What benefits will the new EU Inc. legal framework bring to start-ups?

A new legal framework for European entrepreneurship

During the World Economic Forum in Davos, the President of the European Commission, Ursula von der Leyen, announced plans to promote EU Inc., a new legal structure aimed at creating a truly European business space. The goal is to allow start-ups to operate across the European Union with the same freedom as capital and data do today.

Currently, many innovative companies are forced to relocate their headquarters outside of Europe to grow, primarily due to the existence of 27 different legal and tax frameworks. In response to this fragmentation, the Commission is proposing a twenty-eighth regime, optional and complementary to national regulations, which would allow companies to operate under a single set of rules across the EU.

Incorporation in 48 hours and reduction of administrative barriers

One of the most significant aspects of the future EU Inc. is the possibility of constituting a company in less than 48 hours in a fully digital manner, through a common European access point.

For Leticia Domínguez, partner at ECIJA, this measure represents "a decisive leap forward in agility and operational simplification for start-ups", by eliminating a large part of the bureaucratic burden that currently delays entrepreneurship in the single market. As she explains, the initiative would reduce bureaucratic hurdles, avoid travel, and eliminate the need to navigate multiple regulatory systems simultaneously.

"EU Inc. will allow new companies to focus from the start on their business and growth, rather than complying with the regulations of various states", Domínguez points out.

A figure with automatic recognition across the EU

From a corporate perspective, the ECIJA lawyer emphasizes that start-ups opting for this regime could be established as a corporate entity with automatic recognition in all Member States, which would facilitate operations, attract investment, and establish branches or headquarters in different countries from a very early stage.

This approach, he adds, would help reduce legal costs, expansion times, and administrative barriers, strengthening Europe's position as an attractive environment for fast-growing technology companies.

Impact on investment and European competitiveness

The announcement has been well received by the investment ecosystem, which sees EU Inc. as an opportunity to strengthen the EU's capacity to compete with jurisdictions such as the United States. The possibility of having a clear, uniform, and predictable legal framework would facilitate the mobilization of capital and the entry of international investors, especially in larger funding rounds.

In this regard, Domínguez points out that the European initiative is directly linked to market demands: "Simplification and legal certainty are key factors for both entrepreneurs and investors."

Remaining challenges and timeline

Despite the optimism, the EU Inc. initiative is still in its early stages. Its implementation will require political consensus among Member States and a clear definition of its regulatory and fiscal scope. The timeline will depend largely on whether the initiative is ultimately articulated as a regulation—of direct application—or as a directive.

However, the announcement marks a shift in direction in European economic policy and opens a key debate on how to build a true single market for innovation.

Complementarity with the Spanish Start-up Law

The initiative bears similarities to the Spanish Start-up Law, in force since 2022, regarding the reduction of administrative barriers and the digitalization of procedures. However, as Leticia Domínguez points out, EU Inc. goes one step further by offering an immediate European projection, which allows the benefits of a favorable framework to extend beyond a single country.

In general, EU Inc. is shaping up to be a strategic tool for strengthening the European entrepreneurial ecosystem, provided it can be implemented in a simple, effective, and truly harmonized framework.

Read the full article published in Expansión here.