Firm size composition accounts for one-third of EU productivity gap
The European Central Bank published an analysis backing the European Commission's proposed EU Inc. corporate framework. The optional 28th regime aims to reduce legal fragmentation across 27 member states and help innovative European startups scale into large enterprises.
The cost of 27 rulebooks
While annual firm birth rates in the European Union match the United States at roughly 10 percent, small firms with under ten workers represent over 20 percent of EU employment, twice the US share.
Large enterprises produce roughly double the value added per worker, and differences in firm size composition account for around one-third of the aggregate EU-US productivity gap.
To overcome cross-border legal barriers, the European Commission proposed the optional EU Inc. framework in March 2026.
The regulation introduces digital setup within 48 hours, a maximum €100 registration fee, zero minimum capital requirements, and standardized financing tools like SAFE and KISS instruments.
Escaping fragmented domestic regimes
European venture capital markets remain fragmented, with non-EU investors leading more than half of late-stage deal value.
Many mature start-ups relocate or incorporate as Delaware entities to access capital and uniform governance; 79 percent of US VC-backed firms and 97 percent of unicorns rely on Delaware law.
The Commission estimates that 300,000 firms could adopt the EU Inc. framework over ten years, yielding administrative savings between €328 million and €440 million.
Necessary plumbing, not a cure
An optional EU corporate regime removes genuine legal friction for young cross-border businesses.
Yet sidestepping tax, labour, and insolvency rules leaves the heaviest structural hurdles intact.
A common corporate label cannot substitute for a fully integrated capital market.