Russia's Selective Strike: Why EU Firms Are Targeted While US Businesses Breathe Easy

Jan de Vries · 2026-10-22

When Russia announced new measures targeting European companies over Ukraine, you'd think it would hit everyone equally. But here's the twist: US businesses are largely spared. That's not random – it's a sign of warming ties between Putin and Trump. And if you're a European startup with global ambitions, this shift matters more than you might think. Let's unpack what's happening and what it means for your incorporation strategy. ### The Uneven Impact of Russia's Moves Russia's latest actions – whether they're sanctions, asset freezes, or regulatory hurdles – are aimed squarely at European firms. The reason? Retaliation for EU support of Ukraine. But US companies? They're getting a pass. Why? Because Putin and Trump are finding common ground. This isn't just geopolitics – it's a direct signal to entrepreneurs. If you're building a startup in Europe, you're more exposed to these risks than your American counterparts. That's a big deal when you're deciding where to incorporate. ### Why This Matters for EU Startups European startups already face hurdles: fragmented markets, complex regulations, and now, geopolitical blowback. Russia's targeting adds another layer of uncertainty. If you're selling into Eastern Europe or have Russian investors, you could be caught in the crossfire. But it's not all doom and gloom. The EU Inc proposal – a plan to create a unified pan-European incorporation framework – could be a game-changer. It would let startups scale across the EU with a single set of rules, reducing exposure to country-specific risks. ### The EU Inc Proposal: A Shield Against Uncertainty? The EU Inc proposal aims to simplify incorporation across Europe. Imagine a "28th regime" – a legal form that exists alongside national laws but operates EU-wide. That means one company, one set of rules, and the freedom to move capital and talent without red tape. For startups, this could mean: - Easier access to EU-wide funding and talent - Reduced compliance costs - A stronger negotiating position with non-EU partners But here's the catch: it's still a proposal. Implementation could take years, and not all member states are on board. In the meantime, startups need to navigate the current landscape. ### What Should Founders Do Now? If you're a European founder, don't panic – but do pay attention. Here are a few practical steps: - **Diversify your exposure**: If you have Russian clients or investors, consider the risks. Look for alternatives. - **Consider a US entity**: If you're targeting global markets, a US incorporation (like Delaware) might offer more stability. But weigh the costs – legal and accounting fees can run $2,000–$5,000 upfront. - **Stay informed on EU Inc**: Follow the proposal's progress. If it passes, it could simplify your expansion plans. > "Geopolitics is the new variable in your incorporation equation. Ignore it at your peril." – Jan de Vries ### The Bottom Line Russia's selective targeting of European firms is a wake-up call. It shows how quickly geopolitical shifts can affect business. For startups, the key is flexibility. Whether you choose a US entity, wait for EU Inc, or stick with your current setup, make sure your structure can adapt. The EU Inc proposal could eventually make Europe a more attractive place to incorporate. But until then, keep your options open. And watch the headlines – because what happens in Moscow and Washington can impact your bottom line. Want to stay ahead? Keep an eye on EU Inc news and consider how geopolitical trends might shape your startup's future. After all, in today's world, incorporation isn't just about taxes – it's about strategy.