EU Inc: Why Europe needs a unified startup society now

Bureaucracy frustration: A practical example from Germany

Imagine you close a Series A financing round for your start-up in Germany – and the notary fees alone amount to almost €59,000. No joke: in one specific case, the notary’s fees for notarizing all the documents added up to €58,984. And for what? The notary spends hours (in this case around five hours) reading all the contractual documents to the shareholders present and then sends the documents to the commercial register. Until the entry in the commercial register has been 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 the bureaucratic process is ongoing, the financing is on hold.

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 is not about petty frugality, but about competitiveness. Sticking to outdated procedures from the 1920s (in Germany, the notarization requirement essentially dates back to 1925!)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 start-up ecosystem is being held back by bureaucracy and small-mindedness.

Old-fashioned processes vs. global pace

The case above may sound extreme, but many founders can tell similar stories. Although Europe has a huge single market, each country has its own legal system. Company formations, capital increases, employee shareholdings – all this takes place in 27 different legal systems with different 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 staying in their home market. In other words, those who do not happen to have local angel investors on the ground find it extremely difficult to raise money.

This is understandable from an investor’s point of view. Hardly any venture capital provider wants 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 he has to worry about stumbling across unknown legal pitfalls in a few years’ time. These hurdles may sometimes be overcome for larger sums – but many are reluctant to invest in smaller tickets in the early stages. International investors often even urge European founders to start up 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 start-ups are not only fighting against competitors, but also against outdated processes within their own organizations. There is a lack of a uniform standard that makes life easier for founders. But 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 start-ups – 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 to operate their company throughout the EU with 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 throughout Europe.

EU Inc was initiated 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. And in January 2025, EU Commission President Ursula von der Leyen spoke of the “28th regime” in Davos: in future, innovative companies should be able to operate throughout the EU under one set of rules in order to remove national barriers. This would be a paradigm shift – away from 27 isolated solutions and towards a common standard.

But how exactly will EU Inc work? The basic principles of the concept look something like this:

• Uniform legal form under EU law: An EU-wide company that can operate across borders without having to set up a separate subsidiary in each country.
• Central, digital register: Formation and administration are carried out online via a central EU register (ideally in English), which dramatically speeds up the bureaucratic process.
• Standardized investment documents: Standardized contracts (e.g. term sheets, participation agreements, SAFE notes, etc.) that are recognized everywhere so that investors do not have to check new local contracts each time.
• EU-wide employee share ownership scheme: A standardized stock option framework for the whole of Europe that makes it possible to offer comparable shares to employees in different countries without having to set up separate plans in each country.

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 in a flash, including ready-made standard documents and employee shareholdings, just like the US start-up world. It is important to note that EU Inc should be optional; no one is forced to use this form. However, it would be a powerful tool for growth-oriented founders to scale across Europe from day one.

Why would that be a game changer?

Such a uniform 28th legal form could significantly revitalize Europe’s start-up 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 with a new notary, new lawyers and new tax numbers. EU Inc would make this puzzle superfluous. A start-up 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 uses the same documents and rules. This not only saves costs, but above all time, which is crucial in competition.

For employees, an EU-wide standard would mean that a French developer and a Polish marketing manager could receive the same participation programs, instead of 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 start-ups. If Europe wants to compete with the US or China, it needs to make life easier for founders – and EU Inc promises to do just that.

Half-hearted plans in Brussels?

With so many obvious advantages, you would think that Brussels would be united behind the idea. In fact, politicians have reacted – but so far not boldly enough, say 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? Primarily 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 – with 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 brings back the very complexity that was actually intended to be eliminated. No one is helped by “27 flavors of the same headache”, as EU Inc lawyer Iwona Biernat pointedly notes.

Why are politicians hesitating? One reason is certainly that many established interest groups see their sinecures at risk. In the consultations on the Repasi Report, a conspicuous number of banks, chambers of notaries and lawyers’ associations appear among the influencers – players who benefit from the status quo. 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 start-ups either. In the worst case scenario, the end result would be a toothless construct that might benefit family-run SMEs, but leaves out the actual growth start-ups.

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 have to give their approval in the Council. The startup alliance – from Allied for Startups to the European Startup Network and the EU Inc Team – is already 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.” – If Europe wants global champions, it must play to win. In other words, 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 start-ups through financing rounds and international deals, I experience these challenges first-hand 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, every waiting time for the commercial register means lost momentum for the company. From a legal perspective, I am of course aware that thorough checks and legal certainty are important. But many of the current obligations – such as reading out every document – are mere formalities with no added value, rituals from an analog era, so to speak. 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.

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 does justice to modern start-ups. The Societas Europaea (SE) already exists as an EU legal form, but is useless for young companies – €120,000 minimum capital and only intended for international groups. We need something that is designed for growth from zero. EU Inc could deliver just that: a lean, digital incorporation that is done in days rather than months , and robust standards that investors trust. As a lawyer, I expressly welcome this – even if it means fewer billable hours for my guild or notaries ????. Because in the end, more deals would be concluded, more start-ups 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 again and again 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 there. It is crucial that we take the plunge now instead of just patching things up again. EU Inc must be clear and reliable – a founder must not have to wonder whether his EU Inc company is really recognized in country X without any problems. If this trust is created, I am convinced that the majority of the next generation of European start-ups will choose this option.

My 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 be a signal that Europe is serious and no longer suffocates the entrepreneurial spirit in forms. I personally will support the initiative to the best of my ability and recommend my start-up clients to voice their needs loudly in Brussels. Now is the time to show courage for change. If we get it right, the 28th regime could become the new normal in a few years – and finally banish notary fees à la €58,984 to the cabinet of curiosities of history. ????

Author: Marian Härtel

Marian Härtel ist Rechtsanwalt und Fachanwalt für IT-Recht mit einer über 25-jährigen Erfahrung als Unternehmer und Berater in den Bereichen Games, E-Sport, Blockchain, SaaS und Künstliche Intelligenz. Seine Beratungsschwerpunkte umfassen neben dem IT-Recht insbesondere das Urheberrecht, Medienrecht sowie Wettbewerbsrecht. Er betreut schwerpunktmäßig Start-ups, Agenturen und Influencer, die er in strategischen Fragen, komplexen Vertragsangelegenheiten sowie bei Investitionsprojekten begleitet. Dabei zeichnet sich seine Beratung durch einen interdisziplinären Ansatz aus, der juristische Expertise und langjährige unternehmerische Erfahrung miteinander verbindet. Ziel seiner Tätigkeit ist stets, Mandanten praxisorientierte Lösungen anzubieten und rechtlich fundierte Unterstützung bei der Umsetzung innovativer Geschäftsmodelle zu gewährleisten.