Europe Is Gutting EU Inc the Way It Killed SPE

On 15 October 2026, the EU-INC campaign told Europe’s heads of government that the pan-European company they had championed no longer exists. Months of Council talks, the group said, have stripped EU Inc toward a faster filing tool that founders will not treat as a standard.

The file is still alive. Parliament’s lead MEPs failed to settle worker board rights on 14 October, and a committee vote slipped to 5 November 2026. The same fight killed the last European private company. It is back.

What EU Inc Would Change for Founders

The Commission tabled a regulation on 18 March 2026, file COM(2026) 321, also numbered 2026/0074(COD), to sit beside national company forms as an optional 28th regime. Founders would form a company online in 48 hours at a maximum of €100, with no minimum share capital, and pick the member state of registration even if staff and tax residence sit elsewhere. A common optional staff share plan, the EU-ESO, would tax the gain when shares are sold, not when a paper option is granted.

Ursula von der Leyen, presenting the package, said any entrepreneur would be able to create a company within 48 hours, from anywhere in the Union, fully online, and she set a wider aim of one Europe, one market, by 2028. The Commission asked Parliament and the Council to agree by the end of 2026. Europe already runs 27 national legal systems and more than 60 company forms, and the Commission said setup can take weeks or months.

EU-INC, a grassroots drive launched in October 2024, now lists 26,000+ founders, investors and operators across 27 countries, including people tied to Stripe, Mistral AI, Klarna and Wise, and funds such as Atomico, Index Ventures and Seedcamp. Co-initiator Andreas Klinger, an investor at Prototype Capital, had argued that a clean, usable form would be the biggest leap for European tech startups in a generation. The campaign’s October letter is blunter. “The EU Inc you championed, one that will enable Europe to compete at scale, no longer exists,” it said. “Months of negotiations have removed the core of the proposal. As it stands, it will do nothing to improve Europe’s competitiveness.”

THE FIVE CLAUSES FOUNDERS SAY MUST SURVIVE

• Registration seat: Founders pick the member state of the registered office even if they hire and pay tax somewhere else, so one legal home can become a market standard.
• Central register: One digital file with shared KYC, AML and ownership data, not 27 national logins behind a web front.
• Open access: No sector lists, headcount caps or revenue tests that turn the form into a shifting club.
• Staff shares: A common EU-ESO with tax only at sale and a safe-harbour value at grant, so early hires are not taxed on paper gains.
• Local labour and tax: Pay, dismissal rules and tax still follow where people work and where the firm actually runs, not the brass plate.

Those five non-negotiables for a usable standard are the test the campaign is now taking to prime ministers, because a form nobody uses is a press release.

The €100 Company Still Needs a Register

The March text split the digital plumbing into two steps: an EU-level interface that talks to national business registers, then a new central EU register. Banks, investors and courts were supposed to pull one company record. The Irish presidency, which has run the Council file since 1 July 2026, issued a first full compromise on 17 July that deleted the central register. EU-INC now stamps that clause “removed in draft” and says a European company would still need 27 national logins.

A portal into national systems does not give an investor one trusted file, and it does not give a bank a single KYC pass. Faster formation is cheap theatre if every later step, from a share transfer to a current account, falls back into local databases. That is the cut that turns EU Inc into a sticker on a GmbH, a BV or an SAS.

COMMISSION TEXT VERSUS THE JULY COUNCIL DRAFT

A second, unpublished Irish text on 7 September added harder checks at formation, aimed at letterbox firms. The campaign set a 100-day push from 3 September while the final wording is still open. Its 15 October post asked heads of state to pull their teams back to the original offer.

Europe’s founders need a European standard to compete globally from day one.

Europe’s leaders committed to delivering one. But their teams are negotiating away the very things that make it one.

There is still time to change course if Europe's Heads of State step in now. pic.twitter.com/L9Qt8RuAFW

— EU–INC (@euinc_petition) October 15, 2026

Brussels Has Walked This Path Before

On 25 June 2008 the Commission tabled a regulation for a European private company, the Societas Privata Europaea, or SPE, so small firms would not have to reincorporate in every country where they traded. Minimum capital was set at €1. The legal base was Article 352, which needs unanimity. Worker board rights, the German co-determination model, and the fear that a light foreign form would undercut national companies blocked a deal. After a public Council debate in 2011 still failed to find every capital in the room, the Commission withdrew the SPE statute in 2014.

A thinner follow-up, the single-member SUP, was then pulled as well. EU Inc is the restart, this time as a regulation under Article 114, which can pass by qualified majority and does not wait on every tax ministry. That was the point of the new base: escape the SPE veto. The political meat did not move. Worker seats, national registers, notaries and the timing of tax on staff shares are again the clauses that decide whether the form is real.

FROM THE SPE TO THE OCTOBER APPEAL

1. 25 June 2008: Commission tables the SPE as an EU private company, with €1 minimum capital and a unanimity legal base.
2. 21 May 2014: Commission withdraws the SPE after years of talks that never cleared worker-board and sovereignty fights.
3. 18 March 2026: Commission tables EU Inc as a regulation, with 48-hour digital formation and a maximum of €100.
4. 17 July 2026: Irish presidency compromise deletes the central register and caps the EU-ESO at fewer than 1,000 staff and less than €450 million turnover.
5. 15 October 2026: EU-INC tells heads of government the company they championed no longer exists.
6. 5 November 2026: Parliament committee vote, already slipped from 19 October, is due on worker participation.

