The 28th regime will transform Europe’s startup landscape by removing one of the largest structural weaknesses in the Single Market: legal fragmentation. Today, entrepreneurs expanding across borders face 27 company laws, duplicative filings, and costly compliance hurdles that push many to incorporate in Delaware or the U.K. A single EU-wide company form eliminates these barriers by offering one legal identity, one registry, and harmonised governance rules across all Member States. This measure alone addresses the most cited reason why Europe loses its best scale-ups and why 30% of unicorns relocate to the U.S.—funding and scaling are dramatically easier in a unified legal environment.
The economic upside is significant. Studies show that completing the Single Market could add up to 7–9% to EU GDP; corporate law harmonisation, combined with digitalisation, is a direct step toward that goal. Capital Markets Union projections estimate that deeper integration could unlock €2 trillion in long-term capital and channel an additional €50 billion annually into European companies. With Europe’s venture capital investment at just 0.03% of GDP versus 0.19% in the U.S., the 28th regime is essential to closing this gap. Redirecting even part of the €300 billion of EU household savings that currently flows abroad would fund thousands of startups and high-growth firms.
Beyond financing, the regime slashes compliance costs and speeds up market entry. Administrative burdens cost EU businesses €285 billion annually, and multi-country legal compliance can add €50k–€100k per expansion. The new framework introduces a single digital registration valid across Europe, cutting costs by 30–40% and targeting incorporation within 48 hours instead of weeks. In early-stage growth, every week saved matters: delays can cost startups €50k–€200k in lost revenue and erode their competitive edge. Estonia’s digital-first incorporation model already demonstrates the power of such systems, reducing setup times by 80% and attracting thousands of foreign founders.
The talent dimension is equally critical. Startups compete globally for skills, yet fragmented labor and equity rules make EU-wide hiring difficult and stock options nearly unworkable across borders. The 28th regime proposes a harmonised stock option framework and simplified cross-border employment procedures. This addresses the reality that 84% of SMEs report talent shortages as a barrier to growth. Where equity incentives were aligned, as in Nordic reforms, startup hiring increased by 30%. For Europe to retain and attract top engineers, these legal fixes are indispensable.
Digitalisation underpins the regime and reinforces its efficiency and trust. By leveraging eIDAS and the forthcoming European Digital Identity Wallet, the entire company lifecycle—from registration to filings—will become paperless, secure, and fraud-resistant. Digital integration has already proven to save billions, with initiatives like the Single Digital Gateway projected to deliver €20 billion in annual savings and eIDAS reducing cross-border transaction costs significantly. For investors, a central EU register ensures transparent, tamper-proof data, boosting confidence in cross-border deals.
This is not just an administrative reform; it is a strategic competitiveness tool. Europe’s fragmented legal environment is one of the core reasons why the EU produces more startups than the U.S. but far fewer global champions. Unified company law is the missing piece to make the Single Market real for entrepreneurs. Analogous efforts—such as the euro, UCITS fund passport, and crowdfunding regulation—unlocked massive gains in trade and capital flow. The 28th regime is poised to do the same for innovation-driven businesses, making Europe an attractive home for founders and investors.
In short, the 28th regime is arguably the most critical legislative project for Europe’s economic future. It could unlock tens of billions annually in investment, retain unicorns that currently leave, create millions of jobs, and boost GDP by several percentage points over the next decade. Without it, Europe risks remaining a fragmented, second-tier ecosystem while the U.S. and China pull further ahead. This measure is not optional; it is Europe’s chance to create a true single market for entrepreneurship and secure its position as a global innovation leader.
Why it matters: Legal fragmentation makes cross-border investment costly and risky.
Impact: A single EU company form reduces investor uncertainty, attracting more VC and private equity.
Evidence: CMU estimates €2 trillion in untapped EU savings, with €50 billion/year extra funding possible. U.S. VC/GDP ratio is 6x EU’s—harmonisation narrows the gap.
Why it matters: Scaling startups = more innovation, exports, and jobs.
Impact: Easier scaling accelerates unicorn creation and tech-driven productivity.
Evidence: Completing Single Market could add up to 7–9% to EU GDP; even partial harmonisation in company law moves Europe toward that.
Why it matters: Startups waste huge resources on redundant filings and legal fees.
