Delaware is a state of roughly one million people, about the population of Cologne. It has no particular technological advantage. No special economic zone. No remarkable natural resources. What it does have is 2.1 million active business entities, more than two registered companies for every man, woman, and child. In fiscal year 2023, corporate franchise taxes and fees brought in over $2 billion, roughly a third of the state’s entire revenue. More than 60% of the Fortune 500 are incorporated there. Over 81% of US-based IPOs in 2024 chose Delaware as their corporate home.

The product that generates all of this is not low taxes or fast paperwork, though Delaware has both. It is predictability. Fifty years of consistent Court of Chancery jurisprudence means everyone involved in a corporate dispute knows, before they walk in, roughly how it will be resolved. That is what Delaware sells. Everything else is the packaging.

On March 18, 2026, the European Commission decided it was time to give Europe something comparable. The result is EU Inc: an optional, pan-European company form that lets any founder, from anywhere in the world, incorporate a single entity operating across all 27 member states. Forty-eight hours. Under €100. Fully digital. No notary. No minimum share capital.

It is the most ambitious piece of European corporate reform in twenty years, and it arrives at a moment when the continent can least afford to get it wrong. The startup ecosystem has already declared it insufficient. The Commission insists it is transformative. The truth, as is usually the case with European regulation, is more complex than either side admits.

What €100 Is Competing Against

To understand why EU Inc matters, it helps to know what it currently costs to do the thing it promises to simplify. Incorporating a GmbH in Germany runs €1,000 to €2,500 in notary and registration fees alone, requires a minimum of €25,000 in share capital (half paid upfront), and takes four to six weeks. A French SAS is faster and cheaper, three to four weeks and as low as €550 if you use an online service, but the articles of association typically require professional drafting at €1,500 to €2,000. A Dutch BV sits somewhere in between: €1,200 to €2,500, two to six weeks, with a notary mandatory for incorporation.

Those are the numbers for one country. A startup that wants to operate across, say, Germany, France, and the Netherlands needs to repeat the process three times, with three sets of local lawyers, three notaries, three fee schedules, and three different sets of rules about how shares work, how to hire people, and what happens if things go wrong. The European single market, in this sense, is a bit like a hotel chain where every location runs its own booking system, its own cancellation policy, and its own definition of what a “room” includes.

The consequences are not abstract. Nearly 30% of European unicorns relocated their headquarters between 2008 and 2021, with the majority moving to the US. Europe has produced around 130 unicorns; the US, more than 700. Europe’s gap is not in founders or ideas, but in the infrastructure that turns a promising company into a dominant one.

*Source: Eqvista Global Unicorn Landscape 2025; EIB Relocation Study 2026*

Net tech talent inflows to Europe halved from 52,000 in 2022 to just 26,000 in 2024. Access to growth-stage venture capital is the most cited reason for relocation: founders report that funding rounds above €50 million are structurally easier to close in the US. When companies leave, they take IP, tax revenue, strategic hiring, and follow-on investment with them. Europe keeps the university that trained the founder. America gets the company, the tax base, and the next three hundred hires.

*Source: Euronews / OECD data, January 2026*

Both the Draghi report on competitiveness (September 2024) and the Letta report on the single market (April 2024) identified fragmentation as the core structural weakness. Both recommended a “28th regime”: a single, optional EU-level company form. EU Inc is the Commission’s answer.

What Exactly Is on the Table

The headline features are straightforward. Any entrepreneur, regardless of citizenship, can register an EU Inc entirely online, within 48 hours, for under €100. No minimum share capital. No notary. English-language process at EU level. For anyone who has navigated the GmbH formation process, this alone feels mildly revolutionary.

But the provisions that matter most are less headline-friendly. The “once-only” principle means a company submits its information once through an EU-level interface that connects national business registers. Tax identification and VAT numbers are generated automatically. No re-filing when you expand into a new country. For companies currently maintaining parallel corporate registrations across multiple jurisdictions, this is not a marginal improvement. It is a structural change in how much it costs to be European.

Then there is the stock option provision, and this is where the proposal gets genuinely interesting. Europe’s fragmented approach to equity compensation has been one of its most self-inflicted competitive wounds. The problem has a name in Germany: “dry income”. When a startup employee exercises stock options, many EU jurisdictions tax the paper gain immediately, at the point of exercise, before the employee has sold a single share or received any cash. You owe tax on wealth you cannot yet spend. A Berlin engineer exercising French stock options faces a tax liability calculated in one country’s rules on an asset governed by another’s.

