Andrew Petrov is CEO of European fintech company Finom. In this guest article, he discusses the impact of EU Inc.
On January 20, 2026, European Commission President Ursula Von Der Leyen officially announced the EU-INC project, which aims to establish a single form of pan-European company with a single register and standardized rules to facilitate startups and scale-ups. It would establish a 28th regime, distinct from the 27 already in existence, harmonizing operations at the European level and allowing for companies to be created entirely online, in two days or less. If passed, this project would become law and come into effect in 2027.
With its 27 different regimes, Europe greatly complicates any scaling up for its young companies, exposing them to fragmentation that not only limits international financing, foreign expansion, and talent retention, but also undermines European competitiveness in front of China and the US. However, no matter how promising, exciting and even necessary, the EU-INC project doesn’t eliminate all obstacles.
To start with, the EU-INC remains optional and, as a result, different countries will not be obliged to implement it and it will coexist with national business law, leaving entrepreneurs the choice between the pan-European form and the national version. Nevertheless, in the event of a conflict between the EU-INC rules and the company law of a Member State, the European framework would prevail for companies that have opted in.
What EU–INC won’t solve: the financial operations gap
However, although the EU–INC is a great first step, it is only the beginning. Incorporation happens once. The real pain for entrepreneurs shows up in the daily routine – banking, invoicing, taxes, payroll, cross-border payments. That’s where Europe still feels fragmented in practice.
In the operational reality, entrepreneurs and businesses will still have to navigate very complex back offices for ongoing operations. For instance, a German company with French clients and Dutch employees still faces VAT rules in 3 countries, different invoice requirements, separate tax filing deadlines, distinct payroll regulations.
What can be observed, processing operations for 200,000+ businesses across Europe, is that incorporation structure rarely appears as their main administrative burden. Real bureaucratic cost lives in monthly VAT returns, quarterly tax filings, cross-border payment complications, constantly changing local compliance requirements.
A valuable first step, not problem-solving formula
Unified incorporation is valuable, and we support it, but it doesn’t mean unified financial operations as the 28th regime creates a streamlined entity type that still must comply with 27 tax codes, 27 banking regulations, 27 employment law systems.
EU–INC handles the setup phase well, and this is a great initiative. The question is what happens in years 2, 3, and beyond when you’re managing ongoing operations – the devil is in those details. As a fintech provider for European businesses, we see businesses operating across 3-5 European markets juggling separate banking relationships, accounting systems, and compliance calendars.
For example, an average German SME spends roughly 8 hours per week on financial administration (not incorporation paperwork), and we see entrepreneurs managing 2-3 different legal entities simultaneously, each with separate tax and accounting rules. For most SMEs, reducing daily administrative burden means automating compliance tasks, not just simplifying corporate structure.
The Next Challenge: EU needs standardized digital financial infrastructure alongside standardized incorporation
Competitive advantage comes from automation of recurring financial operations, not just faster company registration. Entrepreneurs celebrate getting through incorporation once, then face ongoing administrative burden every month. The bureaucracy that costs entrepreneurs time and money happens after incorporation: monthly bookkeeping, tax compliance, cross-border payments, expense management.
Making young European companies more competitive and enabling them to truly take full advantage of the Single Market requires more than just formal harmonization. To achieve such a result, making daily financial operations across Europe as simple and unified as company formation is becoming should come next.
