All is not well with the proposed EU Inc. There has been an urgent public appeal to EU leaders to save the initiative, warning that political compromises have effectively gutted the proposed ‘EU Inc.’ corporate framework.
In an open letter published on October 15, founders and investors argue that the initiative, originally designed to help European startups scale globally by creating a unified legal standard, has been reduced to a mechanism for "just fast incorporation".
"The EU Inc you championed - one that will enable Europe to compete at scale - no longer exists," the public statement read. The letter notes that months of negotiations have removed the core of the proposal, leaving a compromised framework that "will do nothing to improve Europe's competitiveness".
At the heart of the founders' frustration is a persistent structural disadvantage: American startups benefit from operating under a single, unified legal standard —often rooted in Delaware — while European founders must navigate 27 distinct, fragmented corporate legislations.
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To save the legislation, the startup coalition outlined five critical pillars to retain, emphasising the absolute necessity of "free choice of registration".
Founders insist they must be permitted to choose their state of incorporation without restriction, regardless of where their operations are based. “Without that free choice and mutual recognition, no standard will emerge - making the proposal pointless,” the letter stated.
A unified, cross-border framework for stock options is another major friction point. The coalition argues that stock options are a primary lever used by startups to recruit top talent and compete with massive US tech corporations. "Without a broad stock option framework, Delaware will remain the preferred choice for most fast-growth companies," the founders warned.
The founders' desperate appeal arrives on the heels of severe pushback from European trade unions, which have attacked the 'EU Inc' draft, claiming the so-called "28th company regime" lacks legal safeguards and would allow bad-faith actors to bypass national labour laws, collective bargaining agreements, and corporate tax obligations.
Addressing these labour concerns directly in their appeal, the startup coalition maintained that "EU Inc doesn't change" the fundamental reality that employees remain covered by the specific labour laws of the country where they actually work.
The founders stressed that registering a company in a different member state under EU Inc "does not diminish local protections or change where the company and its employees pay taxes".
If the broader 'EU Inc' initiative is ultimately killed by gridlock and union opposition, regional alternatives may rapidly gain momentum. Industry discussions have increasingly turned toward concepts like a 'Nordic.Inc' framework.
Given that legislation, governance standards, and business cultures across the Nordic countries already share significant similarities, establishing a regional single market for startups could serve as a highly functional, pragmatic fallback if a continent-wide 27-state agreement proves impossible.
For Europe's startup ecosystem, however, the current stakes feel existential. “If Europe's leaders cannot even align on a solution like EU Inc, Europe's founders will lose more than a proposal," the letter concluded. "They will lose faith in Europe's ability to face the challenges of our time”.
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