The EU Inc. Proposal Is Finally Here - But the Real Work Starts Now

Yesterday, on 18 March, the European Commission released its EU Inc. proposal, an announcement Europe’s startup ecosystem has been waiting for. The proposed “28th regime”, a pan-European single corporate form, is the result of more than a year of consultation with member states and the startup community.

It is a big step for startups in Europe.

For the first time, the Commission is putting forward a concrete framework to move closer to a true single market for startups and scaleups. It also sends a clear signal: founder needs are finally moving closer to the centre of Europe’s policy agenda.

But once you look more closely at the proposal, one thing becomes clear: This is a starting point, not the final solution. In startup terms, it is a minimum viable product.

Let's dive into it.

What the EU Inc. proposal actually does

The idea behind EU Inc. is simple: make it easier to start and scale companies across Europe, closer to the experience founders know from Delaware in the US. The proposal introduces a new European legal form alongside existing national company structures. It includes several features founders have been asking for for years:

Speed and cost

Founders will be able to set up a company within 48 hours. While this is still behind leading digital-first countries like Estonia, it represents a major improvement across most member states. Incorporation costs are capped at €100, with no minimum share capital.

Digital-first and once-only

Registration is designed to be fully online and centrally accessible, building on existing infrastructure such as BRIS and a European Unique Identifier. The “once-only” principle means key information should be submitted once and reused across authorities, supported by tools such as digital certificates and a potential EU business wallet.

Talent and ESOPs

Winning the race for talent remains critical for startups. The proposal introduces a common EU framework for employee stock option plans, with harmonised deferred taxation of capital gains so that employees are taxed when value is realised, not when options are granted.

Investor-friendly framework

The proposal supports flexible shareholder structures and digitised capital operations throughout the company lifecycle. Share transfers and capital increases can be handled more easily, reducing reliance on notarial processes that currently slow down financing rounds. An English-first approach reduces friction for international investors and employees.

These are strong steps. They would make starting and scaling a company in Europe significantly faster and easier, and they have the potential to make the continent more attractive for both founders and investors.

Where the EU Inc. proposal falls short

We welcome the proposal. But we are also clear about what it is: The EU Inc. proposal is a minimum viable product.

It delivers important core features:

• Speed
• Lower costs
• Digital processes
• Better ESOP conditions

But it does not yet deliver a fully integrated European system.

The biggest limitation remains legal fragmentation. The proposal introduces a harmonised legal form, but it does not fully unify company law across member states. National systems will continue to play a major role, particularly in areas such as corporate governance, insolvency and procedural rules. Most importantly, dispute resolution will remain largely national. This means that the same EU Inc. company could face different interpretations depending on the jurisdiction. For founders and investors, this creates uncertainty. And legal certainty is one of the key reasons why many still choose jurisdictions like the United States.

There are additional gaps. A truly central European register is not part of the first step, but only planned for a later stage. The proposal builds on existing systems like BRIS for now. While this is a sensible starting point, it still feels more like a connected network than one unified system. A true 28th regime needs more than a shared entry point. It needs a shared system of interpretation and enforcement.

Without a more unified approach to dispute resolution, there is a real risk that EU Inc. remains closer to a coordinated registration framework than a fully functional single market instrument for startups.

The real work begins now

With the proposal now on the table, the focus shifts to what comes next. The European Parliament and the Council will determine whether EU Inc. becomes something founders actually use or just another well-intentioned legal option.

For us at AustrianStartups, the priorities are clear:

• Protect what works: speed, low costs, fully digital processes and founder-friendly ESOP taxation
• Strengthen legal certainty, especially through more predictable and coherent dispute resolution
• Build the missing infrastructure, including a visible and truly centralised register layer
• Focus on usability, ensuring founders, employees and investors can use EU Inc. in practice without unnecessary complexity

We believe this is the moment to stay ambitious. If Europe wants to compete globally, this cannot become another compromise that works on paper but fails in practice.