EU–INC – A new pan-European legal entity(eu-inc.org) |
EU–INC – A new pan-European legal entity(eu-inc.org) |
However I would strongly caution against thinking that reducing paperwork to set up your company is somehow going to magically solve any of the fundamental problems with EUs ability to create sector dominating companies. But even if we assumed it would, that just means that the bigger companies now have even more leverage.
The real problem is deeper. It's about how EU is designed and structured. EU was created as a way to harmonize and standardize regulation between member countries to make trade simpler. (Anyone remember the cucumber directive)
However as technology have improved and manufacturing started supporting a much more bespoke and customized world, the union started started looking at other forms of regulation that went deeper, each step: expanded central authority and reduced national discretion
We've seen things like one EU Patent court, GDPR, Cookie Law, AI Act, monetary currency all attempts at improving the efficiency of the single market, in reality, none of that have changed the fact that the EU still have not created a single industry leader since it's inception.
It's simply impossible to create a SpaceX, Tesla, Uber, OpenAI, Nvdia, Airbnb, even X, Linkedin or Facebook in Europe, not because of bureaucracy but because of the following 3 things:
1. EU tries to solve problems politically and centrally that startups are much better at solving locally 2. EU utilizes the extreme caution principle on everything and thus end up creating an extreme risk averse approach to what is allowed and what isn't. In effect startups end up creating businesses that the EU allow, rather than what the market need. 3. It's very hard for anyone let alone a startup to challenge the EU regulative system. Yet anyone of the above mentioned companies have constant battles with regulation and legislation. Even those companies can't really win over the EU regulative system, now try and be a startup trying to challenge som of the regulation, good luck.
Europe have plenty of talent and plenty of problems that the startup world could help solve, but as long as the EU politicians compete with their own startup environment at solving these problems no amount of bureaucratic easing is going allow for the full potential of the European talent base.
Its evident that labor cost and taxes are not excessive in EU by the reality of existence of plenty of businesses in a healthy society.
What doesn't exist in EU is the "tech" business, and the tech doesn't have margins too slim to employ people and pay taxes. On the contrary, the margins are fat. The reason that the tech sector isn't a large one in EU is that its easy to incorporate in USA and access the full EU market from there instead of incorporating in some small EU country and deal with their bureaucracy and internal border limitations. The 28th regime and the EU-INC is to address exactly that.
If the USA-EU relations deteriorate enough, it will also create instant trillion Euros market. Just look at the quarterly reports of US tech giants, they generate EU revenues that are not that behind the US revenues. For Apple thats %60 of the US revenue, or ~110B$ for the last quarter and that's happening despite Apple having a much smaller market share in EU.
A full blown conflict between US-EU will be a huge opportunity to replicate the US tech sector in EU and having an EU-INC will be the necessary facilitator that is currently missing when compared with the landscape in USA.
There is no such thing as slave labor in the tech sector. Some countries offer a lower barrier to entry than others. The EU has a very high barrier to entry when it comes to taxation.
You can believe what you want, but I think every country's goal is to reduce taxation as much as possible for companies and for people. Unfortunately, the current in the EU is to keep raising them and give state more and more monopoly on services.
Usually, high taxes go hand in hand with high quality welfare state. Contrary to popular belief, the vast majority of business ppl are educated and understand the added value of an accessible publicly funded healthcare, pension and education system.
Commonly listed (and perennial business problems) are: unstable political environment (in the sense that tax law changes every four years, complex legal system, so long term planning is impossible), corruption (meaning you have to know who to bribe to get the job done), crime rates and lack of infrastructure.
450 million and counting people would still prefer to live and work in the EU than anywhere else.
Even more so with present geopolitics, to put it politely !
majority of population of any given country doesn't emigrate ever, even inside EU where it would be extremely easy
Besides a fractured market with lots of different bureaucracies to deal with, the lack of at-will employment is a big labor cost when you need to be able to quickly spin up or spin down operations.
Welfare should always be a responsibility of the government, not businesses. Let businesses business and let government redistribute wealth.
Having said that, the lack of proper integration is a huge problem, like imposing tarrifs of over 100% on ourselves.
In the US, this provides the companies with the levers they need to maintain a functioning business in pretty much an instant. In the EU you can't do that.
The only way would be to copy it individually so it is the same in each member state which breaks the purpose of it.
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.
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).
Hmm - any examples of this applying intra-EU? That feels like a violation of the free movement of banking services.
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
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
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.
Which.. would be a good idea, but I am not holding my breath for it to happen in the next 10 years.
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.
Most of the Europeans trust the government more that they trust the businesses and demand some services to be provided by the government and they all collect taxes accordingly. Some countries like Bulgaria have relatively small governments and do %10 flat tax for companies and individuals and other countries like France or Germany provide robust government services and safety net and do much higher taxation.
(see Apple Ireland)
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.)
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?
The US hire-and-fire approach is then the other extreme.
The optimal amount of worker protection is somewhere in-between.
The government should be providing protection, by way of providing education and welfare to support reallocation of labor, and taxing businesses to do it. Requiring each business to do it and then policing them is far less efficient for all parties.
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.
> Dying out, pyramid scheme retirement system mostly.
The solution to this is more creampies 20 years ago, no government action can change that. Every generation pays for the retirement of the previous one and if a generation makes less kids then they put higher burden on those kids. Before the taxes and pensions people used to look after their aging parents, today people who live in cities and pay taxes so that they can have independent lives from their parents. That's how biology works, people born procreate age and die and if you live in a society the young ones take care of the old onces until they die.
What do you mean by "sponsored by the member state"? Can you point to the exact regulation, treaty or directive that imposes this requirement?
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.
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.
Because unlike the US, we don't speak the same language. If there would have been a real push to have a common EU language since its inception, we would have been more mobile and more US like. But no...
The majority of Europeans, and especially those of recent generations speak incredibly good English.
Most Europeans speak 2–3 languages anyway, so there is always a common language to be found. No need for one to be forced on you.
There's a big difference between being a tourist in Europe and actually living here.
That is why english as secondary official language would be beneficial.
Its also factual that there's a large scale migration intra-EU, with people from poorer countries moving to rich ones to seek jobs. Bulgaria, Romania and Poland are prime examples for that.
Its also well documented that those same people stop migrating and even coming back once their counties level up with the rest of the EU, again Poland and Bulgaria are good examples for this in the last years.
EU is trying to make sure that the poorer countries receive the help they need to catch up and it looks like its working.