Simon Schaefer, a campaign co-initiator, warned in 2024 that the 28th regime could not be a text designed in a Brussels back room. Two years later the back room is exactly where the register and the share plan are being rewritten.

Stock Options Hit the Tax Unanimity Wall

Staff shares are how a small firm hires against a bank or a US platform that can pay cash. In much of Europe an employee is taxed when an option is granted or exercised, before any sale, which is why Carmen Alfonso Rico of Cocoa Ventures has described schemes that tax money you have not got. The March EU-ESO tried to freeze that bill until disposal and add a safe-harbour value at grant.

The July compromise kept a plan on paper and then fenced it. Only companies with fewer than 1,000 employees and less than €450 million in turnover would get it. That is a size test smuggled into the talent clause, and it still may not survive. Ambassadors left Coreper on 30 September without a deal on if and when those options are taxed. Diplomats described the file as stuck because many capitals see a harmonised tax moment as a hit on national tax law, which they say still needs unanimity.

Germany, France, Italy, Spain and Romania have treated the share plan as the main reason to bother with a 28th regime. Luxembourg, Belgium, Sweden and Poland sit among the governments that, people in the talks said, would rather sink the regulation than accept that tax timing. Stéphane Séjourné, the commissioner for prosperity and industrial strategy, told industry ministers on 24 September he cannot see the 28th regime without stock option harmonisation, and that much of what makes the initiative attractive will disappear if it is removed.

Tax is the SPE veto in new clothes. Article 114 can outvote a notary lobby on a register. It does not, in the minds of those finance ministries, rewrite when a worker pays income tax.

Esther Lynch Wants the File Withdrawn

Unions never bought the Commission’s comfort line that national employment and social laws are “not affected.” The European Trade Union Confederation says a firm could register where board rights are weak, operate elsewhere, swap wages for options, rush insolvency without unpaid-wage protection, and split staff across subsidiaries to stay under works-council thresholds. In a 23 June letter to Commissioner Michael McGrath, the ETUC said the Council Legal Service had concluded that Article 114 TFEU alone is the wrong base, and that a directive under Article 50 would have been the proper tool. On 24 June Esther Lynch, the confederation’s general secretary, told the Commission to pull the text.

The reports about the serious legal shortcomings of the ‘EU Inc’ proposal are the result of the short cuts the Commission has tried to take to force it through without transparency and proper safeguards.

Esther Lynch, General Secretary, European Trade Union Confederation

Lynch said it would be a costly mistake to press ahead with a draft that risks being struck down later, along with every company formed under it. She asked the Commission to withdraw the draft and write a directive with the safeguards it promised. The campaign’s own fifth clause tries to close the labour hole from the other side: if you hire in Germany, German labour law applies to those workers, and the registered office does not rewrite that. Founders and unions still do not agree that the present articles actually do that job.

WHERE EXPERTS DISAGREE

• Founders and Séjourné: Without a common share plan taxed at sale, and without one register, EU Inc will not be used, so the competitiveness offer is empty.
• Finance ministries: Timing of tax on staff shares is national tax policy, and a company-law regulation cannot impose it without the usual tax veto.
• ETUC: Article 114 is the wrong base for a parallel company form that touches jobs, and the text should be pulled before courts pull it later.

Livia Spera, general secretary of the European Transport Workers’ Federation, said Europe needs growth but the 28th regime must not weaken worker participation or lower social standards. Transport unions have a rally in Strasbourg on 20 October 2026 while MEPs are still on the file.

Board Seats Stop the Parliament Clock

The evening of 14 October, Parliament’s rapporteurs again failed to close the chapter on workers’ right to sit in company governance. Socialists and Greens have made it a red line. They want a fallback: if union-management talks fail, the participation threshold of the most demanding country of operation would apply to the whole EU Inc, even if the firm is registered in a lighter state. That is the SPE fight, restated as a conflict-of-laws rule.

A committee vote that had been aimed at 19 October is now set for 5 November 2026. René Repasi is leading Parliament’s work. Other group negotiators named in the public push around the vote include Axel Voss, Pascale Piera, Mario Mantovani, Pascal Canfin, Sergey Lagodinsky, Kira Marie Peter-Hansen, Arash Saeidi and Marcin Sypniewski. The employment committee had already, on 10 September, pushed to narrow the form toward startups, add co-determination, and keep options from replacing wages.

Each of those amendments answers a union fear and chips at the reason a founder would pick EU Inc over a Delaware corporation or a local SAS. A company that is “European” only until the first hire in a second country is not a standard. It is 27 standards with a shared logo.

Delaware Remains the Easy Backup

Eileen O’Mara, vice chair of Stripe, said on 16 October that EU Inc will succeed only if founders and investors choose to use it, and that a watered-down form will send them elsewhere to scale. That is already the default. Angel investors have walked away from German GmbH rounds after seeing the form, and from Slovenian paper that cost more to read than a small cheque was worth. Simon Leicht, general partner at SDAC Ventures, put the result in one line: Europe is exporting its future unicorns because of its own bureaucracy.

A hollow company form is a weak reply to a decade in which capital, talent and product cycles have concentrated outside the Single Market. The March offer, 48 hours and a maximum of €100, still looks like a fix on a slide. The July register cut, the 1,000-staff options fence, the 30 September tax deadlock and the 14 October board-seat failure are the parts a founder actually reads. If those stay in, the rational move is still a US corporation and a European sales shop.

Heads of government have been asked to give their teams a new mandate before the 5 November vote and before the Irish presidency tries another Coreper pass. Europe’s founders, the campaign’s last line said, will have a future. Whether that future is European is in those rooms.