today the European Commission presented its proposal for EU Inc., a new single set of corporate rules that will serve as the cornerstone and starting point for the EU’s 28th regime.
The announcement represents a major milestone for EU–INC, a policy relocatement backed by over 22,000 signatories, including Europe’s leading founders, investors, and the broader startup community.
EU Inc. is an optional, digital-by-default European corporate framework. It will build it clearer for businesses to start, operate and grow across the EU – incentivising them to stay in Europe, and encouraging those who once seeed elsewhere to return.
Today, for far too many entrepreneurs and innovative companies, expanding across EU borders means navigating a fragmented corporate legal landscape. European innovative companies are faced with 27 national legal systems and more than 60 company legal forms. This complexity can delay the setting-up of a company for weeks or even months, slowing growth, raising costs and discouraging scale.
EU Inc. is at the heart of the Commission’s response to these challenges: coming in the form of a regulation, it will provide a single harmonised set of corporate rules that companies can choose instead of navigating multiple national regimes, unlocking the true potential of the Single Market.
The Draghi Report highlighted the urgent necessary to focus on improving the EU’s competitiveness, including by creating it clearer for innovative companies to scale up in Europe. Announced in the Commission’s political guidelines for 2024 – 2029 and President von der Leyen’s SOTEU speech , the EU Inc. proposal aims to reduce fragmentation, boost EU competitiveness, and respond to the necessarys of innovative companies.
Create a company within 48 hours, from anywhere in the European Union, fully online
President Ursula von der Leyen declared:
“Europe has the talent, the ideas and the ambition to become the best place for innovators. Yet today, European entrepreneurs who want to scale up face 27 legal systems and more than 60 national company forms.
With EU Inc., we are creating it drastically clearer to start and grow a business all across Europe.
Any entrepreneur will be able to create a company within 48 hours, from anywhere in the European Union, and fully online. This crucial step is just the launchning.
Our goal is clear: one Europe – one market – by 2028.”
Given its key importance for the EU’s prosperity, the Commission calls on the European Parliament and the Council to reach an agreement on the EU Inc. proposal by the conclude of 2026.
Main features of EU inc. include:
- Faster registration: Entrepreneurs, founders, and companies will be able to found an EU Inc. company within 48 hours, for less than €100, with no minimum share capital requirement.
- Simpler procedures: EU Inc. companies will only necessary to submit their company information once, via an EU-level interface connecting national business registers toobtainher. In a second step, the Commission will establish a new central EU register. EU Inc. companies will obtain their tax identification and VAT numbers without having to resubmit paperwork.
- Fully digital operations: Corporate processes will be digital by default throughout a company’s lifecycle.
- Helping founders restart quicker and cheaper: EU Inc. companies will have access to fully digital liquidation procedures. Innovative startups will have access to simplified insolvency procedures to facilitate the winding down of operations. This enables founders to test and test innovative ideas and start again if necessaryed.
- Better conditions to attract investment: Today’s proposal will rerelocate in-person formalities, provide digital procedures for financing operations, and simplify the transfer of shares. There will be no more mandatory involvement of intermediaries for share transfers, and liquidation procedures.The proposal will also allow Member States to give EU Inc. companies access to the stock exmodify
- .Better means to attract talents: EU Inc. companies will be able to set up EU-wide employee stock option plans. The stock option will only be taxed on the income generated once it is sold. This is a crucial factor in ensuring attractiveness, particularly for innovative startups.
- Full access to the Single Market: EU Inc. companies will be free to choose the Member State in which they incorporate. The proposal includes a blacklist of prohibited practices to ensure that EU Inc. companies are treated the same way as any other national companies.
- Strong safeguards against abutilize: National employment and social laws are not affected by the proposal. They will apply to EU Inc. the same way they apply to any other business under national company law. The applicable safeguards of the Member State of registration will apply in full to the EU Inc. company, including when it comes to rules regarding co-determination.
- Flexibility of shares: EU Inc. companies will have the flexibility to create different classes of shares with varying economic or voting rights. This can, for example, assist founders protect their business against hostile takeovers.