If you go to the CNN website there are lots of articles on there right now (e.g. https://edition.cnn.com/travel/us-woman-moved-to-germany) about US peeps who have emigrated to Europe recently and are thoroughly enjoying their new life with no plans to return to the motherland in the foreseeable future.
I can't possibly think why. ;)
But honestly, I'm not sure what the problem is. As previously mentioned by other people on this discussion, vast swathes of Eastern Europeans live and work in the West and have had no trouble whatsoever picking up the local language. As they say, the best way to learn a language is by immersion.
Most Europeans will have gone to a school where they typically learnt a minimum of one extra language and often two extra languages.
With the exception of Finnish, the majority of Western European languages are not that difficult. Its not like Chinese or Japanese which are simply impenetrable unless you went to school there or you are super-smart and managed to pick it up in later life through sheer brain power.
Probably in just 3 to 5 years they could open a working group to outline an agenda for a committee which would prepare blueprints of the primary proposals.
In practice ... there is always so much bureaucracy and inertia. I don't think the current EU model works well. I also don't think a copy/paste USA 2.0 works either, yet this seems to be the primary objective by the people in Brussels (that is, = politicians, not all folks in Brussels of course). There is such a huge disconnect between what people such as Leyen babble, and what people want or need or may want. And a lack of decision-making power too. So I think most of those projects will end in failure.
Personally I think an EU model will only work when the agendas are NOT unified, because unification leads to disagreements. You can already see this happening in regards to politics or war - some countries want to, oddly enough, serve Russia. That may be a fine decision for a state, but if other states push for another approach, you have a problem here. Now there are discussions to simply isolate the "non-compliant" states, but this is a bad approach since it will again lead to fragmentation and more people being angry at Brussels here. So this is a failing model. Splitting up things into separate aspects will also, of course, lead to more bureaucracy, but states would more easily form a specific opinion and align towards that, without being handicapped by other states that don't want to go that route. I don't see any other way for this to work. The EU in its present form is just setup for failure - the current model simply does not work, and the proposed new model is even worse in many ways e. g. 2/3 majority basically means that the big states will dominate the small ones. For instance, if Germany and France want to go to war against Russia (let's assume this were the case), then they'd have to send troops to the front - and they are unwilling to do so. So other states are more likely to be threatened. That model not only does not work but is also unfair.
Of course legal or taxation models are different to war, but the different countries have different wealth and opportunities, so a one-size-fits-all also can not possibly work. We saw this with the EURO where weaker countries struggle permanently. The whole EU needs to be completely re-designed - and this is not going to happen due to inertia alone.
Now, that may not work in all jurisdictions for reasons of local taxation etc (and you'll have to work out payroll tax, benefits etc) but that's almost never anything to do with the legal entity type!
Flat out these social differences and you'll have the social support you need to fight and/or collaborate as equal with everyone else. It's very simple.
ps. I'm not saying everybody should stay "put". But ppl shouldn't be migrating within the EU for these reasons. That was the initial goal anyway, then they started celebrating things that no one in the EU cares about as if it's something that matters (i.e. Apple vs EU dispute over the charger...)
Is it? I doubt it. There isn't a large country on earth where the salaries don't differ across regions.
It doesn't even work in a single country for the simple reason that governments have very different ideas how to redistribute taxes. If one country can't do it well, how could the EU?
Didn't think so.
> While both aim to facilitate cross-border operations within the EU, EU-Inc addresses some of the limitations of SE:
> - No minimum capital requirement: Unlike SE, which has a minimum capital requirement of €120,000, EU-Inc has no minimum capital requirement, making it more accessible for startups.
> - Simplified governance structure: EU-Inc offers a more streamlined governance structure compared to SE, reducing administrative burden and promoting flexibility.
> - Digital ecosystem: EU-Inc is supported by a robust online ecosystem, including a digital registry and dashboard, for efficient management and compliance, which is lacking for SE.
I’m based in Denmark and have incorporated multiple companies. It is very easy and digital and costs very little, even if you get a lawyer to do it for you.
Maybe the issue is a few member states that are behind on digitalization?
In my experience EU is better at setting the guidelines and then the member states can implement the details themselves. When they try to push things it becomes bureaucratic - just look at the cookie law and GDPR. Both great ideas but overly complicated.
Austrian company and you want to take investment from a venture fund in X country? It'll get complicated very fast. That's part of what this trying to fix and make simple.
At the same time there are many discrepancies that makes it hard for companies from one country to mesh with companies from another country.
Law tradition (Napoleonic, German or Nordic), tax rules (German rules were (are?) notorious for their complexity,etc. , then there's certain laws such as the Finnish money gathering law that can be a problem for very early stage development ( https://solhsa.com/wishlist.html ).
All the above creates friction, and if EU-inc would follow German rules, I'd rather just stay with a Swedish company because..
Luckily the EU has harmonized things so a startup in one country can mostly work within local rules as long as we make sure to distribute earnings from different countries correctly.
The trickier part is forming bonds, such as for investor and/or startup protection for across-border investments when one wants to grow, various scams over the years has played out differently in various countries so those kinds of laws could be quite an issue outside of the stock market.
Tell him Victoria refer you
The leeches and bureaucrats don't care about actually accomplishing things, about ending corruption, or fixing any of the real world problems experienced by the citizens of the EU. They just want their grift to continue, to feel morally and intellectually superior, and to feel the validation of exercising power over their subjugates. Because they know better, and their education is superior, and if everyone would just listen to the experts, the whole world would just get along and run smoothly.
Everywhere else in the world that allows people to actually do things - and the Europeans that "just do things" in defiance of all the idiots in charge - will own the world in ten years. The EU will be a sad little footnote about the dangers of bureaucratic overreach and pompous elitism.
Dude come on, I know they're not in the EU but like, there it feels like practically the same country if you don't mind the loveable accent and the crazy prices in another currency :)
https://single-market-economy.ec.europa.eu/sectors/proximity...
So 27 individual implementations of this, as opposed to the current 27 different implementations of how to incorporate and assign equity?
Seems… silly?
I’m all for making it more attractive to create startups in the EU… But I don’t think a directive is the right way
It seems somehow untrustworthy this >Our entrepreneurs, the innovative companies, will be able to register a company in any Member State within 48 hours – fully online.
which sounds like not everyone will be allowed to do this? or is it "our" like European is our.
Then 3-5% of the entire money flow goes to private pockets/bankers. Are you f.cking kidding me, an optimal gpd growth is ~3% but we giving it away to some parasite for free? Why, I do not consent nor agree.