Impact: One registration, one reporting regime = thousands of euros saved per company, billions EU-wide.
Evidence: EU administrative burden = €285 billion/year; digital-first company law cuts 30–40% of compliance costs.
Why it matters: Delays kill early-stage startups by burning runway and missing opportunities.
Impact: 48-hour EU-wide incorporation target vs weeks today.
Evidence: Digitalisation pilots cut setup times by 80%; each month of delay can cost startups €50k–€200k in lost revenue.
Why it matters: Talent shortages and fragmented equity rules weaken EU startup competitiveness.
Impact: Unified ESOP rules + easier cross-border hiring attract and retain top talent.
Evidence: 84% of SMEs report skill shortages; harmonised stock option laws increase retention and reduce churn.
Why it matters: Scale-up funding gap pushes EU unicorns to relocate abroad.
Impact: Uniform governance and shareholder rights simplify fundraising across borders.
Evidence: 30% of EU unicorns moved HQ to U.S.; harmonisation could reverse this trend, keeping billions in enterprise value in Europe.
Why it matters: Manual processes create delays, errors, and compliance risk.
Impact: Fully digital company lifecycle (eIDAS, EU Digital Wallet) lowers costs and improves trust.
Evidence: Digital Single Gateway projected to save €20 billion/year; eIDAS already cuts paperwork and fraud risk.
Why it matters: U.S. and China benefit from unified legal and financial systems; Europe must catch up.
Impact: One legal regime turns 27 fragmented markets into a true Single Market for entrepreneurs.
Evidence: Single Market completion in goods/services boosted GDP by 4%+; corporate law harmonisation replicates these gains for startups.
Capital is the lifeblood of scaling. Today, Europe suffers from shallow and fragmented capital markets compared to the U.S. or China. U.S. startups incorporate in Delaware because:
One legal form = access to all 50 states.
Predictable governance and investor rights.
Easy IPO process and deep integrated capital market.
Europe’s fragmentation creates the opposite:
Investors face 27 sets of rules → higher legal costs → lower cross-border funding.
Startups “flip” to the U.S. to raise large rounds.
The 28th regime directly targets this by harmonising company law, offering one EU-wide legal identity recognized in all Member States. This does three things:
Reduces legal risk premium for cross-border investors.
Simplifies due diligence (same governance and insolvency rules).
Enables fundraising under a single regime (aligned with CMU and the EU Listing Act).
Investor confidence rises when rules are uniform → capital flows increase.
Eliminates legal costs that deter smaller investors from going cross-border.
Stops “Delaware flips,” keeping high-value startups (and their IPOs) in Europe.
Connects with CMU reforms → deeper markets mean more liquidity for exits (IPOs, acquisitions).
€300 billion/year of EU household savings currently invested outside the EU could be redirected if capital markets integrate better (Letta Report).
Europe’s VC gap: U.S. captures 52% of global VC vs EU’s ~5% (Draghi Report).
30% of EU-born unicorns relocated to U.S. between 2008–2021 mainly for better capital access.
CMU estimates full integration could unlock €2 trillion in long-term capital and €50 billion/year additional funding for EU companies.
Crowdfunding passport success: After harmonisation under ECSP, cross-border platforms grew significantly—proving uniform rules spur funding.
Investment fund “passport” (UCITS) allowed funds to scale EU-wide, attracting €11 trillion AUM today—showing the power of one EU regime.
Fragmentation cost: A single Series A round across three jurisdictions adds €50,000–€100,000 in legal costs and delays up to 3 months.
U.S. example: Delaware C-corp structure is cited by 90%+ of U.S. unicorns as the reason they could attract international VC with minimal legal friction.
European IPO markets lag: EU IPO volumes are ~1/3 of U.S. levels, partly due to legal complexity and fragmented standards.
Studies show legal harmonisation correlates with higher cross-border investment flows by reducing transaction costs and uncertainty (EIB and OECD reports).
Taxation remains national: Differences in capital gains and corporate tax could still create barriers.
Investor habits: VC networks are still mostly local; cultural inertia may slow pan-EU funding.
No guarantee of liquidity: Without strong EU IPO markets, later-stage exits remain a challenge.
Political risk: Member States might resist harmonising investor protections or insolvency rules fully, reducing effectiveness.
GDP growth from startups comes from:
Productivity gains (innovation diffuses into economy).
