EU Inc. marks major win for startups as Commission unveils 28th regime proposal

EU Unveils Bold Plan for EU Inc. — A Single Corporate Framework to Supercharge European Startups

In a landmark move set to reshape Europe’s entrepreneurial landscape, the European Commission today unveiled its proposal for EU Inc., a pioneering single set of corporate rules designed to become the cornerstone of the EU’s 28th regime. This initiative, backed by over 22,000 signatories including Europe’s leading founders, investors, and the broader startup community, marks a decisive step toward eliminating the fragmentation that has long stifled innovation and growth across the continent.

The announcement comes as a direct response to the urgent call from the Draghi Report, which underscored the need for Europe to enhance its competitiveness by making it easier for innovative companies to scale within the EU. With 27 national legal systems and more than 60 company legal forms currently in place, European startups face a labyrinth of complexity that can delay company formation by weeks or even months, driving up costs and discouraging expansion.

EU Inc. is an optional, digital-by-default European corporate framework that promises to make it dramatically easier for businesses to start, operate, and grow across the EU. By providing a single harmonized set of corporate rules, companies can choose to bypass the maze of national regimes, unlocking the true potential of the Single Market. The goal is clear: to incentivize businesses to stay in Europe and encourage those who once looked elsewhere to return.

Create a Company in 48 Hours, Fully Online, from Anywhere in the EU

President Ursula von der Leyen delivered a powerful endorsement of the initiative, stating:

“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 making it drastically easier 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 beginning. Our goal is clear: one Europe – one market – by 2028.”

The Commission is calling on the European Parliament and the Council to reach an agreement on the EU Inc. proposal by the end of 2026, underscoring the initiative’s importance for the EU’s prosperity.

Main Features of EU Inc.

The proposal is packed with transformative features designed to streamline and empower European businesses:

• Faster Registration: Entrepreneurs, founders, and companies will be able to establish an EU Inc. company within 48 hours, for less than €100, with no minimum share capital requirement.
• Simpler Procedures: EU Inc. companies will only need to submit their company information once via an EU-level interface connecting national business registers. In a second step, the Commission will establish a new central EU register. Tax identification and VAT numbers will be obtained without resubmitting paperwork.
• Fully Digital Operations: Corporate processes will be digital by default throughout a company’s lifecycle.
• Helping Founders Restart Faster and Cheaper: EU Inc. companies will have access to fully digital liquidation procedures. Innovative startups will benefit from simplified insolvency procedures to facilitate winding down operations, enabling founders to try and test new ideas and start again if needed.
• Better Conditions to Attract Investment: The proposal removes in-person formalities, provides digital procedures for financing operations, and simplifies the transfer of shares. There will be no mandatory involvement of intermediaries for share transfers or liquidation procedures. Member States may also allow EU Inc. companies access to the stock exchange.
• Better Means to Attract Talent: EU Inc. companies will be able to set up EU-wide employee stock option plans, with taxation only on income generated once the option is sold—crucial for attracting talent, especially 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 EU Inc. companies are treated the same as any other national company.
• Strong Safeguards Against Abuse: National employment and social laws remain fully applicable to EU Inc. companies, ensuring the same protections as any other business under national company law. Applicable safeguards of the Member State of registration will apply in full, including rules on co-determination.
• Flexibility of Shares: EU Inc. companies will have the flexibility to create different classes of shares with varying economic or voting rights, helping founders protect their businesses against hostile takeovers.

Beyond Corporate Law: A Comprehensive Ecosystem

The Commission’s vision extends beyond corporate law. A new Communication outlines ongoing and future initiatives to complete the 28th Regime across other policy areas. This includes maximizing the digitalization of interactions between companies and public authorities, such as the European Business Wallet. The Communication also calls on Member States to consider setting up specialized judicial chambers or courts to handle EU Inc. company law disputes, ensuring effective, efficient, and uniform application of the 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. Measures for access to capital for startups and scaleups are also on the horizon, building on the Savings and Investment Union, a potential revision of investment rules for pension funds, and the upcoming review of the European Venture Capital Funds.

On taxation, the Commission has proposed a Head Office Tax (HOT) system allowing SMEs to apply tax rules of their home country. 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 remove additional administrative burdens for EU businesses.

Finally, the Commission is adopting a Recommendation on definitions of innovative enterprises, innovative startups, and innovative scaleups to ensure a coherent approach across the EU, providing certainty for companies, investors, and decision-makers.

Voices from the Startup Ecosystem

Jeppe Rindom, CEO and Co-Founder of Pleo, hailed EU Inc. as 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 small on the global stage. Combine this with recent geopolitical and economic events, the urgency for Europe to become more independent 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 faster expansion, lower costs, and greater ambition, with the fragmentation of planning growth across borders removed. We could’ve scaled faster, and taken on US competitors, with far less friction.”

He acknowledged that EU Inc. won’t solve every challenge—such as currencies, infrastructure, and cultural differences—but it 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, moving 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.”

Julian Teicke from BAD1, a community-led campaign founded by local founders, startup builders, investors, and ecosystem players with the goal of making Berlin the most builder-friendly tech city in Europe within the next 12 to 24 months, expressed cautious optimism:

“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 need real, borderless infrastructure to keep our best builders in Europe.”

Unions Warn of Potential Risks

Not everyone is celebrating. Oliver Roethig, Regional Secretary of UNI Europa, a European Labour federation representing 7 million service workers, voiced strong concerns:

“The European Commission originally floated EU Inc. to help 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 responded:

“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.”

What’s Next?

The Commission’s ambitious vision for EU Inc. is now in the hands of the European Parliament and the Council. If adopted, it could mark the beginning of a new era for European entrepreneurship—one where innovation, growth, and competitiveness are no longer hampered by national borders or bureaucratic red tape.

As the debate unfolds, one thing is clear: EU Inc. is more than a policy proposal—it’s a statement of intent. Europe is ready to compete on the global stage, and it’s putting its money where its mouth is.

Tags: EU Inc., European startups, corporate law, innovation, Single Market, digital transformation, entrepreneurship, EU competitiveness, Draghi Report, Ursula von der Leyen, Pleo, BAD1, UNI Europa, labour rights, cross-border business, startup ecosystem

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