This parasites, blood suckers, ignorant puppets, with full power and kart blanch can´t see further then their nose. BUt ofc a parasite kill the host and move elsewhere, so I guess no issues here.
Stop this nonsense throttling damn it, you need to be prosecuted legally for economic murder and sufferance caused because of it.
There are some who talk the talk, but when it comes down to it, the behemoth that is the Brussels (and Strasbourg!) machine will never accept reducing its influence.
Re: Strasbourg, ditching the EU Parliament in Strasbourg completely would a really great first step to indicate that the EU is serious about cutting waste. However, the French have a veto, so it will never happen.
https://www.euronews.com/2019/05/20/eu-parliament-s-114m-a-y...
American startups and businesses get investor money from all over the world, including from Europe. Willingness to invest in startups depends on the downstream of willingness to invest in business in general. If venture capital investors know that there's a lot of money willing to invest after the startup phase, then they are willing to take more risks. And so on for every phase of investors, until you reach big institutional investors like retirement funds.
It looks like the proponents here have fallen into the classic European thinking: "Let's talk and make papers to make our wishes become true". Instead of trying to understand reality and why things are the way they are.
They should ask themselves why any European investor would want to invest in a European startup instead of in an American startup. They should ask themselves why European entrepreneurs should create their startup in Europe instead of in America. When they have the answers to those questions they know what solutions to propose.
My experience doing business in and with America has been nothing but fantastic. They have all the infrastructure and all the culture to help entrepreneurs and anybody who wants to do business. They want to do business as well. Need a credit card processor? Need an LLC? Need a bank account? Need a business loan? It's easy, the USA is fucking open for business.
In Europe it is hostility mostly all the way, from banks to regulators to governments, and so on. The easy part is registering a company, which is just as swift in Europe as it is in the USA. But apart from that you won't find any friends in the process. Even if you're European. Even in the country and the city you were born in.
Americans love new things and new ideas and see them as opportunities. Europeans see them as threats. And that is mirrored everywhere you turn. You might agree with the European perspective in a society-wide perspective, but for startup businesses the American mindset fits much better.
Man, at least read the title of the submission, even if you're not gonna be bothered reading the contents. This is clearly about EU, incorporating in either of those two places would defeat the entire purpose :)
> the legal entity you choose is possibly the least consequential
I think this is a bit of the goal with EU-INC, so people don't have to think about it as much. Right now, if you're multinational, you really have to be careful what country you use as your base. Hopefully, with something like this, in the future, you can also include a "EU-INC" in there, and advice people to just go with the simplest way. I think that's the dream at least.
UK is in Europe.
The amount of founders who choose to domicile their company in Estonia because the ticket rates and ease look attractive and who don't understand that this will still need to be administered in their local market as a CFC (controlled foreign corporation) would probably say differently.
> Just choose a jurisdiction where investors understand how the legals work (Delaware C-corp, UK Ltd is OK too) and there's a finite administrative burden and/or commoditized tooling in place to help you handle it.
That's exactly what EU-INC is trying to provide/solve afaict.
Neither of which is in EU, which is exactly the point. Should be an EU one which is usable...
I have various experience with opening businesses and my impression is that the quality of service is the same as for personal matters, not worse nor better. My complaint (for both personal and as business) is that you stumble upon low qualified people that just do not care. If you know what to ask and how things work, it's mostly ok. If you need to discover by yourself (and nobody helps you) you will have headaches.
> Americans love new things and new ideas and see them as opportunities. Europeans see them as threats.
That's definitely true, and a big frustration for the entrepreneurial type. But, think like an American - see it as an opportunity! Once European are convinced things are not "a threat/evil" they will work more steady with you, for the longer term. I worked at a number of projects with US that changed direction so often that nothing was ever finished - because they always went for the newest idea. Not ideal either.
What if the founders can't get a visa?
The assumption that the world is flat, trade is free, and people can just be anywhere - globalization - may not hold true for much longer.
Ah yes, the "real business" of American startups: losing billions of dollars a year with not even a business plan to turn a profit, in hopes of being acquired by a larger entity.
Regardless, being able to incorporate in UK doesn't help much unless you're in UK yourself, given they're no longer in the EU.
For one, I'm worried about what simple means. Likely something that will not make it as cheap to operate in every EU country, but make it as expensive to do that.
Also, whatever the EU commission/council/whatever they call themselves in order to not call themselves government decides has to be translated into local legislation by all member countries. So it will get twisted in 27 different ways, some of them incompatible. Also 9 of the 27 will take years to finish the process.
I mean, if that's the case, no-one will use that structure.
In general, having a single set of rules makes things cheaper. That is the whole basis of standardisation.
> Also 9 of the 27 will take years to finish the process.
You're thinking of directives. I'd assume this will be a regulation (quick guide to the differences here: https://european-union.europa.eu/institutions-law-budget/law... )
They're trying so hard to not call themselves a government that they renamed everything so it doesn't sound like what a government does. Maybe they should start with fixing that...
For the record i am in the EU and I think the EU is generally a good thing. Doesn't mean the "commisioners/ministers/whatever" couldn't use a few kicks to bring them more down to earth.
I agree it is Eu-wide or pan-EU rather than pan European.
Its probably not going to solve the problems it sets out to given all the differences between EU countries legal systems, tax, regulation etc.
I hope this is an indication that the Commission proposal will be for a Regulation and not a Directive.
I still don't understand why it's been such a contentious decision to pick between the two.
Just heard about this initiative as a European, I don't have an opinion yet.
Same! I'm cautiously optimistic, but need to await the criticism from the Americans before I can fully know what to think about it. I'm sure it'll pop up here any time soon, NYC is just about to wake up.
It's not. However from the speech it sounds like the commission is ready to put forward their proposal soon-ish
After they do so the actual legislative process is going to start where the draft has to go through Parliament and the Council to become law
The legislative process is going to take time which is where the 2027 date in eu-inc.org comes from
I don't know if there will be legal or political issues around this that would delay adoption though
I am absolutely for it. There are too many different types of company structures in the individual EU countries and they don’t work well when you move and come with all sorts of different risks. Obviously many are also just cumbersome to start and dissolve. You could start five US LLCs within ten minutes of filling out some online forms whereas to start one European entity depending on the country you might have to make a notary appointment, register with the national registry and the tax authority. I think there’s a lot of room for improvement which can take days to weeks.
