A common corporate structure could determine whether European start-ups scale at home or relocate abroad.
BRUSSELS, BELGIUM
Fifty European chief executives and investors have urged European Union policymakers to preserve the central elements of EU Inc, proposed legislation intended to make establishing and operating companies across the bloc simpler and less expensive. The signatories fear negotiations could produce a structure too limited to overcome Europe’s regulatory fragmentation.
The European single market allows goods, services, capital and people to move across borders, yet companies must still navigate 27 different corporate systems. Variations in registration, taxation, employment law and shareholder rules generate administrative costs that become particularly burdensome for young companies seeking rapid expansion. Many European start-ups consequently establish holding companies in the United States or move significant operations outside the EU.
EU Inc seeks to create a genuinely European corporate form that companies could use across member states. Its supporters compare the objective with the simplicity and legal predictability offered by the Delaware corporation in the United States. Investors from Index Ventures, Accel, Balderton, Atomico and EQT are among those supporting the appeal, alongside founders of prominent European technology companies.
The signatories want businesses to retain freedom to choose their registered office without being forced to locate all operations in the same country. They also oppose restricting EU Inc status exclusively to companies officially classified as innovative, arguing that scalable businesses emerge across many industries and cannot always be identified through administrative criteria.
Another central demand is the creation of a single authoritative European business register instead of a digital interface placed over existing national databases. The group also wants employees receiving shares or stock options to be taxed only when they acquire or sell the underlying assets, rather than when rights are initially granted. Labour protections would remain governed by the country where each employee actually works.
Critics of a broad system warn that unrestricted eligibility could overwhelm administrative institutions or allow companies to select jurisdictions offering the weakest oversight. National authorities and professional groups are also reluctant to surrender control over corporate registration and legal procedures. Any final arrangement will therefore need to simplify business expansion without creating opportunities for tax avoidance or weaker employment protections.
EU Inc is expected to advance before the end of the year as part of Europe’s wider competitiveness agenda. Its success will depend less on its name than on whether founders, employees and investors consider it more useful than existing national structures. A compromised framework that preserves most current obstacles could become another European initiative that exists legally but remains commercially irrelevant.
A single market cannot reach its potential while its companies remain divided by national barriers.