In the current political and economic landscape, the European Union must strengthen its competitiveness, close the innovation gap, and boost productivity, as highlighted in the Draghi Report on European Competitiveness.

Startups and scaleups play a central role in this effort but remain hindered by the fragmentation of legal and corporate frameworks across Member States, which creates barriers to cross-border growth within the single market.

In this context, the Letta Report on the Future of the Single Market called for a “Simplified European Company”, while the Draghi Report advocated for an EU-wide legal statute for innovative companies. The business community has likewise stressed the urgent need to reduce fragmentation and improve conditions for scaling and investment.

Against this background, the creation of “EU Inc.” emerges as a strategic response, providing a unified and predictable legal framework to support cross-border growth, innovation, and investment across the European Union.

The current reality, where with 27 national legal systems and more than 60 company legal forms in place, it can take a company weeks or even months to set up, slowing growth and raising costs and desensitizing investment and growth.

With “EU Inc.”, a single harmonized set of corporate rules would mean that companies no longer need to navigate multiple national regimes, unlocking the true potential of the single market, and driving growth and increased competitiveness.

The current reality, where with 27 national legal systems and more than 60 company legal forms in place, it can take a company weeks or even months to set up, slowing growth and raising costs and desensitizing investment and growth. With “EU Inc.”, a single harmonized set of corporate rules would mean that companies no longer need to navigate multiple national regimes, unlocking the true potential of the single market, and driving growth and increased competitiveness.

Key takeaways of EU inc. include:

• EU Inc. is not intended to replace national company law regimes. Instead, it is conceived as an optional, harmonized corporate framework available across the European Union, which companies may choose to adopt alongside existing national structures;
• The framework is designed to significantly simplify and accelerate the company formation process. Through fully digital and streamlined procedures, it will be possible to incorporate an EU Inc. within 48 hours, at a cost of less than €100, without minimum share capital requirements;
  
• EU Inc. also aims to support entrepreneurial dynamism by facilitating faster and more cost-effective business restarts. Simplified liquidation procedures will enable founders to test innovative ideas with reduced risk and, where necessary, to relaunch new ventures more efficiently;
• In order to prevent forum shopping practices, rules regarding labour and tax law continue to fully apply in the Member State where the company develops its activities, regardless of the Member State where the EU Inc. is incorporated.

Given its key importance for the EU’s competitiveness, the Commission is calling on the European Parliament and the Council to reach an agreement on the EU Inc. proposal by the end of 2026. The expected launch is set forth to Q1 2027.

For further information on this topic, please do not hesitate to contact the team at Ana Bruno & Associados, Sociedade de Advogados, SP, Lda.