Germany partially addressed this in 2024 with the Future Financing Act, which defers taxation to the point of sale for companies under €100 million in revenue and less than 20 years old. But that fix is national, not cross-border. An employee moving from Berlin to Amsterdam still falls into a gap between the two systems. EU Inc proposes a common optional scheme with deferred taxation at sale. If it works as designed, it makes equity compensation in Europe function the way most people already assume it does.

The proposal also includes simplified insolvency (no mandatory practitioners, six-month maximum timeline, fully digital) and a digital-by-default company lifecycle. The insolvency provision deserves more attention than it tends to get. In the US, a failed startup is a learning experience. In much of Europe, it is closer to a legal ordeal with personal stigma attached. Reducing the cost and duration of failure is not a soft policy goal. It directly affects how many founders are willing to try.

*Source: European Commission proposal, March 2026; VANGUARDS analysis*

The Gaps, and Whether They’re Fatal

The startup ecosystem’s response was swift. The EU-INC campaign, Allied for Startups, and the European Startup Network applied a straightforward test: “Does it provide as much legal certainty as a Delaware C-Corp?” Their answer: not yet. Investors surveyed warned that top-tier founders will continue incorporating holding companies in the US.

Three specific gaps drive this criticism. First, disputes will be heard in national courts, not a centralised EU commercial court. The Oxford Law Faculty described the risk as “27 different flavours of EU Inc”. An investor backing an EU Inc company incorporated in Portugal has no certainty that a Spanish court will interpret the same provisions the same way. For a structure marketed as unified, this is a meaningful problem. Second, corporate tax stays national. Ireland remains at 12.5%; France at 25%. Third, the labour law stays national. A French EU Inc still navigates French employment rules; a German one still deals with works councils.

Bruegel, the Brussels-based economic policy think tank, added a less-discussed criticism: the structure as proposed may still be too complex in practice, favouring larger companies over the small, fast-moving founders it was designed for.

These are legitimate gaps. But there is a counterargument that deserves weight, and it runs like this: the Delaware comparison, while useful, may be the wrong benchmark. Delaware did not arrive fully formed. It became the dominant jurisdiction through decades of iterative improvement, court decisions, and competitive pressure from Maryland, Nevada, and others. Nobody looked at Delaware in 1970 and said “this is perfect.” They said “this is good enough to try.” The trying created the feedback loop between users, courts, and the legislature that produced the predictability we see today.

EU Inc could follow the same evolutionary path, but only if it launches with enough adoption to generate that feedback loop. For a pre-seed founder in Lisbon who wants to hire an engineer in Berlin and a designer in Amsterdam, the difference between “perfect legal certainty” and “dramatically simpler incorporation with good-enough legal certainty” may tilt decisively toward the latter. EU Inc does not need to beat Delaware for the top 50 European startups raising Series C rounds from Silicon Valley VCs. It needs to work for the next 50,000 founders who currently spend weeks and thousands of euros setting up in multiple countries just to start selling across a supposedly single market.

If EU Inc captures that early-stage market, the legal infrastructure follows the demand. Courts develop EU Inc expertise because their caseloads require it. Investors grow comfortable because their portfolios include it. The ecosystem creates the conditions for its own improvement. That is the optimistic scenario. It requires the proposal to survive the legislative process in a form compelling enough to achieve initial critical mass.

Beware The Political Blender

The proposal now goes to the European Parliament and the Council. The Commission wants political agreement by end-2026 and full operability by 2028. If you have followed European legislative processes before, you will recognise the pattern that is about to play out.

Every member state will arrive at the Council with something to protect. Notary associations in Germany, France, and Austria will lobby against removing notarisation requirements. Low-tax jurisdictions like Ireland, the Netherlands, and Luxembourg will resist anything that appears to enable tax shopping. Countries with strong labour protections will scrutinise every provision for anything that could be read as undermining worker rights. The European Parliament will add its own amendments. Trade unions will have views. Corporate Europe Observatory has already flagged concerns about scrutiny speed.

The most probable outcome is dilution. At least two significant provisions, likely the removal of notarisation requirements and some aspect of insolvency simplification, will be weakened. This is the structural challenge of the “28th regime” framing: by positioning EU Inc as an optional addition rather than a replacement, the Commission avoids the impossible task of harmonising 27 legal traditions, but it also means every member state can chip away at the provisions that threaten its domestic interests without appearing to reject the whole project.

The Societas Europaea is the precedent that should sharpen everyone’s focus. Introduced in 2004 with broadly similar ambitions, it required €120,000 in share capital and was aimed at large corporates. By 2025, it had attracted roughly 4,000 to 5,000 registrations, 79% of them in the Czech Republic, and the majority were shell companies. The design was reasonable. The adoption was negligible. EU Inc is better targeted, but the adoption risk follows the same logic: if the final version is merely “adequate” rather than compelling, rational founders will keep using the structures they already know.

European Parliament finally devises plan to force lawmakers to actually turn up – POLITICO — *European Parliament*

What This Means in Practice

Inside Europe

For founders and scale-ups: Track this closely, but do not restructure around it today. The proposal is not law, and it will change. What you can do now: map what your current multi-jurisdiction setup costs (be specific: notary fees, legal fees per country, compliance hours, equity administration overhead) and model whether EU Inc would reduce them. Have your equity compensation structures ready to adopt harmonised stock option treatment if it passes. The founders who have their numbers ready when the regulation lands will move fastest.

For boards: Simplified insolvency lowers the cost of corporate failure across the EU. That means a more dynamic competitive landscape from 2027 onward, with companies entering and exiting markets faster. If your risk assessments still assume a relatively stable competitive set, this is worth revisiting.

For CFOs and General Counsel: The “once-only” principle and digital lifecycle could deliver measurable savings on cross-border administration. Start quantifying the current cost baseline. You will need the comparison when the final regulation is published.

Outside Europe

For companies considering European expansion: EU Inc, if it arrives as proposed, is a structurally different entry proposition. One digital incorporation, legal presence across all 27 member states, available to non-EU founders. If your European timeline is 2027 or beyond, have your legal team model the EU Inc structure alongside the traditional multi-entity approach. The cost difference may change your timing.

For competitors of European companies: A more integrated European market produces stronger European competitors. EU Inc alone will not close the transatlantic gap, but it removes one of the structural handicaps that have kept European companies subscale in their own home market.

For investors in European companies: Stock option harmonisation and simplified insolvency address two of the specific frictions that make European deal structuring more expensive. The question for portfolio companies: are they preparing to adopt these provisions, or will they wait and pay the switching cost later?

Looking Ahead

Prediction 1: The proposal is very likely to be diluted. At least two significant provisions will be weakened during negotiation. Member states protect institutional interests as reliably as water flows downhill.

Prediction 2: Adoption will start slowly. Fewer than 5,000 EU Inc registrations in the first 12 months, concentrated among new companies rather than conversions. Investor familiarity builds slowly, and law firms are cautious by professional design.

Prediction 3: Stock option harmonisation will be the breakout story. Even if the overall structure underperforms, deferred taxation at sale solves a specific, expensive, cross-border problem that nothing else currently addresses. Within two years, this will be cited as the single most useful element of the entire package.

What to Watch

Council working group composition by Q2 2026. Which member states seek amendments, and on what? Germany (notarisation), Ireland (tax sovereignty), and France (labour law). The amendment requests are a roadmap for dilution.
The first major VC fund to publicly accept EU Inc. Investor adoption drives founder adoption. Until a Sequoia, Index, or Accel says they will invest in EU Inc companies on the same terms as Delaware C-Corps, the structure faces a chicken-and-egg problem.
Early ECJ involvement. If EU Inc passes, the first disputes will reveal whether the European Court of Justice provides centralised interpretive guidance or defers to national systems. This is the variable that determines whether the “27 flavours” problem gets solved organically.
US counter-moves. Delaware collected over $2 billion in corporate franchise taxes last year. If EU Inc retains even a fraction of relocating companies, expect a competitive response.

Questions to Ask Your Team

What does our multi-jurisdiction European structure cost us annually in admin, legal, and compliance? Be specific: notary fees, per-country legal costs, equity administration overhead.
How many employees hold equity across our European operations, and what value is lost to cross-border tax friction on those instruments?
If a competitor adopted EU Inc and we did not, would they have a structural advantage in scaling across European markets? Where exactly?
Do our investors have a position on EU Inc as an acceptable corporate structure? If we do not know, it is worth asking.
What is our European expansion timeline, and does it intersect with EU Inc’s expected 2027 availability?

EU Inc: Europe’s Boldest Corporate Experiment…