EU Inc Proposal Seeks to Rival US in Innovation by Easing Startup Creation

EU Inc Proposal Targets Startup Growth with Fast Company Formation Across EU

European Commission's Plan to Boost Startup Competitiveness

By Philip Blenkinsop and A Lennon

Accelerating Company Formation Across the EU

BRUSSELS, March 18 (Reuters) - The European Commission proposed on Wednesday allowing firms to set up in as little as 48 hours and operate according to a single set of rules across the 27-nation EU in a bid to narrow the gap with the United States in innovative startups.

The proposal is part of a broader EU drive to improve the 27-nation bloc's competitiveness and avoid losing ground to the United States, where many European startups move to grow on a larger, unified market governed by a single corporate law. 

Targeting Innovative Startups

While the EU proposal to operate under a single set of EU rules is available to any European businesses, it is mainly aimed at new companies with innovative technologies to help them scale up.

Startup Growth Statistics: EU vs. US and China

The EU executive has said the European Union created more startups per year than the US from 2018-2023, but at the beginning of 2025, the EU had 110 unicorns - companies with a market value of $1 billion - compared with 687 for the US and 162 for China.

EU Inc: A New Corporate Entity

EU Entity Like Delaware LLC

The new "EU Inc" proposal, is designed to create a new EU-wide corporate entity, like a Delaware LCC in the United States, giving firms full access to the EU single market and avoiding the patchwork of 27 national corporate laws and more than 60 different forms that make creating a company run into months.

Reducing Bureaucracy and Encouraging Innovation

"We need to incentivise companies to stay in Europe and encourage those who once looked elsewhere to return,” European Commissioner Michael McGrath said. "Europe has the talent, ideas, and ambition - but too often, bureaucracy drives our best entrepreneurs elsewhere."

Registration Process and Projected Impact

Any business will be able to register online as an EU Inc, within 48 hours and at a cost of 100 euros ($115.22) and the  Commission foresees around 300,000 firms doing so in the first 10 years.

Benefits and Limitations of EU Inc

EU Inc firms will have access to the EU single market, more harmonised EU-wide employee stock option plans and simplified insolvency procedures, which might help attract investment. 

But they would still be subject in each EU country they operate to different national labour standards, taxation and other laws of the EU's 27 individual countries.

Commissioner McGrath's Perspective

McGrath recognised EU Inc was not a panacea.

"It will not resolve every issue, but it can make a very important contribution. It does need to be implemented and travel alongside all of the other reforms, particularly in the area of addressing fragmentation and removing the barriers in the single market," he said.

Legislative Process and Previous Initiatives

Approval and Historical Context

The proposal will require approval from EU governments and the European Parliament.

This is not the EU's first attempt to promote cross-border businesses, although previous initiatives foundered or were only for larger businesses, such as the 2004 creation of the Societas Europeaea (SE). Proponents say EU Inc will work because it is digital and because EU members recognise the urgent need to close the competitiveness gap.

($1 = 0.8679 euros)

(Reporting by Philip Blenkinsop and A Lennon)