Remarks by Executive Vice-President Virkkunen and Commissioners Zaharieva and McGrath on EU Inc. and the 28th regime

Executive Vice-President Virkkunen:

Good afternoon, everyone,

Welcome to the College read-out.

Let me begin by thanking my colleagues, Commissioners Michael McGrath and Ekaterina Zaharieva, for their excellent collaboration, as well as the president of the Commission, who gave her statement just moments ago.

Today we take an important step to strengthen Europe's competitiveness and advance the Single Market. We have heard the message of businesses, and we can also see it in the statistics: growing and scaling businesses is not as easy in Europe as it should be. And we want to change this course.

Our goal is simple: make it easier for businesses—especially start-ups and scale-ups—to grow across borders, compete globally, and innovate from Europe.

This ambition is not new. We've made this loud and clear in our Competitiveness Compass, the Start-up and Scale-up Strategy, and the Single Market Strategy.

Today, we deliver.

At the heart of the 28th Regime is the EU Inc.

EU Inc. will be a game-changer. It provides a flexible, digital by default, modern company law framework that founders can choose. Covering the entire life cycle of their companies: from setting up and scaling up to winding down.

It offers businesses the freedom to choose their seat within the EU, aligned with the freedom of establishment and European court of justice case law. This means that EU Inc. Companies will still comply with European standards—whether in tax, labour, or consumer protection. 

This is about smart regulation, not deregulation. Michael will soon share more light of the details of the EU.inc.

But the 28th Regime will go beyond EU Inc.

Companies face barriers beyond company law—taxation, employment, insolvency, and digitalisation—all of which can hinder growth. That's why our Chapeau Communication outlines how existing and upcoming initiatives will align to support scaling up.

In taxation, the Head Office Tax System (HOT) simplifies rules for SMEs, while the Tax Omnibus will look into further streamlining procedures.

We also call on Member States to harmonise tax treatment of Employee Stock Options, which we are establishing with EU Inc.. This will be critical to attract talent.

On employment and access to talent, the Fair Labour Mobility Package will digitalise procedures and explore 100 % telework cross-border, helping start-ups hire, for instance, digital nomads under familiar rules.

Digitalisation will also be key. The Business Wallet will cut red tape, reduce translation burdens, and strengthen fraud prevention—making cross-border operations smoother and safer.

Finally, more legal predictability. We encourage Member States to establish specialised courts to handle disputes efficiently, reinforcing trust in the EU Inc. label.

This is just the beginning. The 28th Regime launches today, but our work doesn't stop here. We need to adopt the EU Inc. proposal by the end of this year—an ambitious but necessary timeline to ensure Europe remains at the forefront of global innovation. And we must keep pushing for further measures

Our goal is clear: We want European businesses to grow, to stay, and to thrive in the EU. We want to bring back those who left.

In simple terms: we want to make it easier for people with good ideas!

Thank you, I will now pass the floor to Ekaterina.

***

Commissioner Zaharieva

Ladies and Gentlemen,

Today marks a defining moment for European founders.

I want to thank President Von der Leyen for her leadership and vision, as well as Henna and Michael for the excellent cooperation.

But let me also thank the many people outside this room, those who built the momentum that brought us here today.

Because the spirit of EU Inc. was really born from the ground up!

We heard you!

Congratulations to you all!

We have a proposal for a regulation!

Every year Europe creates more companies than any other region in the world.

And yet, a third of founders say that while they would prefer to grow from Europe, they may need to move.

What they tell us is that this is not just about capital.

They want clients!  And for clients they need access to market. A Single Market.

EU Inc. will allow them to do just that.

Michael will give you the details of the EU Inc. in a moment.

I want just to mention that we have addressed most of the requests of the startup community: single entry point for registration, employee stock options, and fast-track insolvency procedure for startups.

To allow that, today we are recommending a common definition for innovative enterprises, innovative startups, and innovative scaleups.

They were widely consulted with our stakeholders and based on international standards. They are designed to be objective, easily verifiable and adapted for different sectors.

The definitions will allow the Commission, national authorities and the European Investment Bank, to design policies and programmes specifically for startups and scaleups.

These companies have different needs from other small and medium enterprises.

Startups and scaleups can be risky. They may take a long time to make money, and some will fail. But this is also how new ideas grow, and big successes begin. With the right support and clear, simple policies, we can help them succeed more often and build a stronger, more innovative economy for everyone.

According to the definitions innovative startups will be companies that develop innovative products or services, have less than 100 employees, less than 10 million EUR turnover, and younger than 10 years.

Innovative scaleups are fast growing companies whose annual turnover or balance sheet total, exceeds EUR 10 million; and whose average annualised increase in the number of employees or in revenue exceeds 20% over the two preceding years. The scaleups can have less than 750 employees, and even more, if they are unlisted.

Ladies and gentlemen,

This is of course just a starting point, and the next steps lie with the co-legislators.

I am confident that through cooperation, and the continued support of our community, we will bring this initiative across the finish line.

