Europe has everything it needs to become a global leader in technology and innovation. The continent is home to highly educated talent, strong universities, growing startup hubs, and an increasingly mature investment market. Yet European startups continue to lag structurally behind their American counterparts not due to a lack of ambition, but because of a fundamental problem: Europe is fragmented.
Where a startup from California can expand and raise capital across all fifty U.S. states with minimal friction, European founders encounter national borders the moment they seek to scale internationally. Different legal forms, divergent investment structures, and complex regulations make pan-European scaling unnecessarily costly and slow. The EU–INC (European Incorporated Company) aims to provide a structural solution to this problem.
What is the EU–INC (European Incorporated Company)?
EU–INC is a proposal for a single pan-European legal form for startups and scale-ups, also referred to as the “28th regime.” This regime functions as a virtual European legal layer on top of the existing 27 Member States.
The objective of the EU–INC is not to replace national legislation, but to provide startups with one uniform legal foundation that allows them to operate directly within the European Single Market. This reduces legal complexity and lowers the barriers to cross-border growth.
The core elements of the proposal include:
- One pan-European legal entity for startups
- One central EU-wide registration
- Standardized investment documentation
- EU-wide harmonized employee stock option plans (ESOPs)
- Preservation of national tax and labor law
Why a European startup legal form is necessary
The current fragmentation of European regulation constitutes a structural competitive disadvantage. Startups seeking to operate across multiple EU countries must deal with:
- Differing incorporation requirements
- National differences in shareholder structures
- Complex rules on employee participation
- High legal and administrative costs
This runs counter to the reality of modern technology companies, which operate internationally from day one. Without a pan-European startup legal form, European companies will continue to fall behind competitors from the United States and Asia.
At the political level, awareness of the need for reform is also growing.
In October 2024, European Commission President Ursula von der Leyen stated:
“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, and way too much regulatory burden.”
This statement underscores why the EU–INC is not merely a startup initiative, but a strategic economic priority for Europe.
EU–INC and the 28th regime: from idea to policy
What distinguishes the EU–INC from previous attempts at European harmonization is that the proposal has now become part of the formal policy process in Brussels. The initiative has been developed in collaboration with leading startup legal teams, investment funds, and founders from across Europe.
To date, the following steps have been taken:
- Submission of the proposal to the European Commissioner for Justice
- Involvement of the Startup Commissioner
- Establishment of a dedicated working group within the European Commission
- Expressed interest from the European Parliament and the European Council
Within Brussels policy circles, the EU–INC is now explicitly regarded as a serious implementation of Europe’s 28th legal regime.
Conclusion: EU–INC as the foundation for a European startup market
The EU–INC offers Europe a unique opportunity to structurally overcome legal fragmentation and create a single integrated market for startups. The proposal is concrete, politically relevant, and broadly supported within the ecosystem. Europe has the talent and the ambition. With the EU–INC, the rules of the game can finally become European as well.
