EU Inc: A Strong Foundation To Build On, But More Work Is Ahead
By Elina Berrebi, Founding Partner, Revaia
For years, European founders and investors have described the same frustrations in slightly different words.
Europe’s fragmented legal and regulatory systems turn what should be a simple cross-border scaling and investing into a slow, complex process involving duplicated structures, inconsistent rules, and outdated administrative hurdles.
None of this stops great companies from being built on the continent. But all of it makes their path to becoming global leaders more complicated than it should be.
The European Commission's recent proposal for a 28th corporate regime is an attempt to finally address this conflict at the structural level.
In my roles as both a Vice-President of France Digitale and Founding Partner at Revaia, I’ve been actively engaged in discussions at the highest levels of European policymaking around the future of tech, capital markets, and the regulatory environment for scaling companies. On April 14, I joined a delegation of tech leaders and stakeholders to speak at the European Parliament about the implications of the proposed 28th corporate regime for investors.
As the proposal continues to move through the European Council process, I wanted to share some of my observations about EU Inc. and what comes next.
At Revaia, we see it as one of the most meaningful pieces of company-law modernization Europe has put forward in a generation. However, it is not a silver bullet, and we will come to what it doesn't solve. But the direction is right, the mechanics are largely sound, and the political moment is real.
Why this matters for investors
From a growth-equity perspective, fragmentation is not an abstract problem. It shows up in three places during due diligence:
- Corporate structure: Companies that have scaled across borders often arrive with complex entity maps and governance arrangements inherited from local adaptation rather than designed for scale.
- Employee incentives: Absence of a harmonized stock-option framework makes it genuinely difficult to offer competitive, consistent, and fair equity to engineers in Berlin, Madrid, and Paris.
- Operational and regulatory layers: Employment rules, local compliance requirements, and transaction mechanics that add time and cost at every stage.
Consider one recent example from our own portfolio. When we closed our investment in Synera, a German industrial-AI company, the transaction required a notary process that was several hours long and simply does not exist in most markets. Even at the growth stage, where speed matters enormously, very local, very manual procedures add friction.
This does not make European companies less investable. We continue to back them with conviction. And being an entrepreneur is fundamentally about overcoming obstacles that hold others back.
Still, even if the original intentions were sound, regulations have a way of losing sight of their original purpose and who they should be serving. In many of these cases, these issues create unnecessary costs in time and complexity, and they affect how Europe is perceived globally. International LPs allocating among regions notice the friction, as do European founders. They understand that it is often simpler for a European company to expand directly to the United States as its first international move than to navigate multiple European markets.
EU Inc. addresses the source of that friction.
What EU Inc. proposes
Now widely referred to as EU Inc., the core of the proposal is a single, optional corporate status that founders can adopt anywhere in the Union from day one. The regime is designed to apply broadly to all unlisted companies, and the headline commitments are concrete:
- a 48-hour formation timeline with a cost cap of €100
- full digitalization that eliminates mandatory physical presence and intermediaries
- automatic mutual recognition between Member States
- governance flexibility
- harmonized timing for stock-option taxation, with taxation triggered only upon the sale of the underlying shares.
These are not small details. Together, they change the starting point for a European company.
Under the EU Inc. plan, founders would build on a harmonized, digital framework from the outset. The patchwork structure that growth investors such as Revaia encounter today and spend significant time unwinding would simply not exist.
The right priorities
The nomenclature debate (English, Latin, or a hybrid) over the use of EU Inc. should be resolved quickly and not allowed to derail negotiations. What matters is that the form be identifiable and easily understood by entrepreneurs and investors.
In parallel, several elements currently caught up in the EU Inc. effort would be better addressed via dedicated instruments or later in the future:
- full capital-gains tax harmonization
- simplified insolvency procedures
- specialized judicial chambers
These are all worthwhile objectives. But bundling them into the 28th-regime negotiation risks slowing the core proposal without delivering cleaner outcomes. The priority should be to adopt the company-law foundation quickly and build outward from there.
One addition does belong in the text itself: a clear provision on the valuation of stock options at grant, anchored to the most recent arm's-length financing round or a recognized independent valuation methodology, with a presumption of validity that tax authorities cannot challenge except in cases of manifest error. Without this, the harmonized taxation-timing provision will not deliver its intended effect in practice.
What EU Inc. does not solve
We should applaud this initiative while being honest about its limits. EU Inc. addresses structure. It does not, on its own, address all the issues the European ecosystem must tackle, including capital and liquidity.
Europe does not have a savings problem. It has an allocation problem. The continent holds trillions of euros in low-yield deposits, and not nearly enough of that capital flows into growth equity. The structural gap is most visible at the €50 million-plus ticket size, where European companies still too often turn to American investors, list abroad, or sell too early.
Closing this gap demands a genuine Savings and Investment Union that channels European capital into European innovation. This includes a more disciplined version of mechanisms like the UK's Enterprise Investment Scheme, and a credible "top-up" framework that allows long-dated European Investment Bank bonds held by insurers to flow into private growth funds focused on strategic sectors.
Equally important is the exit side of the equation. As long as European IPO conditions remain less attractive than those in the United States, the entire investment chain is affected, from seed to growth.
Intra-European consolidation, in the form of acquisitions between European companies, should be recognized for what it is: a mechanism that retains capital, talent, and intellectual property within the Union while building the scale required by global competition. Merger-control frameworks ought to assess such transactions through a structured, time-limited review rather than through the indefinite uncertainty of abuse-of-dominance provisions.
The wider moment
EU Inc. arrives against a setting that makes it more consequential than it might have seemed a few years ago. Public and political awareness of technological sovereignty has shifted meaningfully. "Buy European" is increasingly understood not as protectionism, but as the end of a certain strategic naïveté about dependencies. Tech has grown into roughly 15% of European GDP. It can no longer be treated as a peripheral concern.
In that context, a harmonized, digital, pan-European company form is a signal to founders, LPs, and the global market that Europe is serious about creating the conditions for its best companies to scale from here rather than elsewhere.
The proposal is a first step. We should recognize the promise it shows of being able to come together and find solutions at a European scale. The next steps must address capital, exits, and liquidity. Those will be harder and are more important.
But first steps matter, and this is a good one. Now, let’s deliver an unmistakable message to investors and founders across the continent and around the world that European regulation is being transformed from a barrier to scaling to a new foundation for innovation.