Job creation in tech sectors and supply chains.
Export potential when companies scale globally.
Legal fragmentation throttles this because:
Startups stay small or leave Europe → less scaling → less economic contribution.
Complexity = higher costs → less capital for R&D → slower innovation.
The 28th regime removes these structural brakes.
Scaling faster = earlier contribution to GDP.
More unicorns in Europe = higher aggregate enterprise value retained in EU markets.
Lower compliance burden frees resources for innovation, not bureaucracy.
Innovation gap: EU lags U.S. in deep-tech scaling; bridging gap could add 1.5% to EU GDP (Draghi estimate).
Startup exit value: European IPO markets underperform; catching up to U.S. levels would mean €200–€300 billion more annual listings.
Lost scale-up value: Every unicorn relocating abroad is a GDP leakage worth billions (UiPath moved to U.S.; current valuation ~$10B).
Fragmentation cost estimate: Completing Single Market for services is worth ~€300 billion/year to EU GDP (CEPS studies)—28th regime addresses the corporate law component.
World Bank ease-of-business rankings correlate with GDP per capita; simplifying incorporation improves Europe’s position.
Estonia’s e-Residency (fast digital company setup) boosted its GDP by 0.3% annually—28th regime applies similar logic EU-wide.
SMEs employ ~100 million people in EU; reducing regulatory burden can free resources for expansion, creating millions of new jobs.
OECD data: Each 1% reduction in regulatory burden adds 0.4–0.6% GDP long-term—28th regime slashes compliance for growth firms.
Eurochambres survey: 68% of SMEs say legal fragmentation is a major barrier; removing this would increase cross-border trade.
Single market completion in other areas (goods) delivered 4% GDP boost in the 1990s—corporate law harmonisation could replicate part of that.
Fragmented tax regimes still impose costs; 28th regime doesn’t fix fiscal heterogeneity.
Skills gap persists: Legal simplification won’t solve talent shortages.
Digital infrastructure uneven: Some states lack the readiness for full digital incorporation.
Complementary reforms needed: Capital Markets Union, Listing Act, and insolvency harmonisation must advance in parallel.
Today, startups expanding across EU borders face duplicative legal obligations:
Separate incorporation in each Member State.
Multiple sets of filings, translations, notary fees, and annual reporting obligations.
The 28th regime replaces this with:
One registration → valid in all 27 countries.
Digital filings and standardized governance templates across EU.
This eliminates structural inefficiency. Legal complexity acts like a “tax” on growth—draining cash and slowing momentum. Removing this tax means startups can redirect resources to product, hiring, and market expansion instead of paperwork.
Early-stage companies are resource-constrained. Cutting compliance costs extends runway by months, which often determines survival.
Legal simplicity attracts founders who might otherwise incorporate in the U.S. or U.K.
Compliance savings compound at scale: larger teams spend less on lawyers, CFOs, and regulatory consultants.
€8,000–€15,000: Typical legal cost per country for incorporation and filings; expansion into 3 countries adds €30k+.
Eurochambres survey: 68% of SMEs cite legal complexity as major scaling barrier.
Administrative burden costs EU businesses €285 billion/year (European Commission impact assessment).
Estonian e-Residency saved foreign founders 50–70% incorporation costs, demonstrating digital-first models.
EU Digitalisation Directive pilot projects show online-only registration slashes startup costs by 30–40%.
Companies forming a Societas Europaea spent €50k–€100k in restructuring fees, proving fragmentation is costly.
Firms waste 1–3 months handling multi-country compliance—time they could spend on market growth.
For fintechs, licensing across 5 markets can add €500k legal overhead—barrier to scaling that 28th regime neutralizes.
OECD research: Cutting regulatory costs by 10% can increase SME productivity by ~2% annually.
Commission estimate: “One-stop shop” for companies could save billions across EU if widely adopted.
Certain sectoral licenses (e.g., financial, health) will still require national authorisations.
Tax reporting remains fragmented without deeper fiscal harmonisation.
Without strong digital rollout, some countries may lag in integration.
Speed is everything for startups:
The faster they launch, the faster they generate revenue and attract customers.
Delays in incorporation delay funding rounds and market entry.
