The Commission presents a proposal for EU Inc.: to unleash the full potential of the single market for European entrepreneurs

The European Commission today presented its proposal for EU Inc., a new, unified set of company rules that forms the cornerstone and starting point of the EU's 28th regime. EU Inc. is an optional, digital-by-default European company framework. It will make it easier for businesses to start, operate, and grow across the EU by incentivizing them to stay in Europe and encouraging those that have set their sights elsewhere to return.

Today, too many entrepreneurs and innovative companies find that expanding in the EU means navigating a fragmented legal landscape. European innovative businesses face 27 national legal systems and more than 60 different legal forms of business. This complexity can delay business start-up by weeks or even months, slow growth, increase costs, and discourage expansion.

EU Inc. is central to the Commission’s response to these challenges: presented as a regulation, it will provide a single, harmonized set of company rules that businesses can choose from instead of navigating multiple national regimes, thus enabling them to harness the true potential of the single market.

The Draghi report highlighted the urgent need to improve the EU’s competitiveness, in particular by facilitating the expansion of innovative businesses in Europe. Announced in the Commission’s policy guidelines for 2024-2029 and in President von der Leyen’s State of the Union address, the EU Inc. proposal aims to reduce fragmentation, boost EU competitiveness, and address the needs of innovative businesses.

Given its key importance to EU prosperity, the Commission is calling on the European Parliament and the Council to reach an agreement on the EU Inc. proposal by 2026.

Key features of EU Inc. include:

• Faster registration: Entrepreneurs and businesses can set up an EU Inc. within 48 hours, for less than €100, and with no minimum share capital requirements.
• Simplified procedures: EU Inc. companies will only need to submit their company information once, via an EU-wide interface connecting national business registers. In a second phase, the Commission will create a new central EU register. EU Inc. companies will not need to resubmit documentation to obtain VAT and tax identification numbers.
• Fully digital operations: Company processes will be digital by default throughout the entire business lifecycle.
• Helping entrepreneurs get back on their feet faster and at a lower cost: EU Inc. companies will have access to fully digital liquidation procedures. Innovative startups will have access to streamlined insolvency procedures to facilitate the winding up of operations. This allows entrepreneurs to test innovative ideas and start over if necessary.
• Better conditions for attracting investment: Today's proposal will eliminate in-person procedures, provide digital processes for financing operations, and simplify share transfers. The involvement of intermediaries will no longer be mandatory for share transfers and liquidation procedures. The proposal will also allow Member States to grant EU Inc. companies access to the stock exchange.
• Better means of attracting talent: EU Inc. companies will be able to establish employee stock option schemes at EU level. The stock option will only be taxed on the income generated after its sale. 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 to incorporate. The proposal includes a blacklist of prohibited practices to ensure that EU Inc. companies receive the same treatment as national companies.
• Strong safeguards against abuse: The proposal does not affect national social and employment laws. These will apply to EU Inc. companies in the same way as to any other company established under national company law. Applicable safeguards in the Member State of registration will apply in full to the EU Inc. company, including with regard to rules on co-management.
• Share flexibility: EU companies will have the flexibility to create different classes of shares with different economic or voting rights. This can, for example, help entrepreneurs protect their companies against hostile takeovers.

Furthermore, the Commission is adopting a Communication today outlining ongoing and future initiatives to complete the 28th regime in other policy areas.

The Communication proposes the maximum digitalization of interactions between businesses and public authorities, for example, through the European Business Portfolio.

The Commission will continue to explore the possibility of enabling innovative start-ups and scale-ups to allow their employees to work remotely from another country 100% across the Union under the upcoming Fair Work Mobility package.

The Communication also announces measures to facilitate access to capital for emerging and expanding companies, based on the measures of the Savings and Investment Union.A possible review of the rules on pension fund investment and the upcoming review of European venture capital funds are also on the agenda. Regarding taxation, the Commission has proposed a system of taxation at headquarters.which would allow small and medium-sized enterprises (SMEs) to apply the tax regulations of their country of origiFurthermore , the Enterprises in Europe: Framework for corporate tax initiative aims to establish a single regulatory framework for corporate tax across the EU.The next package of simplifications in direct taxation is expected to eliminate additional administrative burdens for EU businesses.

Finally, the Commission is adopting today a Recommendation on the definition of innovative companies, innovative start-ups, and innovative scale-ups. The Recommendation will promote a coherent approach across the EU to ensure better monitoring of EU business policies, providing certainty for businesses, investors, and decision-makers in the process.

The EU Inc. initiative is one of the key outcomes of the EU competitiveness agenda and a major initiative to help businesses, particularly start-ups and scale-ups, to innovate and grow in the single market.

EU Inc. does not replace national business frameworks. It is an optional, harmonized company framework available across the EU to all businesses.