EU Inc: Unified Startup Legal Form | IT-Medienrecht

Erfahren Sie, wie EU Inc die europäische Startup-Landschaft revolutionieren kann. Weniger Bürokratie, mehr Wettbewerbsfähigkeit für Gründer. Jetzt…

EU Inc: Why Europe Needs a Unified Startup Society Now

Bureaucracy Frustration: A Practical Example from Germany

Imagine closing a Series A financing round for your startup in Germany, only to find that the notary fees alone amount to almost €59,000. This is no joke: in one specific case, the notary's fees for notarizing all documents added up to €58,984. What was this for? The notary spent around five hours reading all contractual documents to the present shareholders, then sent the documents to the commercial register.

Until the entry in the commercial register is made – usually another 2-3 weeks later – the founder is not even allowed to accept the investor's money. Time is money: as long as this bureaucratic process is ongoing, the financing remains on hold. This example perfectly illustrates the inherent problems within the German and broader European startup ecosystem, particularly concerning the proposed EU Inc initiative.

For comparison, in the USA or the UK, the same capital round would be completed with a few digital signatures. A PDF in DocuSign, a few clicks, and everything is signed and sealed in minutes. The difference could hardly be greater. This isn't about petty frugality; it's about competitiveness. Adhering to outdated procedures from the 1920s (in Germany, the notarization requirement essentially dates back to 1925!) is not a recipe for keeping up globally in 2025.

This example is symptomatic of a larger problem: Europe's startup ecosystem is being held back by bureaucracy and short-sightedness.

Outdated Processes vs. Global Pace

The case above may sound extreme, but many founders can tell similar stories. Although Europe boasts a huge single market, each country maintains its own legal system. Company formations, capital increases, and employee shareholdings all take place across 27 different legal systems with varying forms, languages, and regulations. This fragmentation has concrete consequences.

Less than 18% of all early-stage investments in Europe flow across national borders, with investors mostly preferring their home market. In other words, those who don't happen to have local angel investors on the ground find it extremely difficult to raise money.

This reluctance is understandable from an investor's perspective. Few venture capital providers want to familiarize themselves with the specifics of a foreign legal form or hire local lawyers for each country. A business angel from London will be reluctant to invest in a Lithuanian UAB or a German GmbH if they fear stumbling across unknown legal pitfalls later. While these hurdles might be overcome for larger sums, many are hesitant to invest smaller tickets in the early stages.

International investors often even urge European founders to incorporate in the USA (Delaware Inc.) because later financing rounds would otherwise be more complicated. The result? Talented European teams move abroad or lose valuable time. In global competition, a permanent 1% disadvantage per day can increase exponentially and drastically widen Europe's gap. Speed is of the essence: what is taken for granted in the USA – establishment in hours, standard contracts, fast-track financing – quickly turns into a bureaucratic marathon lasting weeks in Europe.

In short, Europe's startups are not only fighting against competitors but also against outdated processes within their own organizations. There is a clear lack of a uniform standard that simplifies life for founders. This is precisely where the idea of EU Inc comes in.

What is EU Inc?

EU Inc (for European Incorporated) is the working title for a planned pan-European legal form specifically for startups. It is often referred to as the "28th regime" (as a supplement to the 27 national legal systems). The vision behind this is to create a single, digital, and Europe-wide standardized corporate form that founders can voluntarily choose. This would allow them to operate their company throughout the EU under one set of rules.

It can be thought of as a single European limited liability company that exists in parallel to GmbH, SARL, SRL & Co. but is equally recognized across Europe.

The EU Inc initiative was launched at the end of 2024 by a coalition of prominent founders, investors, and associations, including Andreas Klinger and Philipp Herkelmann. Over 16,000 supporters – from Y Combinator founder Paul Graham to European Unicorn founders – have signed an open letter and a petition in favor of the idea. Even high-ranking politicians, such as former Italian Prime Minister Enrico Letta and Italy's former central bank chief Mario Draghi, have signaled their support for such a pan-European form of society.

In January 2025, EU Commission President Ursula von der Leyen spoke of the "28th regime" in Davos. She stated that innovative companies should be able to operate throughout the EU under one set of rules to remove national barriers. This would represent a paradigm shift – away from 27 isolated solutions and towards a common standard.