Today, incorporation in EU takes days to weeks; scaling to multiple states adds months. The 28th regime sets a target of 48-hour online registration via an EU-level portal. Real-time validation through eIDAS and blockchain-based registries further accelerates compliance.
First-mover advantage matters in tech—weeks can decide market leadership.
Speed reduces burn rate (startups don’t pay teams to wait for legal setup).
Investors favor jurisdictions where deals close quickly—more capital flows in.
U.S. Delaware incorporation takes 1 day; Europe can take weeks—this gap is why founders flip.
Estonia’s instant incorporation model boosted its foreign startup base by >25% in 3 years.
EU Commission target: 48-hour online company setup as competitiveness benchmark.
Cost of delay: A 1-month delay in market entry for SaaS startups = €50k–€200k lost revenue.
VC frustration: 60% of investors surveyed cite legal delays as deal-killer for early rounds.
Startup Genome report: “Regulatory delay” correlates with higher startup mortality in first 24 months.
Legal harmonisation in EU transport (EASA licensing) cut certification times by 40%—similar effect expected for business registration.
U.S. unicorn creation rate: 4x faster than EU, largely due to speed and simplicity of setup.
Digitalisation pilots (Portugal, Denmark) cut incorporation time by 80%—proves feasibility.
Every day of delay reduces NPV of a startup project by €3k–€10k, based on average burn.
Fast registration doesn’t guarantee fast banking (KYC delays can persist).
Some Member States may still impose formalities despite EU framework.
Cultural inertia: founders and lawyers may hesitate to adopt new processes early on.
Talent is as critical as capital for scaling startups. Yet Europe’s fragmented labor and equity frameworks create severe friction:
Startups must navigate 27 employment regimes, making cross-border hiring costly and legally risky.
Stock options, a key retention tool in tech, face inconsistent rules and tax treatment across Member States.
The 28th regime introduces:
Unified EU-wide stock option framework under the new legal form.
Simplified templates for cross-border hiring, leveraging mutual recognition and digital ID systems.
Talent shortages are cited by 84% of SMEs as a top barrier; reducing friction expands the talent pool.
Stock option harmonisation helps EU startups compete with U.S. firms, where equity is a standard incentive.
Streamlined hiring lowers HR overhead and speeds team building across markets.
84% of EU SMEs report lack of skilled workers as a barrier (EIB Investment Survey).
U.S. tech employees often receive 10–20% of comp in equity, while EU equivalents face tax penalties.
Companies offering ESOPs have 2x lower churn and higher productivity, per OECD analysis.
Lack of unified ESOP rules = startups hire consultants for each jurisdiction → €20k–€50k cost per plan.
Talent retention failure costs Europe billions: 30% of EU unicorn founders relocate for better incentives.
Nordic “stock option reform” saw startup hiring accelerate by 30% post-harmonisation.
Estonia’s startup visa + digital employment model attracted >3,000 foreign tech workers—legal simplification works.
Each high-skilled hire can add €100k–€300k to GDP/year in innovative sectors.
ESNA report: stock option harmonisation is among the top 3 policy demands of EU startups.
U.S. retains talent because equity = wealth creation; EU loses top engineers to Silicon Valley because current systems are punitive.
Tax regimes remain national → inconsistent taxation on options persists unless coordinated.
Labor law basics (social contributions, dismissal) stay fragmented.
Cultural hesitancy in some Member States toward equity-based compensation.
Europe’s startup ecosystem suffers from a scale-up funding gap:
VC activity per capita is 5–6x higher in U.S. than in EU.
Cross-border investment is limited due to legal uncertainty and fragmented corporate structures.
The 28th regime enables:
Single legal form recognized EU-wide → investors deal with one predictable governance system.
Simplifies share classes and convertible instruments used in venture financing.
Investors demand legal clarity; standardisation cuts risk and cost → more deals, bigger rounds.
Pan-European funding syndicates become viable, pooling deeper capital for late-stage growth.
Reduces Delaware flips → keeps IPO value and jobs in Europe.
EU unicorn relocation: ~30% moved HQ to U.S. mainly for funding ease (Dealroom).
U.S. VC per capita: $300 vs EU’s $60 (European Commission).
€2 trillion in EU household savings could be mobilised if capital markets integrate (Letta Report).
CMU reforms projected to add €50 billion/year in corporate financing via integration.
