In a significant move towards unifying Europe’s startup landscape, the grassroots initiative EU-Inc has collected over 13,000 signatures from prominent tech leaders, venture capitalists, and political figures, urging the European Commission to create a single pan-European startup entity under a ‘28th Regime‘ in the 2025 Work Programme.
This ’28th Regime’ aims to streamline cross-border operations, enhance competitiveness, and foster innovation across the European continent.
The EU-Startups team is in full support of this initiative. In fact, we’ve been advocating for a new European and startup-friendly legal entity form since more than six years now. Our suggestion was to ceate a “EU Limited” or Eltd as a legal entity which would be able to move its headquarters freely within EU borders and be taxed on a EU level. The EU-Inc concept goes into this direction, and we’re excited to see this new grassroots initiative pick up speed.
The EU-Inc initiative proposes the establishment of the ’28th Regime’ as a standardised company structure for startups that would harmonise corporate governance, capital requirements, and share capital maintenance rules across EU member states. A digital-first approach is central to this vision, featuring a fully digital registry, a unified dashboard, and standardised investment documents to simplify administrative processes for startups operating in multiple countries.
A key component of the proposal is the introduction of the EU-FAST investment instrument, an open-source tool inspired by existing comparable instruments like the US’ SAFEs (Simple Agreement for Future Equity) and France’s BSA AIRs (Bons de Souscription d’Actions – Accord d’Investissement Rapide). This EU-FAST would be designed to standardise and expedite investment processes across Europe, making it easier for startups to secure funding.
Additionally, the EU-Inc blueprint advocates for the creation of an EU-wide Employee Share Option Scheme (EU-ESOP) with standardised rules. This scheme aims to attract and retain talent by offering employees consistent and transparent equity opportunities, regardless of the country in which they operate.
Overall, the proposal has received endorsements from leading European founders, including those from Stripe, Wise, Supercell, Wolt, Bolt, and Pigment. Hundreds of investors, such as Index Ventures, Atomico, Creandum, Seedcamp, and Sequoia, along with startup associations like Allied for Startups, European Startup Network, France Digitale, German Startup Verband, Dutch Startup Association, Roma Startup, and Techleap, have also expressed their support.
Leading European political figures have also shown support for a new startup entity.
European Commission President Ursula von der Leyen has included the ’28th Regime’ for innovative companies in the Political Guidelines for the EU Commission. She emphasised the need to remove national barriers that hinder startups from operating seamlessly across Europe, stating, “A startup from California can expand and raise money all across the United States. But our companies still face way too many national barriers that make it hard to work Europe-wide with way too much regulatory burden.”
Ekaterina Zaharieva, Commissioner for Startups, Research, and Innovation, has announced plans to propose a framework for the ’28th Regime’ in 2025, aiming to “help innovative companies grow and benefit from a simpler, harmonised set of rules throughout the Union.”
Similarly, Michael McGrath, Commissioner for Democracy, Justice, and the Rule of Law, commented: “As a flagship initiative, I will prepare a specific proposal on an EU-wide company legal status – a 28th regime – with a view to helping innovative companies grow.”
Andreas Klinger, Co-initiator of EU-Inc, highlighted the risks of inaction: “The European startup ecosystem is fragmented in national silos, competing globally isolated from each other. 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.”
The proposal’s blueprint builds upon prior documentation, including a recently published non-paper from France Digitale, and incorporates insights from discussions with the startup community and policymakers across Europe.
As Europe faces increasing competition from global tech hubs, the successful implementation of the EU-Inc proposal could position the continent as a leading destination for innovation and entrepreneurship. The collective momentum from the tech community and political leaders reflects the shared recognition of the need for structural reforms to ensure Europe’s competitiveness on the global stage.
As the European Commission prepares its 2025 Work Programme, the inclusion and implementation of the EU-Inc proposal could mark an important step towards a more unified and dynamic European startup ecosystem.
Read the orginal article: https://www.eu-startups.com/2024/12/eu-inc-calls-on-new-commission-turn-the-idea-of-a-single-pan-european-startup-entity-into-reality/