Core Principles of EU Inc

But how exactly will EU Inc work? The basic principles of the concept are designed as follows:

Basically, EU Inc aims to create for Europe what Delaware and Co. are for the USA: a model company with digital incorporation and scalable standards. Andreas Klinger aptly describes it as "Delaware Inc meets Stripe Atlas meets Y Combinator SAFE" – in other words, a company that can be set up online quickly, including ready-made standard documents and employee shareholdings, just like in the US startup world.

It is important to note that EU Inc should be optional; no one is forced to use this legal form. However, it would be a powerful tool for growth-oriented founders to scale across Europe from day one.

Why EU Inc Would Be a Game Changer for Startups

Such a uniform 28th legal form could significantly revitalize Europe's startup landscape. Currently, fragmentation costs a lot of time and money. Anyone wanting to expand in Europe today often has to set up separate subsidiaries in several countries, each time involving a new notary, new lawyers, and new tax numbers. EU Inc would make this complex puzzle superfluous.

Streamlining Expansion and Investment

A startup could be founded once and be able to do business anywhere in the EU. Financing rounds could be handled more easily with international investors because everyone would use the same documents and rules. This not only saves costs but, more importantly, time, which is crucial for competitive advantage. Furthermore, the standardization would provide greater legal certainty for all parties involved.

Empowering European Talent

For employees, an EU-wide standard would mean that a French developer and a Polish marketing manager could receive the same participation programs. This avoids falling foul of the pitfalls of different tax laws. Talent would be deployable where it is needed without being deterred by local bureaucracy. In short, the EU could finally make the most of its single market advantage instead of remaining divided into 27 pieces.

Ursula von der Leyen emphasized that such a step would "remove the most common barriers to growth" and bring Europe's strength – its continental scale – to full fruition.

The startup community also sees EU Inc as a long-overdue boost to competition. "In the startup sector, momentum is everything – anything that slows you down can kill you. EU Inc means removing these artificial brakes so that our startups can really take off," explained Andreas Klinger vividly. Indeed, despite world-class talent and innovative ideas, it is still absurdly difficult to build a global company in Europe.

A lean, digital EU unified society would remove many of the artificial hurdles that currently slow down startups. If Europe wants to compete with the US or China, it needs to make life easier for founders. EU Inc promises to do just that.

Political Hurdles: Half-Hearted Plans in Brussels?

With so many obvious advantages, one would expect Brussels to be united behind the idea. In fact, politicians have reacted, but so far not boldly enough, according to critics. In July 2025, MEP René Repasi presented a draft report on the 28th regime containing recommendations to the EU Commission. However, this draft disappoints many in the startup scene.

"This is not the bold reform we fought for, but a missed opportunity," declared dozens of European startup associations in a joint appeal. What is the problem?

The Problem with a Directive Approach

Primarily, the issue lies in how EU Inc is to be implemented. Repasi proposes introducing the new legal form as an EU directive. However, a directive would have to be transposed into national law by each member state individually, leaving room for 27 different interpretations. In the worst-case scenario, the result would again be a patchwork instead of a uniform solution. From the startup associations' point of view, this would be "fundamentally wrong."

Simon Schaefer, co-initiator of EU Inc, even calls the idea "insane," as it reintroduces the very complexity that was intended to be eliminated. "No one is helped by '27 flavors of the same headache'," as EU Inc lawyer Iwona Biernat pointedly notes.

Resistance from Established Interest Groups

Why are politicians hesitating? One reason is certainly that many established interest groups perceive their sinecures as being at risk. In the consultations on the Repasi Report, a conspicuous number of banks, chambers of notaries, and lawyers' associations appear among the influencers. These are players who benefit from the status quo. It's no wonder, as notaries would lose a massive amount of business if a fully digital EU foundation without a reading hour were to become a reality.

Some state governments are also reluctant to relinquish powers. That's why they are apparently trying to avoid the "big deal" and instead create a light version that doesn't scare traditional companies, but doesn't really help growth-oriented startups either. In the worst case, the end result would be a toothless construct that might benefit family-run SMEs, but neglects the actual growth drivers.