About 2012, it was incredibly difficult to start a limited liability partnership/corporation in the UK, roughly physically-located around Chelsea to Canary Wharf. One of the big hurdles was acquiring specific record-keeping instruments that weren't sold in specialty legal stationery shops, but only by some dude literally selling them out of his boot (trunk in America). Maybe the other partners had outdated information, which was a possibility. Contemporaneously, it was possible to start a Delaware corporation online in the US in under 3 days and for less than $300 USD.
I'd guess the guy operating from his car was an artisan engraver who made the seal for you. They're easy to buy online too (I got one around 25 years ago), but they're mostly a curiosity rather than a necessity. I doubt more than one in a hundred new Ltd or LLP companies will bother with one.
That's what the personal income tax is for.. and all the other taxes payed by the individual.
That way countries can compete in being the best environment for companies.
This way you avoid incredibly huge amounts of taxes.
There is a reason why cfc rules found their way into atad.
From the FAQ https://www.eu-inc.org/faq
Then I suggest they make noise to lower it to €1 - much easier than creating a new legal structure
Then there are ongoing regulations like needing to have a resident director, so if you're a single-director company you can't move your personal residence even to another European country without shutting down your business and re-establishing it in your new country.
Running it also changes from country to country, so if you move you have to speak to new accounts and lawyers in your new country about how tax and vat and other legalities work.
In theory, this would let you do all of that once, hopefully all online and in a simpler and faster way. Then it should also be easier to hire and sell to all EU countries without doing a complicated dance of employment regulations and VAT compliance.
That would be ideal anyway. Not sure if or when we'll get there.
Completely and totally defeats the purpose.
We also need a paneuropean banking & tax system and ideally some paneuropean telephony (plus voip) and internet providers.
long: It depends.
If you are a foreigner, e.g. no US resident, you are fully taxable with your US LLC profits in your country of residence, e.g. let's say Germany. There is no way to get a tax discount or any other simple magic hack. However, if your lifestyle allows, to become a digital nomad (not living in a single country for more than 183 days) in theory you may operate tax-free (only sales outside of US, domestic US sales are taxable). The big benefit of a US LCC in this case is, that it's 100% trustworthy limited liability company that does not automatically enforce taxation residency for you individually and can be operated from anywhere in the world. No UAE, no Caribbean islands shell companies needed, that ring all bells and will keep business away.
Local taxes & employment
I guess there is hardly any incentive to open a company in, say, Sweden vs Ireland then?
I haven't looked too deeply into it, but my understanding is that it's not possible to create an equivalent corporation in Italy (where I reside) nor the rest of Europe.
I would love to be proven wrong though.
You certainly did not look deep enough. ;)
Ask Mr Google about gGmbH in Germany, for example.
Honestly, I would be incredibly surprised if every single European country does not already have a non-profit structure.
In addition, do not forget that in some countries you might also have the option of being non-profit not through legal-form (e.g. gGmbH in Germany) but via your articles of association, i.e. you set up a "standard" company and then formally declare it a non-profit. This is something your friendly local company lawyer would be need to help with as it requires the correct words to be drafted into your articles if you want e.g. the tax authorities to correctly recognise your status.
US tech companies won not because EU is diverse, but because they had access to more money and could undermine all competition by dumping prices.
Even before Google, there was Microsoft and it's tacit acceptance of "piracy".
I feel like it's important to specify "diversity" and not just use it as a catch-all. I don't believe the strength of the EU is in diversity of how companies are implemented and run across the union, it's the diversity of culture, mindset and people that is the strength, and that can be represented inside companies, even if the way of setting up, running and investing in companies would be the same across the union.
That's how we will build a truly resilient system.
Don't forget that the most efficient state was the Third Reich, closely followed by the Soviet Union.
Already being discussed: https://news.ycombinator.com/item?id=46703877
I too tried to submit eu-inc.org yesterday I think, but was then redirected to https://news.ycombinator.com/item?id=46696097
Seems someone else might have the same workflow, and the de-dup detector let it through for whatever reason.
Having a EU based one will be great.
Also to move forward maybe it is time to stop using words like "innovation", "ecosystem" and "startups" all over because they seem to have lost their meaning over time.
Most of Europe have been screaming those buzzwords, invested a lot of money and tinkered its bureaucracy to enable them for at least 25 years. With obviously very little results.
So maybe it is time to think out of the box.
Maybe the real "ecosystem" includes the people cleaning the toilets, the farmers growing potatoes and the electricians. Those people are even more crushed by the bureaucracy. Maybe lifting up everybody is the way forward.
I would welcome any reform that does not target a specific type of actor (like "startups"), need to be plugged in to the latest tax shelter or need for a lawyer.
- [0] https://xkcd.com/927/
What's really difficult is setting up a compnay and opening a bank account in the company's name from abroad.
That said I think the headline proposal (single entity type and single registrar) is not important. The UK and (AFAIK) the US have few practical difficulties with multiple registrars and variations between jurisdictions.
As the old saying goes ... what has that got to do with the price of eggs ?
A non-profit is a non-profit, doesn't matter if you are supporting Open Source or the community homeless.
Same goes for donors. A donation is a donation.
Codeberg e.v. (a.k.a. Forgejo) is one example that comes to mind, but I'm sure there are many others.
I made the mistake of leaving this unsaid, but 501c3 in the US also means that the company is tax exempt, which is the actual concrete thing I was implicitly asking about.
I think in the majority of European cases you don't need prior approval. The UK is most likely the biggest exception where you can become either a non-profit or a charity. And if you want to become a charity in the UK, then yes there are more hoops to jump thorugh including approval from Charity Commission.
But for Germany for example, you can just go setup a gGmbH which is simply a non-profit/charitable form of the standard GmbH. The only difference is what you put in your articles of association and how you register with the tax authorities, but you don't need prior authorisation for either, you just apply for the status with the tax authorities post-formation.
Whether non-profit or charity you get tax exemption on both in Europe. The only difference is in the donor experience in some places (e.g. in the UK to get a personal tax break you have to donate to a charity, not a non-profit).
But as above, I think the UK is the exception to the rule, I suspect in most EU countries it is closer to being non-profit == charity with no differentiation.
Let's say a small side hustle earns me $200/month. The money is kept on the LLC's bank account. Later on, when I visit the US, the LLC is paying for traveling and hotel. Would I still need to pay taxes in my country of residence?
(Even though you probably aren't a lawyer, I'd still appreciate your thoughts on this).
So if your LLC collects $200/months and pays $100 for operations, you need to provide both positions to the German tax authorities, not just the $100 pro-forma profit.
They treat the LLC as "shell company" unless you have an office and can document that the business decisions are made there (because you are there a decent amount of time or have a hired manager and you just a shareholder).
