EU Inc. Survives Council Talks: Did Founders Win or Lose?

Jan de Vries · 2026-10-26

On Friday, 23 October 2026, the Council of the European Union adopted its negotiating position on the proposed 28th corporate regime, known as EU Inc. The big promise? Companies could incorporate online within 48 hours for no more than €100 (about $110) and operate seamlessly across the EU single market. The agreement came just over a week after the EU–INC campaign, backed by more than 26,000 founders, investors, and startup operators from across Europe, warned that the legislation was being stripped of its most important provisions. So, are Europe's founders getting what they asked for, or just a watered-down version? ### A win, with strings attached One of the most significant developments is the survival of the proposed European Employee Stock Option Plan (EU-ESO), a mechanism designed to help startups attract and retain talent. In its earlier warning, the EU–INC campaign argued that removing harmonised stock-option rules would undermine one of the framework's central advantages. Startups often depend on equity incentives to compete for employees against larger companies offering higher salaries. The Council has now retained the scheme, including provisions intended to defer taxation until shares are sold, rather than when options are granted, vested, or exercised. However, eligibility has been tightened. The Council's position restricts the relevant tax provisions to companies with fewer than 750 employees and annual turnover not exceeding €150 million (about $165 million), compared with an earlier compromise proposing thresholds of 1,000 employees and €450 million (about $495 million). > "The Council has preserved the original idea of EU Inc. as an optional, digital and Europe-wide regime. But the more restrictions and national safeguards are added, the greater the risk that Europe creates a politically acceptable framework that founders and investors will simply not use." – Dr. Peter Möllmann, founding partner of German law firm PXR ### The missing pieces Other concerns raised by the startup community appear less resolved. The Council's full negotiating mandate confirms that plans for a central European company register have been removed, alongside the requirement for real-time tracking of registrations. Although digital registration and a simplified digital share register remain part of the framework, these are not equivalent to a single centralised European company register. For founders and investors, the distinction matters. A shared registration infrastructure could have helped simplify due diligence, company verification, and cross-border financing. Without it, businesses may still need to navigate different national administrative systems. The Council has also removed the dedicated insolvency chapter from the Commission's original proposal. This means EU Inc. companies would continue to face applicable national insolvency rules rather than benefiting from the proposed simplified European procedures. Another unresolved issue concerns freedom of incorporation. The Council maintains the optional nature of EU Inc., allowing companies to choose the new framework instead of existing national corporate forms. However, the structure will still operate within national legal systems, which will govern matters not harmonised by the regulation. This leaves open the concern that the regime could develop into 27 national variations rather than becoming the recognisable, predictable European standard sought by its supporters. ### A positive spin from the Presidency Despite these concerns, Micheál Martin, Taoiseach of Ireland (the country currently holding the presidency of the Council of the European Union), was positive in his comment shared to the press. > "I warmly welcome the agreement on 'EU Inc.' reached in the Council today. As Presidency, Ireland has placed strong emphasis on improving Europe's competitiveness. This is a measure that will make a real and practical difference to startups and SMEs looking to scale up across Europe." ### What this means for US investors and founders For US-based investors and founders eyeing Europe, the EU Inc. proposal still holds promise: a faster, cheaper way to incorporate and a harmonised stock option plan that could make it easier to hire talent across borders. But the removal of a central register and unified insolvency rules means the landscape remains fragmented. The devil is in the details, and the details are still being negotiated. As the proposal moves to trilogue negotiations between the Council, Parliament, and Commission, the startup community will be watching closely. Will EU Inc. become the game-changer Europe's founders hoped for, or will it be another well-intentioned but ultimately underwhelming framework? Only time will tell.