Europe is full of smart founders, strong universities, and brilliant engineers. But most of its startups stay small or move to the US to grow.
While the continent creates more startups than the US, few survive past the early stages.
Now, a new proposal, called EU Inc, wants to change that by creating a single company structure that works across all 27 EU countries.
This movement might be the most radical thing to hit European tech in decades.
And most importantly, it is coming from the founders themselves.
Why can’t European startups scale?
Europe doesn’t have a startup problem. It has a scale-up problem.
The data makes this clear. As of late 2023, the US had created eight times more unicorns than the EU.
China had nearly three times as many.
Europe is home to just 14% of the world’s unicorns and attracts only 5% of global venture capital. The US takes more than 50%.
Even when European startups succeed, they often scale elsewhere. Many relocate to the US just to access late-stage capital.
That’s not just brain drain. It’s also a system drain.
The problem lies in the structure. Expanding from Germany to France means dealing with a whole new set of rules on taxes, employment, company law, and stock options.
This legal patchwork acts like friction. A US startup can scale across 300 million people with one legal system.
A European one has to rebuild its foundation every time it crosses a border.
What is EU Inc really trying to do?
EU Inc is a proposal to create a pan-European company structure that works in every EU country.
It would be a voluntary framework, or a “28th regime”, designed just for startups. Think of it as a European version of Delaware.
Founders could incorporate once and operate across the continent. They could offer the same stock options everywhere, raise money with a single, standardised process.
And most importantly, they wouldn’t need to register in 10 different countries just to scale.
The idea is not new. Brussels has been trying to unify company law for decades.
The Societas Europaea, introduced in 2004, was supposed to solve this. It didn’t.
It’s expensive and only useful for large corporations. Startups never touched it.
What’s different this time is how the idea is being pushed.
EU Inc wasn’t written by civil servants. It was started by founders, VCs, and startup associations.
They didn’t wait for permission. They built a website, wrote an open letter, and gathered 13,000 signatures.
Support came from some of the most prominent European founders.
Leaders at Stripe, Wise, Supercell, Wolt, DeepL, and many others voiced their opinion in late 2024 in support of such a movement.
Venture funds like Sequoia, Index Ventures, Atomico and Seedcamp joined.
Groups and startups from France and Germany are also quickly coming on board.
Over the past couple of weeks, the movement has also been gathering momentum on LinkedIn.
This shows that for once, Europe’s fragmented startup scene is speaking with one voice.
Will it actually happen?
The European Commission has added the 28th regime idea to its 2025 work plan.
Policymakers have started referencing EU Inc in hearings. But that doesn’t mean it’s guaranteed.
Legally, it’s complex. Taxation and labour laws are mostly national.
Any meaningful regime would need broad agreement from 27 governments. That could take years.
Politically, it’s already facing resistance. An early draft report to the European Parliament, known as the Repasi Report, tries to water down the idea.
It sides with notaries and legal traditionalists over founders. It doesn’t reflect how startups actually operate.
There’s also a risk of delay. In tech, two years is a long time. If the EU takes too long, the best startups will just leave.
Capital will keep flowing to more unified markets like the US.
So while momentum is real, execution is not guaranteed. The window is open. But it won’t stay open forever.
Why this matters more than people think
This is not just about simplifying company forms. It’s about changing the story of European tech.
According to Dealroom, since 2019, over 80% of venture capital in Europe has been concentrated in just ten cities.
That leaves entire regions underserved, widening the gap between innovation hubs and the rest.
EU Inc aims to reduce this geographic inequality by allowing startups to scale from anywhere, not just from the major capitals.
VC-backed companies in the US account for 68% of employment in the Bay Area. In Germany, it’s just 0.8%.
Source: Dealroom
VC-backed companies in the US create jobs at 10 to 12 times the rate of the rest of the economy.
In Europe, that multiplier is just six. That gap represents millions of missed jobs.
To put things into perspective, US tech firms now control 90% of the global markets for LLMs, search, cloud infrastructure, social platforms, and foundational AI.
Europe has missed out on wave after wave of platform creation.
As a result, the US added $34 trillion in tech market cap over the past decade. Europe added just $2 trillion.
And this is not just about capital, it’s about how much upside is allowed to be captured by domestic ecosystems.
Europe has great founders. But to succeed, they need to be unusually lucky.
They need to understand complex national laws, find capital in a fragmented investment market, and navigate tax systems that aren’t built for equity-based startups.
EU Inc is about removing these hidden taxes on ambition. It won’t magically create the next SAP or Spotify.
But it could finally give Europe the basic infrastructure to compete.
What needs to happen next?
For decades, startup policy in Europe has been top-down. Now the energy is coming from the bottom up.
Founders aren’t asking for subsidies. They’re asking for one legal structure, built for speed.
But if Europe is serious about becoming a tech leader, EU Inc needs to move fast.
First, the Commission must preserve the core of the original proposal. That means one company type, one registry, and harmonised rules for equity and expansion.
Second, Europe needs to unlock its own capital. Right now, pension funds and insurers are not putting enough money into tech.
In fact, foreign LPs account for nearly 50% of all VC funding in Europe.
A “Savings and Investment Union” could help redirect local money to local growth.
Third, Europe needs to tell a new story. People don’t move for laws. They move for opportunity.
The US has the American Dream. Europe needs its own version. A version that combines talent, purpose, and freedom to build.
The good news? The energy is there. The talent is already here. What’s missing is the legal and financial foundation to support it.
That’s what EU Inc offers.
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