US authorities have to report to the German authorities that you own an LLC, not the fiscal details, but the business facts.
If you are successful in your business, and your LLC is really making money, you can reduce your taxation duties in your current home country if you move abroad for half a year. If you don't stay longer than 182 days in one country, you are not taxable (except US citizens). This is also true if you move within the EU every couple of months. Of course this is not easy and comes with a lot of expenses and mental load (you MUST leave a country or you will have to tax everything their AND you have to document your stays carefully).
The LLC works great if you do that. The German GmbH does not. Hence starting an LLC can make sense if you plan to start this nomadic lifestyle. Owning a property (home) causes tax residency in Germany, so this is another story to take care of, if you are lucky enough to own something.
And by "it" we mean both "free choice to be part of the union or not" and "legal jurisdictions".
Much like "an American firm" doesn't mean Canadian or Brazilian.
See comment above:
> Its obviously EU
I know how continents work. I don't think you know when contextual usages of language work.
One might have said the use of the word "American" was misuse engineered by US Americans, to make themselves the "main" America. But for many reasons I think the context is very different in Europe, especially since the obvious grab by EU institutions hasn't really worked among Europeans, even EU Europeans.
EDIT: Further to that "Pan-American" is well understood to not just mean the USA, so "Pan-European" cannot possibly mean the EU only except by very poor wording choices or a very political agenda.
I don't "live in that context", I'm aware of it can can use it when appropriate.
I think that EU-Inc _could_ be an improvement, but it needs to avoid the committee laundry list of ideas/requirements/form fields that plagues the EU startup ecosystem. My worry is that the end result will require notarized declarations of honour, financial plans stretching decades into the future, 30 page business plan documents, reams of corporate governance documents, and tons of other nonsense to protect against the perceived risk that someone who failed at starting a business once fails a second time.
There needs to be UX requirements on the process from day one against which the end result is judged. (E.g. "a company should be able to register in x days", "a complete application should be no longer than y pages", "application costs should be less than z euros").
Which EU bureaucrats will fully pass by treating this as "a company should be able to register in x days once the full set of documents has been collected".
For example to make sure that a company can be held responsible when it breaks the law.
There are already enough loopholes to disconnect legal responsibility from profit-taking, and not every company is benign.
Sure, if the documents cannot be acquired in X days for other reasons, that would undermine the tagline.
But I don't think that's the main risk.
Let's not forget that some requirements make sense.
In Germany, the government recently decided that some minor applications to local governments must be answered within X days or else are automatically approved.
But "minor" is important here... great for a small business that applies for a permit to renovate there outdoor seatings or whatever.
I wouldn't want for company foundings to be auto-approved without submitting the legally required documents.
In many EU countries, you still have to pay social security and/or health insurance, even if your company brings in no revenue. This isn't supposed to be a problem, as you're not really supposed to officially start a business unless you cross specific revenue thresholds. However, that doesn't work in practice if you're offering your services online, as many payment gateways in Europe will not deal with non-business accounts.
Its also a chicken and egg problem. Having a revenue means having a company and vice versa. Unless you're in very old fields, which explains lack of new tech companies in Germany
It should be left to each EU country to decide how to manage their company compliance processes. Those companies can then easily trade all over the EU.
You can easily set up a company in Ireland.
The EU does not to over reach with one-size-fits-all regulations. That will eventually lead to it's dissolution. It needs to concentrate on maintaining a free trade area.
Yes you can form a company in Ireland while living in France. But you cannot get an Irish VAT number without a physical presence in Ireland.
And if – for example – France learns that you are running an Irish company from France (i.e. you have a 'permanent establishment' in France), they'll want you to file and pay French corporation tax. Which is likely sufficiently annoying that you may as well have formed a French company in the first place.
Yes it will.
The vast army of bureaucrats in any country does whatever is in their power to make sure their specific requirements are included into the process. What do you mean they would like to open a 3D printing workshop with no Environmental Impact Study done?!
Each time the Commission comes with a new rule, most countries agree with it. And if its an "unpopular", the game for each gov is to blame the EU.
In my experience this is at least as important. Everyone focuses on the process of creating companies, which is now relatively streamlined in many European countries.
The real, massive difference between the US and EU is how hard it is to shutdown a company and the legal implications of that. I was shocked at how unreasonably slow and painful it can be to shutdown a company in Europe the first time I did it. Many countries effectively treat it as a criminal proceeding. Sometimes startups just fail, that is the nature of startups.
In the US shutting down a company is almost as easy as creating one.
And yes, there are other way bigger issues in my opinion, such as financing and even social support.
I think you're the first person I've ever seen in my life saying "I moved my company from the US to the EU and now my business owner life is so much easier"...
Not really, there are services like Avalara that give you the exact tax amount you need to collect from your customers once they fill in the shipping address.
Not really there are literally companies as a service that take care of everything for next to nothing. It's actually kinda crazy how you can be up and running in under a week in the USA.
In EU you will need to deal with VAT basically from day one (10k EUR of revenue). In US you will not deal with it until you can afford it as thresholds are very generous.
You can't even say they manage to regulate actual problems; they only reinforce the big players. The cookie consent banner nonsense and ongoing legal fight with Apple (and GAFAM in general) didn't bring anything of value to end consumers.
Cookies haven't disappeared; they have just become a major annoyance that you have to spend a lot of time clicking on and tracking hasn't been reduced, quite the contrary. The iPhone is still a locked-down device, with Apple maintaining a monopoly on software access as well as repairability (their repair program is such a joke that they should be tried for contempt if the EU actually had any power).
Bureaucracy is just cancer, and the EU is fully metastasized; there is not much that can improve until a major failure happens.
If you want to create a business, you have to pay the bureaucracy before you even make a single cent. Business has become more profitable to the government than the actual business owners; those thriving are the big ones who can afford to play the lobbying game and engage in regulatory capture and offload most of the cost on the taxpayers while profiting overseas.
It was announced you will be able to create company fully online and will have it ready in max 48h.
I then moved to Portugal and started not one but two companies there. The whole process is so clearly setup to discourage people from actually forming companies. Everything from the attitude of all involved ("are you sure?!"), to the practical bureaucracy and costs involved.
I thought perhaps Portugal was just an outlier. But then I moved to Germany. And just wow. Definitely worse. Rounds of paperwork, notary offices, and fees. A process taking weeks. And for a GmbH a minimum investment of €25k. Sure you can form a UG. company for €1, but that effectively just announces "don't trust us, we're tiny" (IMHO).
