[neximo64]

Can't work legally speaking. There has to be a single sponsoring member state. Just sadly how the EU is designed.

The only way would be to copy it individually so it is the same in each member state which breaks the purpose of it.

[dathinab]

this isn't fully true

yes you company needs to be rooted in a specific country, and sure moving company roots between countries is still not always trivial (anti capital flight laws are a thing). But that isn't really in conflict with a EU INC per-se. I mean they do point out that it will have

> Local taxes & employment

and this isn't in conflict with

- the same business form being available in all EU members

- central EU registry

- Standardized investment documents ( * this is only investment documents, not e.g. tax documents)

- Standardized EU-wide stock options

- For every founder ( * with some limits)

Like there are already some "EU level" business models, e.g. you company can operate as a Societas Europaea (SE). Now a SE is for other use-cases so not really the same at all (it's more like the EU version of a German GmbH), but it shows that things "in that direction" are very much viable.

[vladms]

> - Standardized investment documents

All investments I took part of implied a lot of back and forth on conditions adapted to the specific case, preferences, fears, etc. I have doubts that "standardization" can be reasonable achieved here.

> - Standardized EU-wide stock options

EU does not have attributions on tax, it's the national governments that do (see https://european-union.europa.eu/priorities-and-actions/acti...).

The issue with stock options are that they are taxed, so you will have to consider each country in particular.

Maybe you would like for EU to have tax responsibilities, but I wouldn't jump to that without thinking about the implications. As an example the Euro monetary union without a fiscal union can causes issues already (for some explanations check https://en.wikipedia.org/wiki/Fiscal_union).

[dathinab]

the proposal itself, and my comments, say no tax will be on country basis, that doesn't block standardized stock options. It just means that on monetization events taxes you pay on stocks might differ (they anyway will depending on where you live independent on anything on the company side).

[vladms]

I hope someone talked with lawyers that know what can be done.

I would love a (more) unified system (tax, rules, etc.). Multiple organizations/think-tanks recommended more unified systems for the EU on this topics.

The problem is if it does not fall under the EU competences it will be hard to implement at that level. To quote:

> While the businesses and objectives targeted by the 28th regime are specified to some extent, it is unclear which firms would specifically have access to it, and which aspects of the business code would be covered. The competences of the EU are likely to constitute boundaries in this respect.

source: https://www.europarl.europa.eu/RegData/etudes/BRIE/2025/7792...

In a way, it's like programming. The difficult part are the exceptions, corner cases or unplanned interactions. Countries are very reluctant to give up control over some topics (tax being one of them) and they also have lawyers.

I welcome any help entrepreneurs can receive. But after trying it a couple of times (software stuff, might be a specific case) I personally didn't find the rules for creation/tax were that of a problem, compared to the requirements that in many other instances I felt were imposed to the newly/newlish formed enterprise (ex: want to apply to a project? you have to have existed for 3 years; want that subsidy? you need to show us you are having X partners) to lower the risk for the existing (public and private) organizations.

[pjc50]

> anti capital flight laws are a thing

Hmm - any examples of this applying intra-EU? That feels like a violation of the free movement of banking services.

[dathinab]

> violation of the free movement of banking services

Isn't the same as freely moving the jurisdiction under which a company exist.

It also mostly applies to cash/legal tender but most wealthy peoples wealth is only in small amounts in cash.

Technically relevant laws are also often not classified as "capital flight" laws per-se, but are very close to it.

E.g. in Germany there is a "Wegzugsteuer" (~moving away from Germany Tax), which only applies to "hidden/unrealized reserves". When you leave Germany (~for good, kinda, it's complicated) the tax treats them as if you sold them, i.e. you have to any tax you would have to pay if you had sold them. "Hidden reserves" include stuff like you owning more then 1% of a company, certain investment founds, crypto currency, etc.. So while it's not a capital flight law as it doesn't affect cash (weather digital or physical) it is very similar to it.

