EU Inc, a new pan-European legal entity structure, has now been formally proposed by the European Commission. The aim is to simplify company incorporation, investment and acquisitions across the European Union. Streamlining compliance activities for high tech startup ventures is part of the drive towards making the continent more competitive globally.
In 2024 former Italian Prime Minister and European Central Bank president, Mario Draghi produced a landmark report on EU competitiveness. The central premise of the Draghi report was that Europe faces an “existential challenge” unless it undergoes radical economic structural transformation. Without reform, Europe may not be able to sustain or afford its social model, fulfill climate ambitions, or maintain strategic autonomy, he argued. As part of the remedy, Draghi proposed a legal framework that allows startups and innovative companies to opt into a unified set of EU-wide rules, bypassing the compliance burden involved in addressing the varying national laws across every member state.
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Known as the “28th Regime”, the initiative arose from lobbying by EU Inc, a group comprising dozens of high profile tech company founders and investors. The new regulatory structure will sit outside of the myriad of other commercial regulations found across the 27 states within the European Union (EU). It aims to create a “single rulebook” for digital services, energy contracts, or financial products, so companies are not required to “localise” their legal structure every time they cross a border. A key goal is to simplify partnerships between companies and universities across the continent. Widely applauded by European angel and venture investors, the ultimate objective is to stem the flow of innovative early stage companies that tend to uproot and head to the United States, where compliance (and consequently) capital-raising are more straightforward.
The proposal has been mostly well received by startup founders. However some commentators have pointed out that rather than offering a truly unified European legal framework, the proposal continues to pay deference to national jurisdictions, risking further fragmentation. However the low cost, 48 hour company setup goal and plan for a fully digital implementation has been widely celebrated. Trade unions have been less enthusiastic however, claiming the proposal puts worker rights at risk by legitimising U.S. style incentive plans rather than fully paid employment within startups.
The proposed policy was first announced publicly by European Commission (EC) President Ursula Von der Leyen within her 2026 Davos speech. With the legislative directive now in progress, implementation could be as soon as the end of this year. The move comes at a time when European investors are becoming increasingly bullish on deep tech and research based ventures. Additionally, the EC has a stated goal of smoothing out regional disparities so that more university spin-offs are generated outside of the main centres. How quickly the EC can actually activate these plans will surely be the first test of Europe’s capacity for systemic change.
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Image credit: European Commission
