The European Commission has unveiled a groundbreaking initiative to create a unified company structure for startups across Europe, known as the ’28th Regime’. This proposal aims to be included in the Commission’s 2025 Work Programme and offers an optional legal framework for startups, complementing the national rules of EU member states without replacing them. Andreas Klinger, an investor with Prototype Capital, and Simon Schaefer, Founder and CEO of Factory, are among the co-initiators of EU Inc.
They have expressed the urgency for immediate action to unify and strengthen the fragmented European startup ecosystem. EU Inc. has garnered over 13,000 signatures from prominent tech leaders, venture capitalists, and political figures, demonstrating widespread support for change.
“If we don’t act now, Europe risks falling further behind. We urge policymakers in EU Member States, and those in Brussels, to act with urgency and begin work on legislative proposals immediately,” said Klinger. President of the European Commission, Ursula Von Der Leyen, has committed to introducing proposals in 2025.
“A startup from California can expand and raise money all across the United States.
Unified company structure for startups
But our companies still face way too many national barriers that make it hard to work Europe-wide with way too much regulatory burden,” she remarked.
Ekaterina Zaharieva, Commissioner for Startups, Research, and Innovation, also intends to propose a framework for the 28th regime in 2025, aiming to help innovative companies grow through simplified, harmonized rules across the Union. Michael McGrath, Commissioner for Democracy, Justice, and the Rule of Law, has committed to preparing a proposal on an EU-wide company legal status. The blueprint highlights key elements to unlock Europe’s potential as a startup powerhouse, including:
– Standardized company structure: An EU-wide company type with harmonized corporate governance, capital, and share capital maintenance rules.
– Digital-first approach: A fully digital registry, dashboard, and standardized investment documents. – EU-FAST investment instrument: A standard, open-source investment tool inspired by convertible instruments such as SAFEs and BSA AIRs. – EU-ESOP: An EU-wide employee share option scheme with standardized rules.
These standardizations are crucial for helping European startups scale, attract talent, and secure capital on a global stage. Official partners of the initiative are encouraging the wider startup community to actively engage and provide feedback before the formal submission to policymakers by January 2025. The full proposal is seen as a significant push towards making Europe a leading hub for startups, with the ability to compete with other global regions more effectively.
The European Commission’s focus on enhancing the regulatory framework within the EU aims to promote a more robust and secure market environment for companies and consumers alike.