It is something that really saddens and frustrates me with the EU.
Edit: And sure, you can form an Estonian company. But then you have to try and fly under the radar with regards to the 'permanent establishment' rules.
It depends on what you’re trying to achieve. If you want to do some tax optimization shenanigans, then yeah, don’t think it’ll work for you (if you’re in the EU, at least). But if you just want to set up a small to mid-sized company without dealing with German bureaucracy, I think Estonia is your best bet right now. I don’t think (IANAL) you would get into trouble for having a permanent establishment – you’ll just have to still deal with the DE tax office. But if EU-INC really can unify the processes for all countries, I’m all for it!
> The whole process is so clearly setup to discourage people from actually forming companies.
By the way, it’s really backwards in Estonia. I’ve seen zero sole proprietors when I was living there – everybody just opens an LLC.
I'm not sure how any one these is going to change.
It's not a bug it's a feature. We don't want an American-style society. Current developments should be enough reason to understand why (and the understanding that Trump's backers are part of a huge group of people on the low side of the wealth gap). If anything we have too much of that already hence the rise of extreme right here too. It's a result of the austerity movements after the 2007 crash.
But this new regulation doesn't invalidate employee rights no. It's just about registration and incorporation.
The monkey’s finger curls. All contract text is now sized at 2 points.
This is really down to individual countries' red tape and suspicion.
The risk element is also not at all attached to forming a company (hence why it can be so simple and quick), it is with funding and finance. So banks will want to see a business plan but the company registration office does not, or should not, care.
In Switzerland you don't even need to collect VAT until you make at least 100k a year so I find requiring some capital ok.
Forcing certain minimum amounts is just arbitrary gatekeeping and prevents companies that don't need that 'trust' and don't have the money from being created.
That sounds like a really good use for AI.
No, it is not a really good use for a word prediction engine.
Go Estonia!
but UK sucks with reporting requirements - now they even require IDs for directors
if EU-inc can have incorporation costs of less than 30£ - then no reporting requirements if say revenue is under 200k then yeah its a win and no other BS like notaries etc
Totally.
One of the biggest and most horrific aspect of it is the KYC/AML. We regularly read articles explaining that drugs are so out of hand that several EU countries, like Belgium, are becoming narco-states: these are front page, major newspaper, stories. We also read articles explaining that cash bills from petty drug dealing are "necessary for the underground economy of the poor oppressed people".
Official numbers say 2% to 5% of the world's global GDP is tied to criminal activities.
So major drug trafficking is ongoing and that money is definitely being laundered.
Yet when regular people like myself want to open a company, the gates of the KYC/AML hell do open.
Bureaucrats and many people at various institutions like banks, notary, etc. do believe that the KYC/AML meant to catch actual criminals is actually a greenlight to go full stasi-mode on everyone.
Things go, literally, a bit like this:
stasi agent: "Source of funds: where do the 50 K EUR of capital come from?"
honest person: "I sold at 600 EUR shares of Meta I bought at 60 EUR in 2015 (making that up), here's a printed copy of both the buy order at the bank in 2015 and the copy of the sell order, at the same bank, 10 years later."
stasi agent: "Nice try! Where did the 5 K EUR you bought those Meta shares with in 2015 come from?".
The above is, literally, happening. It happened to me. It happened to people I know.
At one point I had no trace because I had to go so much back in time that the bank wouldn't give the proofs anymore: and it cost something insane like 25 EUR / month per account to get old infos. So for say four accounts we're talking 1 200 EUR per year to ask for old bank statements.
I'll remind everyone that a principle in many EU countries is that if there is no suspicion of fraud there's a delay after which the IRSes cannot legally go back. They have to prove that there's potential fraud to be able to go back more than, e.g., 7 years.
But the stasi-agents working in KYC/AML at banks, notary, etc.? They believe they have a mission to make regular's people life hell.
Oh and a good one: you think it's bad that legitimate citizens to denounce illegals? You wanna me to tell you about the phone numbers the governments put in place in many EU countries so that citizens can denounce other fellow citizens "because they believe they're frauding the IRS"? How's that one? Where's the outrage?
In my native country of Belgium I heard that at least one in every four solo-preneur ("independant") / entrepreneur has been the subject of at least one such denunciation.
Stasi.
Also totally counter-productive: when everybody is a suspect, nobody is.
I see on LinkedIn people whoring their profiles to would be employers by boasting about how many SARs denunciations they made (Suspicious Activity Reports).
Stasi agents.
And then don't get me started on people who are just bitter and sour because, in the EU, they may be net 3 K to 5 K EUR a month, and yet are authorized to KYC / AML on people owning Porsche and Ferrari, hundreds of thousands or millions of EUR worth of equities/investements, expensive real estate, etc.
These people cannot comprehend, in their own little minds, surrounded by people limited the same way they are, that there are people out there who are just legitimately more succesful than they'll ever be in life.
Their bitterness and jealousy turns them into little stati agents.
Bank menaced to not only not open my company's account but to close not just my account but also my wife's account. I had then to spend three weeks, full time, while my wife was on vacation (I sent her on vacation and stayed to produce the papers for the stasi), to produce a 49 pages (49 fucking pages) document full of proofs going back more than 10 years. Only to create a company and bring 50 K EUR in capital.
Just fuck this entire system.
You simply cannot hate bureaucracy enough.
> It's even difficult and expensive to _stop_ an LLC and dissolve it.
It's some countries it's near mission impossible. A friend of mine who had the equivalent of a LLC in Belgium who was then acquired by an US company spent 10 years to close the belgian entity. And it's much worse than that: while they refuse to do what's necessary to close it, many taxes are due and keep on coming each year. But of course those did manage to close a company or who know someone who closed a company are going to say: "I had no issue, so there's no issue".
All of this really does feel like a dystopian bureaucratic nightmare, in the style of the Brazil movie. It'd be nice if more movies were produced in that genre for it's badly needed to at least be able to vent off with some well-deserved satire.
The reason this "28th regime" actually works—and bypasses the previous vetos — is that it’s optional. It doesn’t try to force Germany to change its local GmbH laws or kill the notary system overnight. Instead, it creates a parallel, voluntary path. Berlin doesn't have to give up its red tape for local shops, but they have to let a "Unified European Company" exist alongside them.
If we let national pride or local bureaucracy stop this again, we are essentially telling our best founders to leave for the US. Let’s stop protecting red tape and start protecting our future.
The whole process including banks accounts etc... can apparently take months in total.
