50 CEOs and investors urge Brussels not to dilute the EU Inc law

European business leaders press Brussels to protect the ambition of EU Inc.

Poinews.com – Fifty chief executives and investors from across Europe are urging EU lawmakers to keep the proposed EU Inc. framework broad and practical as negotiations continue in Brussels. The initiative is intended to make it simpler for companies to establish themselves, raise capital and operate across national borders within the European Union.

Supporters see the measure as an important test of whether the EU can reduce the legal complexity that often slows growing businesses. While the proposal is expected to receive approval before the end of the year, founders and investors fear that compromises being discussed could limit its usefulness.

Europe’s single market allows goods, services and people to move more freely between member states, but company law remains heavily shaped by national rules. For a business seeking to expand beyond its home country, that can mean dealing with separate registration systems, compliance requirements and administrative processes in multiple jurisdictions.

The executives and investors argue that an EU-wide corporate structure should remove obstacles rather than create an additional option with limited practical value.

“Policymakers must ensure that the final legislation delivers a genuinely European company form, rather than adding another layer on top of 27 national systems.”

A question of scale and competitiveness

The EU Inc. proposal forms part of a wider effort to strengthen Europe’s competitiveness. Many European companies encounter difficulties when moving from an early-stage business into a larger international operation, in part because differing legal systems can increase both costs and management time.

For startups in particular, those pressures can affect decisions about where to incorporate, hire employees, seek financing and build new operations. A more consistent company structure could offer entrepreneurs a clearer route to serving customers and attracting investment across the bloc.

The letter’s signatories include investors from Index Ventures, Accel, Balderton, Atomico and EQT. Their intervention reflects concern that a weakened final framework could fail to attract the businesses it is designed to help.

“Whether EU Inc becomes Europe’s economic engine or a legal structure so diluted that nobody uses it” is the choice facing policymakers.

The argument is not simply about making incorporation faster. A company form that works across borders could reduce the need for founders to navigate different legal approaches as their operations grow. In practice, the value of the scheme will depend on whether it offers enough certainty and flexibility to be preferable to existing national structures.

Registered offices and access to the scheme

One of the central requests is to retain a company’s freedom to choose its registered office. The signatories want founders to be able to select a legal home for their business without having to place all of the company’s activities in that same location.

That distinction matters for firms whose teams, customers, investors and commercial operations may be spread across several countries. A business could have employees in one member state, clients in another and investors based elsewhere in Europe. Requiring every element of its activity to be concentrated in the country of registration could make the EU Inc. model less adaptable.

The group also opposes restricting eligibility only to businesses classed as “innovative” startups. In their view, the structure should be accessible beyond a narrowly defined segment of the economy. A company’s ability to benefit from simpler cross-border rules may not depend solely on whether it fits a particular definition of innovation.

There is, however, a competing concern that unrestricted access could place excessive demands on the system or reduce its effectiveness. The eventual political balance will determine whether EU Inc. becomes a specialist vehicle for selected young companies or a wider corporate option for businesses operating across the Union.

Call for a single European register

The letter also calls for a central, authoritative EU-level register rather than a tool that merely connects existing national registries. The signatories believe a unified register would make it easier to review company information and improve confidence in records used by businesses, investors and other stakeholders.

“EU Inc needs a single, authoritative European register — not merely an interface layered over 27 national systems.”

A common register could be one of the clearest signs that the new structure is genuinely European. If users still need to move between different national databases to establish basic company information, the administrative advantages of the initiative may be reduced.

Tax treatment of employee shareholdings is another area highlighted by the group. They want employees to be taxed only once they actually hold shares in the company. Equity can be an important way for younger companies to recruit and retain staff, particularly when they are competing for specialised talent.

The signatories are also seeking to keep employment protections linked to the country in which an employee genuinely works. That approach would avoid disconnecting workers’ legal protections from their real workplace simply because their employer has selected a registered office elsewhere in the EU.

What lawmakers must decide

The negotiations now centre on the practical shape of the framework: who can use it, how companies will be registered, and how rules involving workers and share ownership will operate. Those details will determine whether the proposal delivers meaningful simplification or becomes another legal layer alongside national regimes.

For Europe’s business community, the stakes extend beyond a single corporate-law reform. The outcome will help show whether the EU can translate the promise of its single market into a more workable environment for companies trying to grow across borders.