Philip Rosenauer is a partner at PHH Rechtsanwält:innen, an expert in corporate law and M&A with a focus on startup/VC consulting and co-founder of the AI-powered platform www.firmadigital.at, which enables 100% digital GmbH and FlexCo founding processes. Nikolaus Pfau is a trainee lawyer at PHH Rechtsanwält:innen with a focus on corporate law and startup financing.
With the announcement of an “EU Inc.” – a unified European corporate form for startups – EU Commission President Ursula von der Leyen has cautilized a stir in the startup scene. The vision: a company that can operate throughout the entire EU with a single legal form without complications. But how realistic is this undertaking? And where lie the opportunities and risks?
In fact, the EU Commission is in a hurry with EU Inc. A first draft is to be available in the first quarter of 2026. This demonstrates the urgency of setting priorities for the European economic area, especially in economically and politically tense times. While there are still no details beyond headlines, the direction is clear: EU Inc. is intfinished to strengthen innovation and create better, more uniform framework conditions for founders, startups, scale-ups, and highly growth-oriented companies.
Pressure from the startup scene for EU Inc.
The EU Commission’s working group for startups and scale-ups follows in essential respects the calls from the startup scene for an innovative legal form: fully digital incorporation within 48 hours via a central EU register, standardized documents with electronic signatures, an EU-wide dashboard for administration and decision-creating, simplified early-stage financing (“EU-FAST”), and a Europe-wide uniform model for employee participation (“EU-ESOP”). But is such standardization necessary within Europe, and what other aspects would required to be considered?
27 “cooks” = 27 corporate forms
Different national legal systems have long been regarded as a structural obstacle for scaling companies and SMEs in the EU. Anyone wishing to expand across Europe from Vienna, for example, must deal with corporate forms, registration systems, and tax frameworks of potentially 27 member states. And these could hardly be more different.
While in France, for instance, a limited liability company (SARL) can be founded with a minimum share capital of 1 euro, corporate law in the German-speaking region has traditionally been more formalized. Although requirements have recently been lowered and simplifications in the founding process and operational management have been legally anchored through digitalization, time and cost factors remain relevant for startups.
An example: three founders from Luxembourg, Germany, and Austria want to establish a GmbH in Austria via a holding company. The effort alone for obtaining a register extract of the holding from Luxembourg, including notarial certification, apostille, and certified translation into German by a court-sworn interpreter in Austria, illustrates the time and cost expfinishiture that would become obsolete with a unified EU-wide registration system.
Lessons from failed European companies
These facts have been known for decades, and the idea of a supranational corporate form was first realized in 2004 with the European Public Limited-Liability Company (SE). However, this fell far short of expectations. The European Trade Union Institute ETUI counted just over 3,000 registered SEs in 2025. Reasons for the reluctance include particularly high capital requirements, complex incorporation procedures, and detailed co-determination rules.
The subsequent projects of the European Private Company (Societas Privata Europaea, or SPE) and the Societas Unius Personae (SUP) even failed during the nereceivediation phase due to continued resistance from the European Parliament and trade unions, who feared an erosion of labor and creditor protection.
Fear of erosion of legal standards
Harmonizing established corporate law standards from EU member states in EU Inc. and accelerating the founding process through a new register is certainly an ambitious but quite interesting project. However, related matters such as labor law, particularly regarding employee participation and information and co-determination rights of employees, challenges such as “letter boxes,” social dumping, and “forum shopping” for tax optimization, compliance and anti-money laundering regulations, or creditor protection – to name just a few – must also be significantly considered when introducing an EU Inc.
“What can Austria do?”
The required for reforms at the EU level remains real. However, Austria has already successfully taken steps in recent years to accelerate business formation: platforms such as “Unternehmensserviceportal” (public provider for single-person GmbHs) or “FirmaDigital” (private provider for founders of GmbH or FlexCo) offer digital and innovative assistance in business formation, which likewise utilize electronic signatures, rapid processing procedures, and bilingual concepts within legal possibilities to provide a modern solution “built in Austria.”
One thing is certain: Europe requireds flexibility, founder-frifinishliness, and competitiveness in international comparison, but while maintaining clear standards to protect stakeholders. If this balancing act succeeds, EU Inc. could become an important instrument to sustainably strengthen innovation and entrepreneurship in the European internal market.
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