Europe has a startup international expansion problem it can no longer afford to treat as technical or marginal. Too many promising companies still face unnecessary friction when growing in Europe. The issue is not a lack of talent or ambition. It is that Europe’s legal, regulatory and administrative landscape remains
Elina Berrebi
Europe has a startup international expansion problem it can no longer afford to treat as technical or marginal. Too many promising companies still face unnecessary friction when growing in Europe.
The issue is not a lack of talent or ambition.
It is that Europe’s legal, regulatory and administrative landscape remains fragmented along national lines.
For founders, this means duplicated structures, with inconsistent rules and outdated administrative hurdles. For investors, it means additional complexity during due diligence, higher costs when setting up a company, and excessive time spent unwinding legal structures like layered holding companies or country-specific entities that were never designed for scale. And for employees, it can mean unequal access to equity incentives.
In other words, the current system often – bizarrely – makes it easier for European startups to expand in the US than to navigate multiple European jurisdictions. That reality should concern policymakers.
For growth-stage companies and their investors, this fragmentation is visible in at least three areas. First, corporate structures often become unnecessarily complex as companies expand market by market. Second, the absence of a harmonised stock-option framework makes it difficult to offer consistent equity packages across countries. Third, local employment rules and compliance requirements add costs and delays at every stage of growth.
From Revaia‘s perspective as growth investors, these frictions rarely prevent great companies from succeeding. But they consume time, energy and resources that could be spent building products, hiring talent and expanding into new markets.
This is exactly the kind of problem EU Inc. seeks to solve.
On April 14th, I joined a delegation of tech leaders at the European Parliament to discuss the proposed 28th corporate regime (EU Inc.). The discussion reinforced a simple point: EU Inc. is ambitious, necessary and moving in the right direction. But it is not a silver bullet and treating it as one would be a mistake.
What EU Inc. actually changes
EU Inc. would introduce a single, optional corporate status that founders can adopt anywhere in the European Union from day one.
The proposal includes several concrete measures:
A 48-hour company formation timeline with a cost cap of €100 Full digitalisation, removing mandatory physical presence and intermediaries Automatic mutual recognition across Member States Greater flexibility in governance structures Harmonised timing for stock-option taxation, triggered only upon the sale of underlying shares
These are not minor improvements. Together, they could redefine the starting point for building a company in Europe. Instead of assembling a patchwork structure over time, founders could build on a unified, digital framework from day one.
Getting the priorities right
EU Inc. has prompted debate about what else should be included. Many ideas are valuable but broadening the proposal risks slowing an already complex negotiation. Some objectives, such as full capital-gains tax harmonisation, simplified insolvency procedures and specialised judicial chambers, are better addressed separately or at a later stage.
The priority should be clear: adopt the company-law foundation quickly, then build on it.
However, one addition that would meaningfully strengthen the proposal is a provision on the valuation of stock options at grant. This valuation should be anchored to the most recent arm’s-length financing round or a recognised independent methodology, with a presumption of validity unless there is a manifest error.
Without this, the harmonised taxation timing may not deliver its intended benefits in practice.
The limits of EU Inc.
We should also be clear about what EU Inc. does and does not solve. While it would improve how companies are structured and operate across borders, it does not fix Europe’s capital and liquidity challenges.
Europe does not have a shortage of savings. It has an allocation problem. This gap becomes particularly visible for tickets above €50 million. At that stage, European companies still frequently turn to US investors, list abroad, or sell earlier than they might otherwise choose.
Closing this gap requires a genuine Savings and Investment Union that channels capital into innovation. This could include more targeted investment incentives, inspired by mechanisms such as the UK’s Enterprise Investment Scheme, and a credible framework enabling insurers holding long-dated European Investment Bank bonds to allocate into private growth funds.
Equally critical is the exit environment. As long as IPO conditions in Europe remain less competitive than in the US, the consequences will cascade from seed to growth stages.
Why this moment matters
EU Inc. arrives at a time when its impact could be significantly greater than it might have been a few years ago.
Awareness of technological sovereignty has shifted. “Buy European” is increasingly understood as a pragmatic recognition of strategic dependencies, just like our American and Chinese counterparts do, rather than a form of protectionism.
Meanwhile, tech now accounts for roughly 15% of Europe’s GDP. It is no longer a peripheral sector.
This matters because founders do not scale on signals. They scale on legal certainty, speed, and access to capital. It tells founders, investors and global markets that Europe is serious about enabling companies to scale from within the continent.
The reforms Europe still needs
EU Inc. should be seen for what it is: a first step, and a good one. It demonstrates that Europe can align on structural reforms that matter.
The harder work lies ahead. A reform of speed of capital allocation, liquidity and exit conditions will determine whether Europe can retain and grow its most promising companies.
There is also an opportunity to rethink intra-European consolidation. Acquisitions between European companies should be recognised as a way to retain capital, talent and intellectual property within the Union while building global scale. Merger-control frameworks could assess such transactions through structured, time-limited reviews rather than prolonged uncertainty.
If Europe can combine structural simplification with capital mobilisation and competitive exit pathways, the impact would be transformative.
EU Inc. will not make Europe a growth market overnight. But it would remove some of the avoidable friction that has held European companies back for too long.
First steps matter. This one sends an important signal: Europe is serious about turning regulation from a barrier to scaling into a foundation for innovation.
