Von der Leyen unveils EU Inc. to boost European startups

The European Union will establish a separate entity, alongside the member states, to enable companies to grow across the bloc. During her speech at the World Economic Forum in Davos, European Commission President Ursula von der Leyen officially backed the EU Inc, after months of discussion.

What is the EU Inc.?

The EU Inc will be a '28th regime' that will function as an optional EU-wide corporate framework operating alongside national systems. This initiative seeks to provide a unified legal structure for companies operating across the bloc. Currently, a founder in Berlin who wishes to expand to Paris or Madrid faces a labyrinth of local notary requirements, distinct tax codes, and incompatible labor regulations. This friction acts as a tax on growth. The "28th regime" bypasses these national silos by offering a standardized European status, utilizing a uniform set of rules for capital and corporate governance.

"The ultimate aim is to create a new, truly European company structure. We call it EU Inc., with a single, simple set of rules that will apply seamlessly across our Union. So that business can operate across Member States much more easily. Our entrepreneurs, the innovative companies, will be able to register a company in any Member State within 48 hours – fully online," stated Von Der Leyen.

Making startups flourish

Ursula von der Leyen highlighted that the push for 'Europe Inc.' is a response to increasingly challenging global conditions, including the weaponisation of trade and the resurgence of industrial policy in the United States and China. The creation of EU Inc. acknowledges that regulatory frameworks alone are insufficient to build economic power and that scale is essential. According to von der Leyen, geopolitical shocks can serve as an opportunity for Europe to build a new form of European independence, a structural imperative that has been needed for a long time. The European Commission aims to shift the EU's focus towards competitiveness, capital mobilisation, and strategic autonomy in its policymaking.

"Ultimately, we need a system where companies can do business and raise financing seamlessly across Europe – just as easily as in uniform markets like the US or China. If we get this right – and if we move fast enough – this will not only help EU companies grow. But it will attract investment from across the world," she added.

A move to boost European Competitiveness

The creation of a dedicated strategy for European startups and scale-ups is part of the strategy announced in last year's Competitiveness Compass. This plan builds upon a competitiveness analysis conducted by former European Central Bank Director Mario Draghi, which highlighted the need to close the innovation gap with China and the US, develop a joint plan for decarbonisation and competitiveness, and increase security while reducing dependencies.

The Competitiveness Compass called for launching a dedicated EU startup and scaleup strategy to remove barriers to startup growth, and an upcoming Innovation Act to promote innovative companies' access to European research and technology infrastructure and intellectual assets.