EU Inc. faces backlash: 'Not a true 28th regime'
The European Commission unveiled the EU Inc., promising simpler startups—but critics say it won’t fix Europe’s fragmented system.
Published on March 19, 2026
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Following months of discussion, the European Commission has proposed the 'EU Inc.', a legal framework to harmonize startup regulations across the EU and make it easier for businesses to operate and scale. While the plan aims to reduce administrative burdens and provide greater legal clarity, some in the startup community express concerns that the proposal still relies too heavily on national systems, limiting its transformative potential.
What is the EU Inc.?
The EU Inc. aims to establish a unified set of corporate regulations that function as the 28th regime within the bloc's single market. This initiative introduces an optional, digitally driven European corporate framework designed to streamline processes for businesses to launch, operate, and expand across the EU.
One of the core promises of EU Inc. is faster registration, enabling entrepreneurs to establish a company within 48 hours for less than €100, without any minimum share capital requirements. The proposal also aims for simpler procedures, requiring companies to submit their information only once through an EU-level interface connected to national business registers.
"EU Inc. will change the way we do business in the EU. Simpler, faster, cheaper. The Recommendation on definitions for innovative enterprises, innovative startups, and innovative scaleups will reduce uncertainty, supporting the development of startups and scaleups by facilitating tailored measures towards our innovators," stated Ekaterina Zaharieva, Commissioner for Startups, Research and Innovation.
The fragmentation issue is not solved
Despite the Commission's sweeping promises, the startup community's reaction to the official proposal has been fiercely critical. Founders and advocacy groups, including Allied for Startups and the European Startup Network, warn that the current draft fails to deliver a true 28th regime.
"This is still not a true 28th regime. It is not a genuinely European company in the full legal sense. It still relies too much on 27 national systems, 27 legal cultures and, in practice, 27 possible versions," wrote on a LinkedIn post Lucien Burm, chair of the Dutch Startup Association.
"The concern with the leaked proposal is that it may still leave registration and disputes tied to national registries and courts, rather than creating the genuine simplification that founders and investors had pushed for," underlined Eldian Biomed co-founder Gregor Bordon.
In other words, the proposed legislation doesn't fully address the fragmentation problem that founders lament. Without a bloc-wide legal framework and a unified judicial backstop, the initiative cannot offer the airtight legal certainty of a Delaware corporation. Consequently, critics warn that top-tier founders will simply ignore the new European structure and continue incorporating their holding companies in the United States to appease international investors.
A founders-driven initiative
The Commission's EU Inc. proposal follows a pressure campaign from the European tech sector. In late 2024, a coalition of founders, operators, and venture capitalists launched a grassroots petition, called the EU-Inc, demanding a unified corporate structure. Backed by influential industry figures like Stripe CEO Patrick Collison and major venture capital firms including Sequoia and Point Nine, the initiative quickly gathered more than 12,000 signatures.
Their demand was clear: Europe needs its own version of a Delaware corporation. In the United States, the Delaware structure provides a universally understood, highly predictable legal foundation that investors trust implicitly. The European founders wanted a framework that provided the same level of legal certainty, standardizing everything from investment term sheets to employee equity pools across the continent. They argued that true standardization is the only way to unlock the estimated $45 billion in European venture capital, which currently dwarfs the $120 billion deployed in the US.
The EU-Inc movement, although recognizing some of the improvements included in the legislation, issued a statement underscoring that the proposal is insufficient. The association of founders remains keen on helping the Commission improve the regulation.