Could EU Inc crack the code for tech startups?

When it comes to expansion, European startups are often looking across the pond rather than their next-door neighbors. Too many have found it logistically simpler to expand into the US than into a neighboring European country. It’s seen as a far more favorable testing ground, with a massive, unified market and the ability to aggressively scale.

That should not be the case. Europe is supposed to be a single market: 450 million consumers across the continent, deepening investment in AI, climate tech and deep tech, relatively easy movement between countries, and often shared cultural and business ties.

Yet, for many founders, that opportunity still feels more theoretical than practical. That’s because despite being a ‘single’ market, Europe still operates like 27 different ones. This lack of alignment has created a fragmented corporate and legal landscape which turns what should be a straightforward expansion into a slow and costly process. Businesses often face a complex administrative process, made up of different languages, regulations, and rules. What should take days can stretch into weeks or even months; slowing momentum at the exact moment startups need to move quickly. 

The European Commission's proposed ‘EU Inc’ laws offer a potential solution to this frustrating contradiction. The concept of a standardized “28th Regime” that allows companies to operate as a single entity across all member states directly addresses some of the biggest barriers founders face today. 

And it's a genuinely promising step forward, one that lays the groundwork for even bigger wins ahead.

EU Inc is a promising foundation, but incorporation is only the first hurdle. If Europe wants startups to scale at the pace they build, the next phase must tackle the operational complexity that still slows expansion down. 

To be truly transformative, EU Inc needs to go beyond registration and address the structural complexity that follows, from inconsistent tax frameworks to fragmented stock option rules.

EU Inc could help champion startups

There’s no shortage of investment and innovation in Europe, and there is a real opportunity for tech startups to expand here. But there are a number of challenges.

For example, when we founded Weglot in France in 2015, we were bootstrapped and wanted to avoid unnecessary admin costs. We operated without any legal structure for six months until we reached a threshold that gave us the conviction that we had real customers and traction to justify investing in the administrative setup. 

The EU Inc. would have directly addressed two of the challenges we faced: the friction of the initial legal setup and the complex choice of legal structure. The option to register in 48 hours for under $100 would have been greatly welcomed. It should also lessen paperwork and reduce the administrative burden that causes startups with small teams and little legal expertise to expand elsewhere.

If executed correctly, EU Inc will lower barriers to entry for ambitious startups that wish to operate on a single market scale from day one. 

But there is still room for the EU to be doing more, and barriers remain. Expansion isn’t as easy as founders simply replicating what worked in their home country across the continent, and more needs to be done to remove the structural hurdles that exist. 

This includes Europe’s 27 distinct legal and business cultures, and complex cross-border taxation and VAT laws. These are the complications the next phase of EU Inc should be designed to address.

The untapped opportunities to be considered

The current EU Inc proposals still leave startups with a surprising amount of complexity to contend with – especially for something that’s supposed to be a single market. 

Registering a company is only the beginning. Scaling requires hiring new talent, the ability to operate efficiently across borders, and the ability to move quickly. And that’s where European companies are being held back.

 To make EU Inc truly transformative, there should also be a clear European standard on tax reporting. Currently, tax, labor and compliance rules differ from one country to the next. A clear framework that’s the same in every market could remove friction, lessen time spent on administration, and reduce complexity. 

For example, monthly intra-EU VAT reporting is still a significant administrative burden for small structures and startups. Lessening the complexity of reporting to local tax administrations would reduce administrative headaches. 

EU Inc could also provide a clear European standard framework for stock options. This is a powerful tool for attracting and retaining talent in a growing startup, which is currently being underutilized. Instead, tax treatment and grant rules for stock options vary significantly across EU member states, which creates an uneven playing field. This is especially true when you compare Europe to the US, where the framework is far simpler and more attractive to startups looking to expand. 

Addressing these specific challenges will help startups expand with speed and confidence into neighboring European countries.

What’s next? 

Europe doesn't lack ambition, or even founders — what it's been missing is an operating environment that lets that ambition turn into reality. One that allows companies to scale as fast as they can build.

The proposed EU Inc measures are a meaningful and welcome start, laying real foundations to build on. If its promises are realized, operating across the single market should soon feel smoother and clearer for founders everywhere.

That said, removing the everyday frictions that hold back cross-market scaling remains essential — and this is exactly where bolder proposals can make all the difference. Europe has a genuine opportunity here: if it wants the next generation of global technology companies to be built — and to stay — on its soil, the moment is right to think beyond incorporation, and tackle head-on the challenges still standing between startups and the speed they're capable of.