.jpg)
It is important to state right from the start that EU Inc. is not intended to replace a Czech limited liability company (s.r.o.) or any other form of company. It is meant to offer entrepreneurs an additional option. You decide whether, for example, you want to set up a "classic" limited liability company (s.r.o.), or enter the European market with an EU Inc.
The European market has approximately 450 million people. In practice, it consists of 27 different legal systems, which significantly limits business scaling and reduces attractiveness to investors compared to jurisdictions like the USA.
"If you want to expand from Prague to Madrid or Berlin, you are faced with meetings with local notaries and lawyers, paying local fees, and navigating local corporate law.
It is no wonder that many innovative firms – startups and technology companies – are leaving for elsewhere," comments attorney, Petra Stoklasová.
EU Inc. is intended to be a limited liability capital company. It will be tied to registration in a specific member state, but internally it will be governed by uniform European rules.
The entire lifecycle of a company will be managed online – from incorporation and administration to potential liquidation.
The European Commission is planning a fast-track registration within 48 hours for a maximum fee of 100 euros, including automatic notification to tax and other authorities.
It will be possible to establish a company with one or more founders, whether individuals or legal entities. And if you already own a company, it should be possible to easily convert it into an EU Inc. – provided, of course, that the pre-established conditions are met.
An EU Inc. can be established with a symbolic amount or even no capital at all. Creditor protection will be ensured through balance sheet and solvency tests.
Company liquidation is intended to be fully digitized, with the proposal also including the option of a so-called fast-track liquidation within 3 months, which is a significant acceleration compared to standard liquidation. The insolvencyregime is designed similarly, intended to be simplified, digitized, and time-limited, with the goal of enabling a quick resolution of bankruptcy, particularly for startup projects.
The shares will be similar in nature to book-entry securities – fully dematerialized and maintained in a digital register. For example, you will be able to issue shares with no par value, create different classes of shares with varying rights, and thus tailor shareholder rights to your specific needs.
The transfer of shares is intended to be fully digital and will not require a third party. Compared to the current regulations in many national systems, this is a huge step forward.
EU Inc. management is designed to be flexible. The proposal allows for various governance models, but the key bodies remain the same – the general meeting and the statutory body.
The general meeting can be handled entirely online.
The liability of members of elected bodies will be based on the concept of the duty of care of a prudent manager.
.jpg)
The new form also introduces a unified European regime for employee stock options – EU-ESO – based on the right to acquire shares in the future.
With taxation deferred until the moment the shares are sold. This eliminates one of the biggest problems with current regulations – the so-called "dry tax," where employees must pay tax the moment the option is added to their assets, even though they haven't earned a cent from it yet. If this change passes, Europe will suddenly become a much more attractive place for talent and investors alike.
For founders and startups this is a potentially huge relief. One company, one set of rules, twenty-seven markets. Expanding abroad (or rather, into the European market) should become faster and cheaper, eliminating the need to study every national regulation individually.
For investors and VC funds the proposal promises lower transaction costs thanks to standardized documentation and a unified corporate framework. Simpler due diligence means more investment in European startups and an easier path to global capital.
For established companies the need to set up local subsidiaries when entering new markets is also eliminated. Conversely, the European market opens up to foreign players who will no longer have to navigate complex national specificities.
The real impact will depend on three things: what the final version of the proposal looks like, how quickly it can be put into practice, and whether entrepreneurs actually start using it. The Commission is now taking the proposal to the European Parliament and the Council. A decision is expected by the end of 2026, which is a fairly ambitious goal.
This could be the biggest shift in European corporate law in years. Even so, despite these ambitions, the proposal raises a number of critical questions.
First and foremost, it must be emphasized that EU Inc. does not represent a complete harmonization of the business environment, as key areas such as tax law, labor law, and certain aspects of insolvency law remain under the jurisdiction of individual member states.
This could lead to a situation where a unified corporate framework operates within different regulatory contexts, which may to some extent weaken its integration potential.
Overall, EU Inc. represents a significant step toward deeper integration and the competitiveness of the European business environment. And a response to a problem that has troubled many entrepreneurs for years.
At endors, we are closely monitoring the legislative development of EU Inc.. Once the final form of the proposal is clear, we will be ready to guide you through the incorporation process and the setup of your internal structure.
Are you considering expanding into Europe and want to know if EU Inc. will make sense for your plans? Get in touch with us.
Petra is an attorney who provides comprehensive legal advice, focusing primarily on litigation, contract law, and corporate law.
Specialization: Mergers & Acquisitions • Contract Law • Corporate Law
.jpeg)
Petra As an attorney and partner at the firm, she specializes primarily in commercial and contract law, with a focus on corporate matters and providing comprehensive legal advice to both Czech and international corporate clients. She has overseen the execution of numerous significant business transactions. Within the firm, she is also responsible for the professional development of junior colleagues.
Specialization: Corporate Law • Mergers & Acquisitions • Contract Law • French Law
%20(1).jpg)
.jpg)