Personally I would not create "EU-INC" but just make all local entities legal in every country. Then countries could compete to be the best system to attract companies and entrepreneurs.
You'd be surprised at some of the weird things that can happen in the current systems in the EU if you try to do business across borders.
Like: your company suddenly automatically becoming deregistered, or you might get a sudden huge tax bill, or you might even inadvertently get charged with fraud.
Hasn't happened so far knock on wood, but it's a lot more work to stay on the light side than you'd really like.
This is all because the national systems still sort of assume that you'll live and work and stay inside one EU country. You end up constantly fitting square administrative pegs into regulatory round holes.
A lot of the EU's promise is actually theoretical without a proper pan european legal entity.
Yeah, I feel a bit the same way.
Just to make it clear to random passerby's, this is exactly what the proposed EU-INC is for, to create this "pan european legal entity", in case it wasn't clear from the context. I initially asked myself "But that's exactly what it is..." so maybe others end up thinking the same :)
And here I am picturing what could look like the new European far right and far left...
It’s more because taxes and the judiciary are bound to countries.
Unless there are permanent-establishment issues, withholding taxes, or other country-specific digital tax regimes, where your users are based shouldn't affect how/what taxes you pay.
Otherwise, if you don't have any employees or presence in other EU countries and only doing digital services B2C, you shouldn't have to do anything specific about the taxes you pay.
In the ToS it states: >These Terms are governed by the laws of the State of California
> Imprint: eu-inc.org, Factory Lisbon, Av. Infante Dom Henrique 143, 1950-406 Lisboa, Portugal
> Which brings me to the second focus – investment and capital. We are now building the Savings and Investment Union. We need a large-scale, deep and liquid capital market that attracts a wide range of investors. This will allow businesses to find the funding they need – including equity – at lower cost here in Europe. We have made proposals on market integration and supervision to ensure our financial market is more integrated. This covers trading, post-trading, and asset management – as well as driving innovation and making our supervisory framework more efficient. This will help ensure that capital flows where it is needed – to scaleups, to SMEs, to innovation, to industry.
> Third priority: building an interconnected and affordable energy market – a true energy union. Energy is a chokepoint – for both companies and households. Just look at the dispersion of prices across European electricity hubs. Europe needs an energy blueprint that pulls together all the parts. This is our Affordable Energy Action Plan. For example, we are investing massively in our energy security and independence, with interconnectors and grids – this is for the homegrown energies that we are trying to promote as much as possible, nuclear and renewables. To bring down prices and cut dependencies. To put an end to price volatility, manipulation and supply shock. But we now need to speed up this transition. Because homegrown, reliable, resilient and cheaper energy will drive our economic growth, deliver for Europeans and secure our independence.
But hopefully we can move towards that - standardised taxation (especially VAT and corporation tax would help massively here), the abolition of notaries, standardised requirements for document certification, and EU-wide digital ID so no need to fly in and sign in person.
Singling out Deel because you brought it up (and I ragequit after reading their "deel" and consulting it with a local lawyer), but I have the exact same story for every employer of record I've been involved with here in EU, and I don't know a single person who's been happy with them either (again, all employees/contractors).
I understand that it's comfortable and convenient for the employer (presumably, or at least the perspective of outsourcing this and reducing liability outweighs everything else), but these companies absolutely do not know what they're doing wrt local laws.
As I said, anecdotal, and a few years old.
But here is a problem: If your clients are in Croatia and you have a Croatian company, you don’t have to charge VAT if you earn under 60k per year. But if your company is in Estonia, you are required to charge VAT even if you earn under 60k.
Is this not simply because companies in Estonia enter VAT at 40k per year (rather than 60k)?
(and IIRC Croatia was also at 40k a year ago, now is at 60k with some politicians trying to raise the entry to 100k)
-force banks to respect EU free trade union and stop them from discriminating EU citizens and companies who are not citizens
-stop abuse when it comes to currency conversion rates
-raise VAT-free threshold to something that doesn't catch very small companies, 200k EUR in sales to EU would be a good start (currently it's 10k)
-force EU countries to move all the bureaucracy online; it's very realistic, Poland has done it (it's not 100% yet but close to it)
-enforce English as 2nd official language for business related paperwork
Instead I am pretty sure we will get more paperwork, requirements and way for bureaucrats to prolong every process and request more documents on the way.
https://ec.europa.eu/commission/presscorner/detail/da/speech... https://tech.eu/2026/01/20/the-european-commission-launches-...
Also, about reducing it down to "an Ad for unofficial merch", isn't this literally the grassroot movement that led to what was announced today? Or am I getting the relationship wrong? The domain in question was registered 2024-10-09.
It's even linked on the website of the organizers behind it https://klinger.io and https://www.linkedin.com/company/eu-inc/about/
Even now with cross-border selling, there are 27 different VAT codes to follow when transacting within Europe. Sure, you can report and actually settle it to a single national authority (and then that national process separately).
Unless a country will actually defer parts of its company and tax law to Brussels, for companies present in that country - then I just don't really see what this brings over just starting a limited company in another state (even outside of the EU) - as you'll still have to follow national law in the country where you're resident anyway, which could be anything.
(e.g. I start an Estonian OU with E residency, I live in Finland. I am obliged under Finnish law to submit a return for that company in Finland too as a person of control. In Finnish, along with the Estonian return, in Estonian)
I’m hoping they can be creative and find a way to distribute revenues to member states in a way that works for everyone.
For employment taxes, one way could be to tax EU-inc employees as if self-employed in their personal tax domicile.
It should be equally simple to shut down a small company, once all its dues are paid.
Once a company grows larger (say, past 15 full-time employees, or past €10M in revenue), maybe something additional might be asked, because now the company would be able to afford handling it.
And, of course, sensitive things like selling food or medicines would require extra licensing, but it's not that the lack of bakeries or pharmacies what's holding back the tech industry progress in the EU.
How would this organization address that fundamental psychological block?
We paid 3K on a 50K plot of land for some dingus to read a contract out loud.
I think it's just human nature, tbh.
As someone who lives in EU, been skeptical of it for most my life, but for the last 3-4 years kind of turned around on the idea of a stronger EU and more independent Europe, I'm really glad to see and hear that things are swiftly moving ahead. Things like this may seem relatively small, especially with everything going around, but these sort of partnerships and agreements really do have a large impact on the next decades, and I hope we'll see more of this. Fair trade is something we've taken for granted, but we've again learned that it's something you have to fight for, and I'm happy to live in the EU who seem to still realize it's important.
