EU Inc.: Build one company, not 27 different ones

Imagine an entrepreneur applying to register a company today. She has an innovative idea, a reasonable business plan, a trustworthy investor and the ambition to sell her products across Europe. What she needs from policymakers is not another speech or document about competitiveness. She needs a system that allows her to start quickly, raise capital, hire people and grow. Yet it takes her several weeks to register her company, the administration is overcomplex, hiring talent across borders seems impossible, she cannot pay her employees a competitive salary and she struggles to get any venture capital. 

Her problem is not imaginary. According to the European Commission, today the European Union has 27 national legal systems and more than 60 company forms. More than 80% of respondents to the Commission's consultation considered this fragmentation a significant barrier to doing business. Significantly, only four of the world's 50 largest technology companies are based in the EU, while one-third of European ‘unicorns’ have relocated abroad.

Europe does not lack entrepreneurs, ideas or ambition. What Europe lacks is a business environment in which a successful idea can grow into a successful European company. That is the promise behind the EU Inc., or the ‘28^th regime’, a common set of rules designed to make it easier and faster for companies to establish themselves, attract investment, operate across borders and scale up without burdens.

For the EPP Group, this is not simply a piece of legislation. It is part of a much bigger objective. Can we finally create a single market in which European companies can grow? EU Inc. is not only about helping someone launch a new business. It is about creating a European company form that can operate and grow across the single market throughout its lifecycle. 

The numbers tell the story. The single market is estimated to consist of around 450 million people and 23 million companies. According to Eurobarometer, 70% of small and medium-sized enterprises (SMEs) still operate domestically, while only around a quarter are active across the single m arket. Divergent business environments, unclear rules and taxation are among the most frequently cited barriers.

EU Inc. could be an important step towards changing that. It should be a company form open to all, but particularly benefiting startups that have an innovative product they want to market across European borders and that want to grow into a scale-up. 

Yet, EU Inc. is not a new idea. Over the years, Member States have developed many ideas and solutions to make doing business across borders easier. Now is the time to bring these experiences together, build on what works and turn them into one European approach. 

Therefore, the biggest challenge is to create one simple system that works in practice and is not hindered by the 27 national systems. The debate and the decision on this should be very ambitious. About two-thirds of SMEs identify regulatory complexity as their top concern. Areas such as taxation, labour law and insolvency will continue to require political choices and, in some cases, deeper harmonisation. 

The real test of EU Inc. should therefore not be how satisfied Member States are with their national rules. It should be whether an entrepreneur anywhere in Europe notices a difference. Can our entrepreneur, with her innovative idea, business plan and investor, register her company today? Can she raise capital across borders? Can she hire people in another Member State without facing unnecessary administrative barriers? Can a company easily attract talent? Can a European company easily expand from one European market to another? 

If the answer is yes, EU Inc. will have achieved something meaningful.