(clarifications: yes in EU crypto currency is not a legal tender, i.e. it's treated more like gold. You still can use them to buy things as you can buy things based on an exchange of goods if all involved parties agree to it. Similar for a lot of the things covered by the law it's possible to sell them for very low taxes under the right circumstances, so if you don't move very spontaneously you have a lot of ways to largely reduce this tax.)

[bux93]

Weird. Seems to work for Airbus, Allianz, BASF, E.ON, Fresenius, LVMH Moët Hennessy Louis Vuitton (and its subsidiary Dior), SAP, Schneider Electric, TotalEnergies, Unibail-Rodamco-Westfield and Vonovia.

Of course, that's the existing pan-European SE which is a public company. Needs like a few sentences changed in the existing regulation to extend that to private companies. https://en.wikipedia.org/wiki/Societas_Europaea

[neximo64]

This is very different. In a SE these are incorporated and sponsored by the member state. It is like each country making an equivalent copy of the same thing.

The EU-INC is EU designated without a sponsor, which is not permissible under EU law other than for the EU institutions themselves. This is one of the red lines for the design of the EU legally speaking

[bux93]

An SE is incorporated under EU law, and it has a headoffice registered in a member state - and that registration can be moved to another member state. Like GDPR, the relevant law is an EU "regulation" and not a directive. Directives need to be implemented in local laws, regulations apply directly (local laws may fill in details as long as they don't contradict or restrict the regulation, except of course where the regulation explicitely allows derogation). https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CEL...

What do you mean by "sponsored by the member state"? Can you point to the exact regulation, treaty or directive that imposes this requirement?

[neximo64]

This is the basic Maastricht treaty. You cannot make EU law in France without France creating it not as EU law, but as French law. A SE or EU-INC would have to exist within this construct.

The only exception to a legal entity are the EU entities themselves which are supranational.

This is what most people don't understand with the EU, that there is a very specific process to create law and limitations on what it can do. It isn't like the US and the EU isn't a country. I may appreciate you might be European but even within Europe the detail with it is where it matters.

[bux93]

Article 288 of the Treaty on the Functioning of the European Union "A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States." - for example, GDPR.

But even if this were implemented using a Directive (note: the SE is created in a Regulation, that's the link in my previous comment), this still would not mean that the law or the directive would necessarily need to require a company to be "sponsored" by a specific state - whatever that means. (Again, it would help if you'd define "sponsor" with a specific legal reference.)

And even then, Von der Leyen could have been talking about changing the TFEU treaty itself, which is ambitious but certainly not impossible. But again, I see no reason why this can't be done in a regular fashion, just like the already extant SE Regulation.

[carlosjobim]

And if the authors of the proposal had thought a bit more about their idea, they would have realized that the situation is exactly the same in the USA:

You have to select a state to incorporate in. You can't incorporate "federally". All states have different laws and regulations relating to business. Just like in Europe.

So they're chasing a false idea.

[tiborsaas]

Maybe the task is to make the changes to get this to work legally speaking.

[riffraff]

this proposal exists under the umbrella of the 28th regime[0] idea, as per their FAQ.

Which.. would be a good idea, but I am not holding my breath for it to happen in the next 10 years.

[0] https://en.wikipedia.org/wiki/28th_regime

[dbbk]

They've already said it'll be the 28th state

[causalscience]

If the EU is saying "we'll make it work", replying "can't work because that's how the EU is designed" doesn't seem like an intelligent response.

[neximo64]

Looking at it on vibes is not intelligent either.

The design of the EU is based on a foundation where other than the EU institutions themselves the founding legal entity must sit within a member state. EU law that is one each country must replicate, there is no such way to have EU wide law without each and every member state replicating it entirely. An entity that is supranational cannot exist outside this construct & is a red line of the design of the EU itself.

This is one of the reasons the EU cannot easily raise debt for itself without going through a sponsoring member state.

[causalscience]

> The design of the EU is based on a foundation where other than the EU institutions themselves the founding legal entity must sit within a member state.

You don't get it.

You're arguing it's not possible on the basis of the law. I'm saying the people you make the law are saying they'll make it happen. Get it?