Brussels Finally Starts Caring About Startups — and Introduces the EU Inc. Proposal
The European startup market is experiencing a moment many people didn’t expect to see anytime soon. After years of being treated as an afterthought on the Brussels political scene, early-stage tech companies are finally earning a spot on the European Commission’s agenda — and this time with a concrete proposal on the table.
The European Commission introduced on Wednesday the EU Inc. proposal, an ambitious initiative that promises to change the rules of the game for anyone looking to build and scale a company within the European Union. According to a draft of the plan obtained by POLITICO, the core idea is simple and straightforward: allow a founder to register a company in less than two days, for no more than 100 euros, with the entire process handled fully online. Sound like no big deal? For anyone who has ever tried to navigate the 27 different legal systems across the EU, each with its own rules for incorporation, taxation, and employment, this is nothing short of a revolution.
Brussels is finally putting startups at the center of the political agenda — and it’s not a coincidence. Over the past decade, more than 700 billion euros in tech market value left Europe, according to research from McKinsey and Swedish investment group EQT shared exclusively with POLITICO. European companies were acquired by foreign groups or simply crossed the Atlantic in search of capital and scale. Now, with pressure mounting from all sides and the gap with the U.S. and China becoming increasingly obvious, there’s really only one question the entire European innovation ecosystem is asking: is it too late? 🤔
What Actually Changes with EU Inc.
First things first — it’s worth understanding why starting a company in Europe has always been so complicated. Each country has its own set of rules, fees, documents, and timelines. An entrepreneur looking to operate in Portugal, Germany, and the Netherlands at the same time had to deal, until now, with three completely different systems, hire local lawyers in each jurisdiction, and spend months just on the initial red tape. This reality drove away a lot of venture capital and plenty of talented people who chose to bet on the more favorable conditions in the United States, where the regulatory environment is more flexible and access to investors is far more direct.
The EU Inc. proposal aims to solve exactly that by creating a unified legal structure valid across all EU member states. Under this framework, a startup founded in Brussels or Lisbon would have the same legal status in Berlin, Paris, or Warsaw, without needing to open local branches or go through legal recognition processes in each country. The process would be 100% digital, capped at 100 euros, with a turnaround of up to two business days for official registration. On top of that, the proposal includes a data-sharing principle called once only, meaning authorities wouldn’t be allowed to request the same information from a founder twice. This isn’t just about convenience — it’s a structural shift that could redefine how the European tech market works going forward.
Another key component of the proposal is the ability to implement an employee stock options program that works uniformly across the entire EU. Today, every country has different rules on how to offer equity to employees, making it nearly impossible for a European startup to compete with American companies when it comes to attracting top talent. With EU Inc., a stock options plan designed in Estonia, for example, would have legal validity and predictability in Spain or Italy as well. This standardization could be a game changer for talent retention in Europe.
A Continent Full of Startups, but Without Scale
Europe doesn’t have a shortage of entrepreneurs. According to data from the European Commission itself published in 2024, the continent is home to roughly 35,000 early-stage startups — more than any other region in the world. Europe’s appetite for building tech companies is just as strong as that of the U.S. or China. The problem was never about creation — it was always about growth.
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When a European startup wants to serve a larger market, raise more capital, or hire the best talent, it runs headfirst into 27 different regimes for registering operations, 27 capital markets, and 27 distinct ways to hire and compensate people. Leaving has usually been easier than staying and trying to scale within the bloc. And the numbers back that up: the most valuable European tech company by market cap, Dutch chipmaker ASML, is worth around 465 billion euros. Sounds like a lot — until you compare it with Apple, Google, or Meta, which operate in the trillions of dollars.
Ann Mettler, board member of the European startup fund EIC and former executive at Breakthrough Energy, the clean-tech fund backed by Bill Gates, summed up the situation well in an interview with POLITICO: nobody cared and nobody paid attention to the problems European startups face when trying to scale. Now, with Europe falling further behind in the tech race, startups are suddenly seen as a strategic asset and their problems have become a political priority. The question, as she put it, is whether this response came too late — and whether it will be enough.
The Political Turning Point
For a long time, efforts to help startups in Europe relied on initiatives led by national governments, such as the Europe Startup Nations Alliance, which never gained real visibility or meaningful traction. Those efforts focused on aligning policies between member states on topics like tech talent visas or stock options rules — incremental approaches that never really tackled the root problem.
The election of Ursula von der Leyen to a second term as president of the European Commission marked a clear shift in tone. In her political guidelines, she promised a new European legal status to help innovative companies grow, covering incorporation, hiring, taxation, and even insolvency proceedings. Beyond words, Von der Leyen appointed, for the first time in the bloc’s history, a commissioner dedicated to startups: Bulgaria’s Ekaterina Zaharieva.
Irish billionaire John Collison, co-founder of Stripe — one of the rare European tech success stories at a global scale — praised the initiative in an interview with POLITICO last April, saying that policymakers in Brussels are finally focusing on the right problems. That kind of endorsement from such an influential name in the industry shows that the proposal is, at least in theory, addressing real demands from the ecosystem.
Criticism and Concerns from the Ecosystem
Despite the initial optimism, startup lobbies still have serious doubts about how EU Inc. will actually be executed. After early concerns that the proposal’s legal basis could lead to the framework being fragmented into 27 different national implementations, the worry has shifted: the potential absence of a unified European business registry and of a dedicated EU court to handle disputes related to the new structure.
Serena Borbotti-Frison, director-general of the lobby group Allied For Startups, was blunt about what’s missing. According to her, what founders and investors need is a truly European system: a common EU registry, shared dispute resolution mechanisms, digital insolvency procedures designed for startups, and stock options taxed at the point of sale, not at issuance. These are technical points, but they make all the difference in practice for anyone trying to build a company operating across multiple countries.
Maya Noël, CEO of France Digitale, one of France’s leading startup lobbies, acknowledged that Brussels’ change in attitude is welcome. According to her, the organization has been calling for years for better market access, funding, and talent flows for European startups. What changed, she said, is that Brussels is finally listening. Still, listening and delivering are two very different things — and the real test will come in the details of the final legislation and the speed of implementation.
The Late-Stage Funding Problem
EU Inc. addresses an important part of the problem, but it’s far from a complete fix. One of the biggest bottlenecks in the European startup ecosystem remains late-stage funding — that moment when a company has already proven its business model and needs large investment rounds to truly scale.
According to a report from the European Commission itself, European startups face significant difficulty raising enough capital at this stage within the bloc. This pushes them toward American investors and, in many cases, paves the way for them to relocate to the United States for good. This exodus has put a spotlight on the longstanding ambition of creating a more integrated European financial market, one capable of pooling capital for higher-risk investments.
It’s no coincidence that EU leaders are set to address this topic directly at Thursday’s summit. According to preliminary conclusions obtained by POLITICO, the text states that a fundamental precondition for sustainable growth is a true savings and investment union, with a fully integrated and efficient capital market that channels savings into productive investments. It’s the kind of language that has appeared in European documents before, but it takes on fresh urgency in the current context.
The Innovation Act and Next Steps
Beyond EU Inc., the European Commission is also working on an Innovation Act, a separate piece of legislation that aims, among other things, to encourage member state governments to buy more from startups in their public procurement processes. This would address another chronic problem in the ecosystem: the difficulty European startups face in landing institutional clients within the continent itself, especially governments that tend to prefer large, established vendors.
However, the Innovation Act hit a significant snag. The European Commission’s quality control body rejected the proposal, according to two officials who spoke to POLITICO, and the text is now delayed. This kind of setback is common in the European legislative process, but it serves as a reminder that good intentions and ambitious proposals don’t always survive the internal scrutiny of Brussels’ own bureaucracy.
Startup lobbies are paying close attention and are ready to keep the pressure on policymakers. As Ann Mettler put it quite bluntly, much of European policymaking is done by people who don’t understand anything about business, about selling anything, or about the need for markets and demand. It’s a tough critique, but one that reflects a very real frustration among founders and investors who deal daily with the practical consequences of regulations disconnected from market reality.
The Road Ahead Is Still Long
No legislative proposal in the European Union moves from paper to practice quickly. EU Inc. still needs to pass through the European Parliament, be negotiated with the governments of all 27 member states, and survive a public consultation process that typically takes months. Along the way, lobbies from traditional industries, conflicting national interests, and internal disputes between member countries could water down important parts of the original proposal. This has happened with other ambitious initiatives in the past, and it would be naive to ignore that risk now.
Another point the market is watching closely is how the proposal will handle tax differences between member states. Even with a unified legal registration, corporate taxes still vary widely across the EU — from Ireland, with one of the lowest corporate tax rates in the bloc, to countries like France and Germany, with significantly heavier tax burdens. This fiscal patchwork could limit the real-world impact of EU Inc., especially for early-stage startups that need financial predictability to plan their growth.
That said, the simple fact that Brussels has put a proposal of this magnitude on the table already shifts the narrative. For a long time, the European Union was seen as a hostile environment for startups — heavy on regulation, slow on approval, and risk-averse. EU Inc. signals a change in posture that, regardless of the final legislative details, could influence how the global innovation ecosystem views Europe as a destination for investment and tech entrepreneurship. Narratives matter, especially when we’re talking about attracting venture capital and talent that have multiple options around the world.
What will ultimately determine the success or failure of this initiative isn’t just the text of the law — it’s the practical implementation across member states, the speed at which digital registration systems get up and running, and most importantly, the political will to maintain simplicity even when local interests try to complicate things. Europe has a highly skilled talent base, world-class universities, a strong track record in applied research, and a consumer market of nearly 450 million people with significant purchasing power. What’s always been missing is a framework that allows these assets to be transformed into globally competitive companies. If EU Inc. manages to deliver even part of what it promises, the impact on the European innovation ecosystem could be truly transformative. 🚀
