Expanding your company in the EU is about to become easier

In her speech at the World Economic Forum in Davos, European Commission President Von der Leyen outlined plans for the establishment of 'EU Inc', which will allow citizens to register an EU-wide company online and within 48 hours.

This is an extract from her speech. The emphasis is mine:

This reality also reflects the fact that Europe has all the assets it needs to attract investment – the savings, the skills, and the innovation – with our AI Factories and Gigafactories and the applications that are necessary, the ‘AI first' principle. What we need is to mobilise collectively these assets to their full potential. And to focus on the essential. Focal point number one is to create a conducive and predictable regulatory environment. We live in an age where capital and data can cross Europe in a second. And business must be able to move just as freely. But as things stand, too many companies have to look abroad to grow and scale up – partly because they face a new set of rules every time they expand into a new Member State. So while on paper the market of 450 million Europeans is open to them, it is far more complicated in reality. And that acts as a handbrake on the growth and profit potential of companies. This is why we need a new approach. We will soon put forward our 28th regime. The ultimate aim is to create a new truly European company structure. We call it EU Inc., with a single and simple set of rules that will apply seamlessly all over 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. They will enjoy the same capital regime all across the EU. 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.

I bought incorporateineu.com a few hours after the speech. Once 'EU Inc' becomes real, I hope to make better use of it. Until then, I'll update this page as details emerge.

Some recent controversy came up regarding 'EU Inc' regarding workers' rights and the 28th regime. Trade unions warn against the emergence of a two-tier labour market and a race to the bottom in social standards if companies can simply ignore national rules by opting into the EU framework. Critics point to the European Company (SE) form as a cautionary tale, where over 3,220 dormant "shelf" SEs exist across Europe, created specifically to shed employee rights when later activated for real economic activity. The European Parliament has signalled broad backing nonetheless, voting 492 to 144 in favour of a report on the initiative, partly on the strength of included safeguards for labour standards and employee participation.

Two big uncertainties remain. Whether the regime is enacted via regulation (applying directly everywhere) or directive (leaving room for national implementation) is unresolved — business groups strongly prefer a regulation, arguing a directive would simply recreate the same patchwork founders are trying to escape. Since member states are under no obligation to opt in, the result could end up as just another layer of bureaucracy, with founders shouldering compliance costs in adopting countries without feeling the benefits.