New company form EU Inc. aims to make startups fit for Europe faster
Startups wishing to operate across the EU have, until now, had to navigate a multitude of different regulations and legal frameworks. This complexity can delay a company’s entry into the market by weeks or even months. With EU Inc., the European Commission has now unveiled a model designed to enable companies to be set up within 48 hours.
The aim is a single market for startups
Ursula von der Leyen, president of the EU Commission, explained: “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.”
Faster registration: Entrepreneurs will be able to found an EU Inc. company within 48 hours, for less than 100 euros and with no minimum share capital requirements.
Simpler procedures: EU Inc. companies will only need to submit their company information once, via an EU-level interface connecting national business registers together. 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.
Faster and cheaper restart: 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 try and test innovative ideas and start again if needed.
Better conditions to attract investment: The proposal will remove 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 exchange.
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 abuse: 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, help founders protect their business against hostile takeovers.
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 end of 2026.
