EU Inc. factsheet
‘EU Inc.’ is a new optional European company framework designed to make it easier for companies to be established and scale up in the European Union (EU), writes Grant Sweetman
What does ‘EU Inc’ propose to do?
It will provide a unified set of rules to standardise the process of setting up, operating and scaling a company across Member States, a key step in maximising free movement within the EU.
How will it support business?
It will support business through four objectives:
1. Faster, cheaper company setup.
2. Simple, digital, once-only submission of information.
3. Better tools to attract and retain talent.
4. Improved access to investment.
How will the proposal work?
• Faster registration: A company can be registered as an EU Inc. within 48 hours, for less than €100 and with no minimum share capital requirements.
• Simpler procedures: EU Inc. companies will only need to submit their company information once. 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.
• Helping founders restart faster and cheaper: EU Inc. companies will have access to fully digital liquidation procedures and innovative startups will have access to simplified insolvency procedures.
• Better conditions to attract investment: EU Inc. will remove in-person formalities, provide digital procedures for financing operations, simplify the transfer of shares and allow Member States to give EU Inc. companies access to the stock exchange.
• New ways to attract talent: 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.
• 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.
• Flexibility of shares: EU Inc. companies will have the flexibility to create different classes of shares with varying economic or voting rights.
Why is it being brought in?
With a market of 450 million people, the EU is the world’s largest trading bloc. However, different company laws across the 27 EU Member States create major barriers to expansion and growth. This regulation will reduce red tape and enable easier access to the Single Market and labour force, while making companies more attractive to investors.
What will the benefits be?
EU Inc. aims to improve access to the Single Market, foster innovation and attract investment without weakening the rules that protect workers.
Simplified insolvency procedures will facilitate entrepreneurship by lowering risk for founders. Additionally, Member States will be encouraged to establish specialised courts to handle business disputes efficiently to provide predictability.
When will it become law?
The proposal will now be sent to the EU Parliament and the Council (27 Member States). Once the Commission, the Parliament and the Council (Trilogue) agree a text, envisaged by the end of the year, the proposal will be ratified with a date then agreed for when it becomes law. It is intended that this proposal will be adopted as a regulation.
A “regulation” is a binding legislative act. It must be applied in its entirety across the EU and does not require transposition by each Member State. It ensures consistency throughout the EU.