We want to make Europe the natural home for startups and scaleups—a place where ambitious founders can launch, grow, and go global from here.

Thank you.

***

Commissioner McGrath

Thank you, Henna, Ekaterina,

Good afternoon, everyone.

Let me start by painting the bigger picture.

Our Union is home to the largest market in the world – the European Single Market.

Home to the largest consumer market in the world – all 450 million of us.

And home to endless talent, ambition, skills and innovation.

Yet, bureaucracy, unnecessary burdens, and corresponding costs are pushing our EU innovators and enterprises to look elsewhere.

If you're a founder, entrepreneur or investor, you're faced with 27 national legal systems and more than 60 different company forms.

This bureaucracy delays setting-up, raises costs, complicates scaling, and ultimately, slows growth!

The EU Inc. proposal is about reversing this trend.

It aims to: incentivise EU companies to set up and scale up in Europe; and inspire those who once looked elsewhere to return and stay!

So, what does the EU look like with EU Inc.

A modern, attractive and supportive territory for companies to grow.

A magnet for investment.

Where businesses thrive - without being overwhelmed with bureaucracy.

And let me add that to get to today's proposal, we have done our homework.

16 months of consultations led to one clear conclusion.

We need to simplify and streamline the business environment for EU companies.

We consulted extensively with entrepreneurs, founders, investors, and stakeholders across Europe.

Nearly 9 in 10 respondents (around 85%) told us that having to re-register their company in every Member State creates barriers to starting, operating, raising finance, or closing.

Almost three-quarters said the absence of a recognisable “EU brand” makes it harder to attract investment.

They wanted – and needed - something different, and this is what the EU Inc. proposal offers: an optional, harmonised corporate legal framework, that allows companies to set up and scale up quickly, cheaply, and digitally; and a framework that responds to the needs of innovative companies, but remains open to all founders who wish to use it.

With this proposal, we are creating a corporate law environment.

Where EU entrepreneurs can decide in which Member State they want to set up.

Where EU companies do not have to “flip” to scale up and seek financing elsewhere.

And where companies have simple, flexible, digital and fast procedures throughout their lifecycles.

EU Inc. strips away the bureaucracy that comes with establishing a business.

We want to see a single registration solution for a truly integrated Single Market.

So that founders can instead focus on what matters: entering new markets and winning new customers across each and every Member State.

There are four main ways the EU Inc. proposal will make this a reality.

First, companies using the EU Inc. legal form can set up quickly and cheaply.

Quickly means registering an EU Inc. company, online, within 48 hours.

Cheaply means for no more than 100 Euro, and with no minimum capital requirement.

If you have the ideas, Europe will have the company law framework to build businesses around them and support European innovation and success stories.

Second, EU Inc. will be digital-by-default and once-only.

Digital-by-default for corporate processes throughout a company's lifecycle: from setting up and submitting corporate information, through online shareholder or board meetings and fully digital share transfers, to digital insolvency procedures.

For many purposes, the once-only principle means just that - companies will submit information only once and business registers will transmit their company information to other national competent authorities.

EU Inc. companies will be able to make use of the tools of today, the multilingual and digital EU Company Certificate and EU Power of Attorney.

And these will be made compatible with the tools of tomorrow: the upcoming European Business Wallets.

Third, EU Inc. is about talent.

EU Inc. will help companies compete for, incentivise, and retain talent by issuing employee stock options.

These will enable employees to participate in the success and growth of their company!

And the harmonised timing of taxation will ensure that employees are only taxed on the income generated once shares are sold.

If you invest your talent in Europe, the EU Inc. proposal will help you reap the rewards.

Fourth but not least, EU Inc. is about investment.

EU Inc. by its very name speaks the language of investors – not only from across the EU, but from around the world.

The EU Inc. proposal will simplify and digitalise financing rounds and share transfers.

EU Inc. companies will have better access to early-stage investments and venture capital and to raising equity across borders throughout their growth cycle.

And whether you are a founder or investor, consumer or citizen, you will feel its benefits.

Founders will save both time and money through the digital-by-default, quick and efficient corporate procedures; and will have enhanced access to both talent and investment across the EU and around the world.

Investors will also save money and time through the certainty of common rules, digital procedures for financing rounds, and share transfers that lower administrative burdens; and will benefit from more flexibility and opportunity, through improved exit opportunities by allowing companies to access public equity markets.

Consumers and citizens will be able to choose to buy goods and services from “EU Inc.” companies; and will benefit from the shared prosperity of European innovation fuelling the EU's competitiveness and growth.

With EU Inc., our Union will be the place where ideas start up, where companies scale up, where investors want to be, and where success stays.

We have laid the groundwork.

We urge the co-legislators to reach an agreement by the end of this year.

An EU wide company legal form is something we have tried before.

And we have learned the lessons from these attempts.

The proposal on the table today is ambitious.

But most importantly, it responds to the needs of the stakeholders we have consulted.

Now is the time to move forward together.

Thank you, and I look forward to your questions!