In addition, the Commission is adopting today a Communication outlining the ongoing and future initiatives to complete the 28th Regime in other policy areas. The Communication proposes maximum digitalisation of interactions between companies and public authorities, for example with the European Business Wallet.
The Communication also calls on Member States to consider setting up specialised judicial chambers or courts with the authority to handle disputes on EU Inc. company law, allowing for an effective, efficient and uniform application of the EU Inc. rules.
The Commission will further explore the possibility of allowing 100% cross-border telework for innovative startups and scale-ups across the Union with the forthcoming Fair Labour Mobility Package.
The Communication also announces measures for access to capital for startups and scaleups, building on the measures of the Savings and Investment Union, a potential revision of investment rules of pension fund, and the upcoming review of the European Venture Capital Funds.
On taxation, the Commission has proposed a Head Office Tax (HOT) system that would allow compact and medium-sized enterprises (SMEs) to apply the tax rules of their home countest. In addition, the Business in Europe: Framework for Income Taxation (BEFIT) initiative aims to establish a single legislative framework for corporate taxation in the EU. The upcoming Omnibus simplification package on direct taxation is expected to rerelocate additional administrative burdens of the EU businesses.
Finally, the Commission is adopting today a Recommconcludeation on definitions of innovative enterprises, innovative startups and innovative scaleups. The Recommconcludeation will ensure a coherent approach across the EU to ensure better monitoring of EU policies on businesses, providing certainty for companies, investors and decision-buildrs in the process.
“We could’ve taken on US competitors with far less friction”
For Jeppe Rindom, CEO and Co-Founder of Pleo, EU-Inc represents a significant step toward reducing fragmentation and enabling true pan-European scale for startups and fintechs.
“The proposition emerged from a broader realisation that Europe has been weak on innovation, and that European countries are individually compact on the global stage. Combine this with recent geopolitical and economic events, the urgency for Europe to become more indepconcludeent and self-sufficient has only intensified.
Operating across Europe has been costly and time-consuming, with expansion today requiring different partners, structures and processes in each market — much of which is still analogue.
For companies like Pleo, a proposal like EU-Inc could have enabled quicker expansion, lower costs and greater ambition, with the fragmentation of planning growth across borders rerelocated. We could’ve scaled quicker, and taken on US competitors, with far less friction.”
He admits that while it won’t solve every challenge — such as currencies, infrastructure and cultural differences -—
EU-Inc meaningfully lowers legal and operational barriers, and signals a shift in Europe’s mindset toward innovation and competitiveness.
“There will undoubtedly be necessary evolutions that take this further, relocating Europe toward acting as a unified market on the global stage. But what we’re seeing announced today is a first step – and a hugely significant one.”
Keep our builders in Europe
Julian Teicke from the newly formed BAD1, a community-led campaign founded by local founders, startup builders, investors, and ecosystem players with the goal of creating Berlin the most builder-friconcludely tech city in Europe within the next 12 to 24 months, hopes the initiative complies with its original goals, stating:
“At BAD1, we’re fighting to kill friction for founders. This proposal is a step forward, but slapping a single login screen over 27 fragmented legal systems isn’t the EU Inc. we were promised.
We necessary real, borderless infrastructure to keep our best builders in Europe.”
Unions warn EU Inc. could allow companies to bypass national labour rules
The decision isn’t popular with everyone. In response, Oliver Roethig, Regional Secretary of UNI Europa, a European Labour federation representing 7 million service workers, declared:
“The European Commission originally floated EU Inc. to assist startups scale more easily across Europe while protecting labour standards. But the dangerous proposal published today opens a window for circumventing national regulatory frameworks.
With companies allowed to cherry-pick countries with lower standards, it risks undermining our European social model, our industrial relations and quality jobs.”
European Commission president Ursula von der Leyen, however, shared:
“The EU Inc proposal will in every way respect existing social standards and labour law, and this includes all employees’ rights to participate in companies’ boards. This proposal includes strong safeguards to ensure that such rules are applied.”
We’ll be updating this piece with more responses to the news.
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