The EU Inc, an initiative to create a unified company structure for startups across Europe under a ‘28th Regime’, calls on new Commission to turn its ambitious plans into action.
Today, the initiative publishes the first version of a community-led industry blueprint for the upcoming 28th regime. The next step is getting feedback from the startup community before its formal submission to European Commission by January 2025.
It’s first step towards EU Incorporated was a petition started in October. It aimed to unite the will and voice of Europe’s most prominent tech leaders, VCs, and political figures over longstanding idea of single pan-European startup entity.
Less than two moths after, with 13,000 signatories, we can definitely say it succeded. Signatories include Europe’s leading founders from Stripe, Wise, Supercell, Wolt, Bolt and Pigment, hundreds of investors including Index Ventures, Atomico, Creandum, Seedcamp and Sequoia, and startup associations across the continent.
But win points don’t just come from the industry…
Political will is there, will there be any action?
Leading European political figures also voiced support for a new startup entity, including the President of the European Commission Ursula Von Der Leyen, and newly appointed Commissioner for Startups, Research, and Innovation, Ekaterina Zaharieva.
Zaharieva said she will propose a framework for the 28th regime in 2025, while Michael McGrath, Commissioner for Democracy, Justice and the Rule of Law also commented that he will prepare “a specific proposal on an EU-wide company legal status – a 28th regime – with a view to helping innovative companies grow”.
We have heard Von Der Layen on the topic as well: “… our (EU) companies still face way too many national barriers that make it hard to work Europe-wide with way too much regulatory burden.”
Now is the time to see if understanding and awareness of the issues will translate into solving them.
Policy proposal, from the industry
To help drive the change forward, the EU Inc grassroots movement publishes an industry blueprint for this pan-european entity. This document builds on prior documentations, including the recently published non-paper from France Digitale, and discussions with the startup community and with policymakers across the continent.
EU-Inc invites wider community input over the coming weeks, ahead of distribution of the final EU Inc policy proposal to the European Commission in January 2025.
Blueprint outlines how the new European Commission can unlock Europe’s potential as a startup powerhouse, introducing:
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- Standardized company structure: EU-wide company type with harmonized corporate governance, capital and share capital maintenance rules;
- Digital-first approach: Fully digital registry, dashboard, and standardized investment documents;
- EU-FAST investment: A new, standard, open source investment instrument inspired by convertible instruments such as SAFEs and BSA AIRs;
- EU-ESOP: EU-wide employee share option scheme with standardised rules.
These pan-European standardisations are critical to help European startups scale, attract talent and capital, and succeed on the global stage. More importantly, by reducing regulatory fragmentation and simplifying operational challenges, Europe can offer conditions that encourage innovators, entrepreneurs, and employees to remain within the continent.
“The European startup ecosystem is fragmented in national silos, competing globally isolated from each other,” said Andreas Klinger, Co-Initiator of EU-Inc.
“If we don’t act now, Europe risks falling further behind. We urge policymakers in EU Member States, and those in Brussels, to act with urgency and begin work on legislative proposals immediately.”
Third time the charm
As the problems aren’t new, so isn’t the dream.
The European Company (‘Societas Europaea’ or SE), a company established under EU law back in 2004, had sporadic implementation and use. Then back in 2008 there was an attempt to make a new ‘European Private Company’ (Societas Privata Europaea) as a voluntary 28th rulebook for all Limited Liability Companies in the EU. Its failure was due to Member States’ long-standing vetoes…
Why are Klinger, and his co-initiatiors Philipp Herkelmann, Simon Schaefer, and Vojtech Horna convinced this time the plan will work?
“Times have changed” since the European Private Company was proposed”, points Klinger.
“First, there’s much more political momentum now and a greater focus on European sovereignty. This is thanks to a mix of global competition and numerous and well-recognised geopolitical crises. We simply need more solutions that help Europe remain competitive – and EU-Inc is focused on that.
Second, we’ve been extremely mindful to exclude the most politically charged issues to make our proposal as ‘workable’ as possible. For example, we have not included tax harmonisation rules to prevent significant pushback.
Third, we have public momentum behind EU-Inc. From our early conversations with Member States, there is already interest in this – and of course as we’ve announced today, we’ve seen 13,000 signatories of our petition – including from some of the region’s leading brands.”
“If we don’t act now…”
Because of exisiting legacy, it is important to note that there is still underlying scepticism about whether EU Inc is achievable. Some fear EU Inc might bring even more bureaucracy. “That is the last thing we want”, commented Klinger for The Recursive.
“The purpose of this proposal is to cut down on it by moving from 27 different frameworks to a single EU-level corporate structure which is simple and easy to use, with minimal to no bureaucracy.
Of course, we recognise that the final policy proposal is not set in stone, which is why we are opening it up to the full ecosystem for feedback. We want to work closely with the EU on it too. That way, we can ensure the final recommendation reflects the needs of the European ecosystem, is something the community can get behind and – most importantly – is something leaders can use.”
To support the final push for implementation, EU Inc is calling on the wider startup community to actively engage and provide feedback on the proposal, before its formal submission to policymakers by January 2025.
“We remain ambitious and continue to work diligently with the community and policymakers to ensure the final proposal is fit for purpose, and achieves its ultimate objective”, concluds Klinger.
Dozens of people and organizations have already contributed, many experts from leading pan-European law firms, startup & VC associations, and a community of innovators.
Now its your turn.
