The European Union is introducing a new standardised company form, "EU Inc.", designed to make it faster, cheaper and simpler to set up a business anywhere in the bloc, European Commission President Ursula von der Leyen announced on Wednesday. "Every entrepreneur will be able to set up a company within 48 hours, completely digitally and from anywhere in the European Union," von der Leyen said, presenting the initiative in Brussels.
Currently, the EU's 27 member states have more than 60 different company forms, according to the Commission. The rules governing a German GmbH differ from those applying to a comparable company in France or Ireland, making it complicated for small businesses to establish a presence in another EU country, and deterring investors from other member states.
The Commission now plans to create a central website where entrepreneurs can register for a maximum of one hundred euros and within two days. The information would automatically flow to national registers in all 27 member states. The new company would receive tax and VAT numbers without any further applications required.
New investments and the transfer of shares would also be handled digitally under the new system. The same would apply to insolvency proceedings. "This enables founders to test innovative ideas, and to start fresh if necessary," the Commission said. The Commission's central aim is to prevent successful startups from leaving and continuing to grow, and eventually listing on stock exchanges, in the United States or elsewhere. Past examples include music streaming service Spotify and financial services provider Klarna.
German business associations welcomed the fact that the new legal form is open to all companies, startups and established firms alike. EU Inc. could "significantly ease expansion in the single market" for companies, said Holger Lösch, Deputy Director General of the BDI industry association.
The German Chambers of Industry and Commerce (DIHK) called for the proposals to be implemented swiftly. DIHK Chief Legal Officer Stephan Wernicke warned against "making special interests in labour law, insolvency law or financing law preconditions for the overall project" and thereby complicating the legal form. He pointed out that a unified EU company form had existed in previous decades but was barely used due to high barriers to entry.
Trade union federations had warned in advance that the new company form must not undermine the labour rights of different countries. The Commission is now proposing that employees be governed by the laws of the country where they carry out the majority of their work, covering areas such as minimum wage, working hours, safety provisions and works councils.
The Brussels proposals now move into negotiations in the European Parliament and the Council of the 27 member states. The Council has set itself the goal of adopting the new legal form by the end of the year, though the consultations are likely to take several months in any case.
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