Multi-jurisdictional legal compliance for Series B adds €100k+ in legal fees—deterrent for cross-border investment.
Lack of legal harmonisation increases investor due diligence costs by 20–30%, per EIB analysis.
European IPO volumes are ⅓ of U.S. levels, partly due to legal fragmentation.
Harmonised fund passport (UCITS) scaled to €11 trillion AUM—shows single regime unlocks massive financial flows.
PE/VC funds cite fragmented shareholder rights as key barrier to pan-EU funds.
OECD correlation: Harmonised legal environments → 40% higher cross-border deal volume.
Without CMU progress, liquidity for IPOs and exits remains weak.
U.S. still offers deeper pools of capital and mature ecosystems.
Political risk: Member States could resist insolvency and investor protection harmonisation.
Currently, corporate processes across the EU remain highly manual:
Physical notarisation in some Member States.
Multiple national registries with limited interoperability.
Paper-based compliance → higher risk of fraud, identity misuse, and delays.
The 28th regime introduces:
A fully digital company register integrated with eIDAS (electronic identity and trust services).
Verifiable credentials and cross-border recognition of filings.
Real-time validation (e-signatures, blockchain for data integrity).
Digital-first processes cut admin costs by up to 30%.
Improves transparency → reduces fraud and money laundering risk.
Builds investor and public trust by making corporate data accessible and tamper-proof.
eIDAS implementation reduced admin burden for businesses, leading to measurable cost savings and efficiency gains.
Estonia’s e-Governance model enables instant company setup and saves millions annually in compliance costs.
Paper-based notarisation in some EU states costs €500–€1,500 per action; digitalisation removes this.
Fraud prevention: Single digital registry and KYC integration could cut €10–15 billion/year in fraud losses (EU AML estimates).
EU’s Single Digital Gateway projected €20 billion in annual savings for citizens and businesses by 2030.
Cross-border data interoperability accelerates trade and financing—companies verified once, trusted everywhere.
Implementation of BRIS (Business Registers Interconnection System) shows digital linking reduces turnaround by 40%.
Administrative digitalisation correlates with higher FDI inflows: +7–10% (OECD study).
Digital reporting in Denmark and Portugal slashed compliance processing times by 80%.
EU Digital Decade targets include 100% digital public services by 2030—this regime is a core enabler.
Requires full Member State digital infrastructure alignment—laggards could slow implementation.
Cybersecurity risks need robust EU-wide controls.
Some sectors (regulated industries) will still require manual checks.
The EU has a structural disadvantage compared to the U.S. and China:
Fragmented regulatory frameworks create friction and increase scaling costs.
Result: Fewer global champions, less R&D intensity, and weaker innovation ecosystems.
The 28th regime aims to operationalise the Single Market for companies:
Creates one EU-wide legal environment for business operations.
Enhances the attractiveness of Europe for founders and investors.
Similar to how the euro eliminated currency barriers, this regime eliminates legal fragmentation.
Retains talent and capital inside Europe rather than losing them to Delaware or Singapore.
Makes Europe a serious global competitor in tech and deep innovation.
The euro’s introduction boosted intra-EU trade by 5%+—legal harmonisation has analogous effects on business integration.
Completing the Single Market in goods/services added 4% to EU GDP; corporate law harmonisation can replicate a share of that.
U.S. dominance in VC (52% global share) correlates with a unified market—EU is stuck at 5% due to fragmentation.
Large digital single markets (U.S., China) produce 10x more unicorns per capita than EU—market scale matters.
Companies incorporated under the SE (Societas Europaea) showed faster cross-border M&A, proving the benefit of unified forms.
“28th regimes” in other domains (UCITS, SEPA) unlocked trillions in finance and billions in annual savings.
EU economy could gain €90–110 billion over a decade from SME scaling reforms (EC projections).
Startup Genome notes that every additional unicorn adds ~€1.2 billion GDP impact—retaining more = huge gains.
Europe’s innovation gap costs €270 billion/year in lost opportunities—fragmentation is a key driver.
Letta Report: “Creating a pan-European business identity is essential for strategic autonomy and competitiveness.”
Without tax coordination, companies may still face fiscal complexity.
Digital infrastructure disparities could delay adoption.
Some founders may hesitate to adopt a “new legal regime” until proven.
July 30, 2025
