Will EU Inc be the missing piece in strengthening European competitiveness?
The European Commission has presented its proposal for an optional European company form, a 28th regime or EU Inc. The initiative forms part of a comprehensive set of actions to enhance the competitiveness of the European economy. The ambition is to enable innovative companies to scale up, benefiting from a single, harmonized set of EU-wide rules.
The Confederation of Swedish Enterprise has followed this initiative closely and is now analyzing the proposal in detail. Our objective is to contribute constructively to the process, focusing on how the new regime can fulfil its aims of simplifying applicable rules and helping businesses to scale and attract investment within and into the EU. The European Commission’s focus on simplification and better regulation is welcome, as are the efforts to improve the framework conditions for scaling up businesses in Europe. For a 28th regime to contribute meaningfully to these objectives, it must be well designed, focus on concrete solutions to clearly identified problems, and be able to operate alongside well-functioning national frameworks.
Although the analysis is still ongoing, several potentially positive features can already be identified. The proposed 28th regime is presented as an optional EU company form, established through a regulation, which should help ensure more uniform application across the EU and minimize fragmentation. The proposal also seems to provide a degree of flexibility for companies and investors, with a focus on simplified procedures, digital tools and processes, and the application of the once-only principle. These features may enhance the attractiveness of the new company form.
At the same time, several areas will require further and careful analysis, such as for example the extensive company law framework, proposed insolvency rules applicable to certain EU Inc companies defined as “innovative startups”, the proposed EU employee stock option plans, and rules on financing and capital structures.
The Confederation of Swedish Enterprise stands ready to contribute constructively in the process ahead, focusing on addressing the real challenges businesses face today. While a 28th regime may be a useful tool, expectations must remain realistic. It cannot solve all the current problems and barriers arising from a fragmented single market. Continued efforts by both the EU and the Member States remain essential to improve the conditions for doing business in the EU and to pursue reforms that will genuinely help boost European competitiveness. Important initiatives include the EU:s continued work with better regulation and simplification and the acceleration of the individual Member States’ efforts in these areas.