[0] - https://www.reuters.com/world/eu-lawmakers-vote-whether-laun...
> A group of 144 lawmakers put forward a parliamentary motion to ask the EU Court of Justice to rule on whether the agreement can be applied before full ratification by all member states and whether its provisions restrict the EU's ability to set environmental and consumer health policies. The court typically takes around two years to deliver such opinions.
Hopefully the court will take a look around what's going on the world, and get a little bit of push to act a bit faster, although hopefully not compromising on "environmental and consumer health policies", that'd be a blunder of it's own.
The second point is dubious. A central registry may be better or worse than the best national registry.
The third and fourth are what is usually called the Capital Markets Union in eurobubble speak: https://en.wikipedia.org/wiki/Capital_Markets_Union
The Draghi report had some specific proposals which are rather realistic:
> Reduce capital market fragmentation > > A. Introduce a European Security Exchange Commission > > B. Reduce regulatory fragmentation to deepen the CMU > > C. Encourage retail investors through the offer of second pillar pension schemes where the successful examples of some EU Member States can be replicated. > > D. Assess whether further changes to the capital requirements under Solvency II are warranted by further reducing the capital charges on equity investments held for the long term.
https://commission.europa.eu/document/download/97e481fd-2dc3...
https://commission.europa.eu/document/download/ec1409c1-d4b4... (p. 292)
SEs are public companies, and must have at least €120k in capital during formation.
The proposed EU Inc. will be for private companies with no capital requirements.
The capital requirements can be changed.
Doing the insufferable, thankless work of mitigating the commercial choke-points of bureaucracy on a Continental scale makes this effort's failure a forgone conclusion. I would take the attempt more seriously if the individuals tried to make their own country more commerce-friendly, rather than all of Europe.
Even so, points for trying something- anything- and raising "awareness".
It reveals too much that this is actually done by amateurs. Heck, even the most basic business courses I took at a European uni show that this is NOT how you want to attract potential customers or investors.
TBH I doubt it's going to be possible with current status. Where will an EU-inc be based, Luxembourg? and how would that be different from any other Lux company.
But maybe we could at least have some business standards that will be enforced all over the EU. It says "Local taxes & employment" , which also means local laws, which means 27 laws for every little thing. I thought they were going to address that
I hope this succeeds and also hopefully allows easy creation of EU company from outside EU as well.
Atleast personally I am interested in creating a EU company which holds Indian company instead of vice versa because as I said on other comments, I think I deeply align with EU privacy laws & usually most of EU in general.
Currently someone messaged on my other comment and the best way which is estonia would cost me around 1500 euros or more which is just a no go for me personally right now.
I have only read it from top of the page but if I may ask, can someone tell if does this benefit my use case?
[1] https://www.e-resident.gov.ee/ [2] https://www.gov.uk/government/organisations/companies-house
What is revolutionary (in context of EU of course) is easier business operation across different countries, a real bottleneck for EU SMEs.
Is it actually a "real bottleneck" for EU SMEs? Granted, I've only participated in help growing 3 companies from the scale of 3-4 developers > ~100-150 and from national sales to international, but "going worldwide" or "EU wide" was never the bottleneck we had. The most tricky part was figuring out exactly how to do VAT for every single country, but after a session with a accountant + setting up the guidelines + creating a .csv, that's basically it. Besides that, it was basically smooth sailing.
Today I'm sure there even are hosted services that does all of that stuff automatically for you, probably with Stripe integration as well.
What exactly is that bottleneck you're referring to?
Better than potentially putting risk and costs on other companies, the country and/or it's citizens.
> nonsense to protect against the perceived risk
It's not a perceived risk. No rule is made without cases.
I can generally reverse engineer from the UK Companies Act what the cases were, but many EU countries have much more onerous requirements for what seems like no good reason? Perhaps the cases were too long in the past and things work differently now? What risks are we talking about, anyway?
It is true, but lets face it - it is just a high-level proposal. Better than previous ones for sure, but still just a proposal.
And there is a massive gap between the PR and the legal reality. Germany and Austria already torpedoed the previous attempt (the SUP) specifically because it allowed online formation without a notary.
So I would advise against certainty in that the fight is over. I also don't want to wait another 10 years. Honestly by that time just setup topco in UK and if series A will come just do the flip later if you don't want to go to SV straight away.
SPEs were supposed to follow on from SEs (public companies, introduced in 2004) and SCEs (cooperative societies, introduced in 2006).
You are right that this threatens the status quo, though. If this works, founders based in Germany will likely abandon the GmbH. That will require swallowing some national pride and admitting that the current system is simply a less efficient, less competitive legal form for high-growth companies.
One thing I think is also worth mentioning are labor rights. I am not arguing against the German model of employee protection. Mitbestimmung could be viewed as a good thing, even if it will mean less power to the VC and / or founders. And frankly, I don't care if the consensus forces strict, German-style Mitbestimmung on the EU-Inc. Stricter form of EU-INC is still vastly better than nothing at all.
Asianometry has a great video on the labor rights in germany btw - https://www.youtube.com/watch?v=K0teMtLT9XI).
Please elaborate. You're complaining that DE tax funds go to the EU? Very curious what you're talking about and your rational.
Mercosur anyone?
If you could solve all those problems and still had to go listen to the Notar recite the contract in a monotone, it would be a worth trade.
We Dutch are proud how easy it is to do business here. Maybe, compared to some other countries. But starting a BV here and 1 month later finding a representative of a trade union (metal sector, which somehow semiconductors fall under together with car garages, petrol stations, steel factories..) and asking me to come to their office in person to explain what we do, and calculate how much their cut will be was weird at first. Of course being extremely busy with actual business, I forgot, and got a letter with an 100k Euros invoice attached. Apparently they assumed 15 employees with 45k gross salary, and thought this is a fair trade union contribution! When I didn't respond to that, while discussing it with our lawyers, they sent a fine over this invoice which made it 140k. This is all within 3-4 months of registering mind you! At the end the lawyers handled that, but yeah, what the hell..
Firma.de estimates 6 weeks https://www.firma.de/en/company-formation/how-to-set-up-a-gm...
beglaubigt.de estimates 3 weeks https://beglaubigt.de/ug-gruenden
Holvi estimates 4 weeks https://blog.holvi.com/de/gmbh-oder-ug-gr%C3%BCnden-2025-abl...
I did this as a subsidiary for a US company and literally had to email and call people every few days to move the process along (mostly, it was the banks who somehow expected us to be a multi-national company and wanted to charge an arm and a leg just to let us open a bank account. