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TL;DR:

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Key takeaways

Standardized company structure: EU-INC
- An EU-wide company type with harmonized rules for governance, share capital and maintenance among other key areas.
- The goal: easier investing, hiring, and growing across Europe.
- A subset of the corporate law is on “28th regime” (think governance, cap-table, stock-options and shareholders). And hence this allows standardized investing into all EU-Inc companies across Europe.
Digital-first approach: EU-REGISTRY & EU-DASHBOARD
- Part of the proposal is a fully-online registry and a web dashboard to streamline incorporation & management, and allow third-party providers to deeply integrate with your EU-Inc.
Modern simple investment instrument: EU-FAST
- A new, standard, open-source investment instrument inspired by convertible instruments such as SAFEs and BSA AIRs which will facilitate early-stage funding. You fill it out and send it to any investor worldwide and you are done.
Share options finally fixed: EU-ESOP
- A proposed EU-Inc’s employee stock option scheme to help attract and retain talent. </aside>

Introduction

The EU-Inc, together with a new proposed regulatory framework and supporting tools, provides a solution for modern companies in the EU to compete globally.

This proposal builds upon existing discussions and research related to the 28th regime framework, such as the recognised publication of France Digitale, and offers additional insights and practical solutions, drawing largely from existing best practices within the EU and beyond.

How does the EU-Inc and the 28th regime work?

The EU-Inc represents an entity where corporate governance is defined by a standardized set of rules established under the 28th regime:
- these rules governs the roles and relationships of key stakeholders, such as shareholders and directors, under EU regulations; and
- the framework provides a single, consistent set of rules applicable across all Member State regardless of a company’s residence.
Subsidiarity Principle: The EU-Inc follows the principle of subsidiarity in the EU:
- “Europe where necessary, national where possible”
  - an EU-Inc entity will reside in one or more Member States, depending on its operations;
  - the sovereignty of individual Member States in areas such as tax rates, tax collection and tax enforcement remains intact; and
  - for all operational activities - such as selling products, engaging clients, hiring and managing employees, and paying operational taxes - the EU-Inc has to comply with the national laws of each Member State in which it operates.
A Sensible Compromise for Now
- While many founders across Europe would prefer a fully standardized legal and tax code, the current solution represents a balanced compromise.
- This framework is designed to provide direct value for pan-european investments and hiring, but also gain approval from the European Parliament and Commission, all while offering a foundation for further standardization in the future.
Ultimately, the EU-Inc will act as entry-point for founders across Europe to start their journey.

What is part of this proposal?

The EU-Inc policy proposal is built upon four key pillars:

CORE CORPORATE FRAMEWORK: This pillar lays out a unified corporate EU regulatory framework and digital-first tools to facilitate incorporation, daily processes, and fast investments.
1. EU-INC: This a new EU-wide digital-first company structure
2. EU-REGISTRY: This is an online, digital-only registry. with a fully open API and connectable with third party tools
3. **EU-DASHBOARD:** An optional webtool for the EU-Inc Registry, with tools for entity and share capital management
4. EU-FAST (the “European Union Fast Advanced Subscription Template”): This is an open-source EU-wide early-stage convertible investment instrument inspired by models such as the ASA, the French BSA AIR and SAFEs
**EMPLOYEE SHARE OPTIONS:** This pillar proposes to create a new EU-level approach to offer share options to employees without facing 27 different legal frameworks: EU-ESOP (the “European Union Employee Share Option Pool”)
**TAXATION:** This pillar advocates for balanced tax rules, enabling companies to scale internationally while respecting Member States' tax sovereignty
EMPLOYMENT: This pillar provides recommendations on key employment-related aspects
**WHAT WE DO NOT WANT:** Knowing what we don’t want is as equally hard and important to get right to avoid mistakes and traps

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Heads-Up!

The next part of this proposal gets into the nuts and bolts of each pillar. We’ve kept the language as clear and straightforward as possible, but after all it’s still a legal document that requires a lot of detail and nuance. Even without a legal background, feel free to read it and send us your ideas for improvements!

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Next: 1. EU-INC

****⁉️ - Why not SE (Societas Europaea - European Company)?

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Got feedback?

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