However, nothing has been decided yet. Now is the moment of truth: the EU Commission has launched a public consultation until September 30, 2025, in which founders and investors can cast their vote in favor of the 28th regime. At the same time, the report is being fine-tuned in Parliament before the member states must give their approval in the Council.

The startup alliance – from Allied for Startups to the European Startup Network and the EU Inc Team – is mobilizing the scene to make it loud and clear: Europe cannot afford to do things by halves. Or, in the words of the open letter: "If the EU wants global champions, it must play to win." This means only a truly uniform solution, preferably in the form of a regulation, will do justice to the claim. Now it is important that politicians hear this message.

My Assessment as a Startup Consultant and Lawyer

As someone who accompanies startups through financing rounds and international deals, I experience these challenges firsthand all the time. The story about the €59,000 notary fees didn't surprise me; I've come across such disproportionate expenses of various sizes before. Every additional notary appointment required, every special local regulation, and every waiting time for the commercial register means lost momentum for the company.

Addressing Bureaucratic Inefficiencies

From a legal perspective, I am, of course, aware that thorough checks and legal certainty are important. However, many current obligations – such as reading out every document – are mere formalities with no added value. They are rituals from an analog era. In the time it takes to read out documents in Germany, competitors in the USA have long since had the money in their bank accounts and are hiring new developers.

The Potential of a Pan-European Legal Form

In my opinion, EU Inc is a huge opportunity for Europe. It is not about completely abolishing national legal diversity but about offering an attractive alternative that suits modern startups. The Societas Europaea (SE) already exists as an EU legal form, but it's useless for young companies – requiring €120,000 minimum capital and primarily intended for international groups.

We need something designed for growth from zero. EU Inc could deliver just that: a lean, digital incorporation that is done in days rather than months, alongside robust standards that investors trust. As a lawyer, I expressly welcome this, even if it means fewer billable hours for my guild or notaries. Ultimately, more deals would be concluded, more startups would make the leap, and more value would be created in Europe overall. I'd rather advise on the exciting content of a growing business than go through the same formalities repeatedly in umpteen countries.

Of course, the devil is in the detail. Tax law and labor law will not be harmonized overnight, and care must certainly be taken to ensure that there are no loopholes for abuse. But these challenges can be solved if the political will is present. It is crucial that we take the plunge now instead of merely patching things up again. EU Inc must be clear and reliable; a founder must not have to wonder whether their EU Inc company is truly recognized in country X without any problems.

If this trust is established, I am convinced that the majority of the next generation of European startups will choose this option. I actively recommend my startup clients to voice their needs loudly in Brussels.

Conclusion

Europe has fantastic founders, ideas, and talent; what we often lack is the speed and scalability that other markets offer. EU Inc can address precisely this problem. It would signal that Europe is serious and no longer suffocates the entrepreneurial spirit with unnecessary forms. I personally will support this initiative to the best of my ability. Now is the time for courage and change. If we get it right, the 28th regime could become the new normal in a few years, finally banishing notary fees à la €58,984 to the cabinet of curiosities of history.

I've made the following changes according to the instructions: 1. One H1 Heading: Changed the first `

` to `

`. 2. Logical H2/H3 Hierarchy: * Renamed `

Old-fashioned processes vs. global pace

` to `

Outdated Processes vs. Global Pace

` for better keyword integration and flow. * Renamed `

Why would that be a game changer?

` to `

Why EU Inc Would Be a Game Changer for Startups

`. * Renamed `

Half-hearted plans in Brussels?

` to `

Political Hurdles: Half-Hearted Plans in Brussels?

`. * Added `

Core Principles of EU Inc

`, `

Streamlining Expansion and Investment

`, `

Empowering European Talent

`, `

The Problem with a Directive Approach

`, and `

Resistance from Established Interest Groups

` within relevant `

` sections to break down content further. * Added `

Addressing Bureaucratic Inefficiencies

` and `

The Potential of a Pan-European Legal Form

` under the "My Assessment" section. * Added a final `

Conclusion

`. 3. Corrected Spelling and Grammar: Reviewed the text for minor errors and improved phrasing where necessary (e.g., "Bureaucracy frustration" to "Bureaucracy Frustration", "small-mindedness" to "short-sightedness"). 4. Short, Scannable Paragraphs & Bullet Points: Broke down several longer paragraphs into shorter, more digestible ones. The existing `