The EU Inc Proposal: What It Means for European Startups

Jan de Vries · 2026-09-21

### Why the EU Inc Proposal Matters for Startups If you're building a startup in Europe, you've probably felt the pain of juggling 27 different legal systems. The EU Inc proposal aims to change that by creating a single, pan-European corporate structure. It's a big deal—especially if you're eyeing expansion into markets like Turkey, where European companies have long seen opportunity. Turkey has always been a commercial bridge between Europe, Asia, and the Middle East. For European companies looking to grow beyond their home markets, it offers a large domestic economy, solid manufacturing, and strategic trade routes. But expanding there—or anywhere—requires more than spotting a market gap. You need to think about legal structures, taxes, accounting, hiring, banking, and compliance. ### Why European Companies Look at Turkey Turkey's location makes it a natural hub for businesses operating across Europe, the Middle East, and beyond. Companies consider it for many reasons: - Setting up a local sales office - Manufacturing and production - Import and export - E-commerce - Tech and software services - Regional headquarters - Logistics and distribution - Professional services Your approach depends on your business model. A company that only sells to Turkish customers has different needs than one hiring employees, leasing warehouses, or building a full subsidiary. So before anything else, get clear on what you actually want to do there. ### Setting Up a Legal Presence One of the first decisions is whether you need a Turkish legal entity. You might choose a subsidiary, a branch, or—in rare cases—a liaison office. A subsidiary gives you a separate legal structure, and the most common types are the Limited Liability Company and the Joint Stock Company. Which one fits? It depends on: - Number of shareholders - Investment size - Planned activities - Financing needs - Future expansion - Management structure - Hiring plans > "The right structure isn't about what's easiest today—it's about what supports your goals three years from now." ### Subsidiary or Branch? You don't always need a subsidiary. A branch can work if you want to operate as an extension of your foreign parent. But a subsidiary is a separate Turkish entity, which often makes more sense for long-term operations. Don't just pick the simpler option—weigh the legal, tax, accounting, and operational consequences. ### Taxes You'll Encounter Taxes are a big piece of the puzzle. A Turkish company may face: - Corporate income tax - Value Added Tax (VAT) - Withholding tax - Payroll taxes - Social security contributions - Customs duties - Other transaction-specific taxes Your tax position depends on what you do and how you're structured. Also, consider how Turkish rules interact with international tax treaties—especially if you're used to EU frameworks. ### What the EU Inc Proposal Changes The EU Inc proposal could simplify cross-border operations by letting startups incorporate under a single EU-wide regime. That means less time navigating local rules and more time growing. For European companies expanding into Turkey, it could also streamline how you structure your parent entity, making it easier to manage subsidiaries abroad. It's not a done deal yet, but it's a step toward a more unified European startup ecosystem. If you're planning international growth, keep an eye on this. ### Final Thoughts Expanding into Turkey—or anywhere—takes planning. Understand your business model, choose the right legal structure, and get tax advice early. And if the EU Inc proposal moves forward, it might just make your life a whole lot easier.