EU Inc.: A Flexible but Incomplete Blueprint for European Startup Finance

Abstract

This article examines the financial structure provisions of the EU Inc. Proposal (COM(2026) 321 final) by assessing their innovative scope and their ability to support Europe-wide financing of start-ups and scale-ups. The analysis focuses on the core elements of the financing regime, such as the abolition of the minimum share capital requirement, the erosion of capital maintenance, the introduction of ‘true’ no-par-value shares, the regime governing contributions in kind, and the shift to a distribution regime based on a combined balance sheet and solvency test. The article also considers capital increases, particularly the instruments that entitle the holder to new shares under Article 68 and their relationship with Simple Agreements for Future Equity (SAFEs). Additionally, it explores the EU Inc.’s access to capital markets under Article 60. While the EU Inc. introduces meaningful simplifications, the article shows that it falls short of delivering a genuinely harmonised financing framework. Article 68 is not specific enough to overcome the fragmentation of national SAFE practices, as illustrated by a comparison of the Italian, French and German models. Furthermore, Article 60 raises concerns about regulatory arbitrage by allowing access to regulated markets without adequate safeguards. The article concludes with concrete proposals, including the redrafting of Article 60 and the introduction of a dedicated MTF segment for EU Inc. shares, as well as the Commission’s adoption of a standard financing-contract template backed by a minimal safe harbour to foster a European SAFE.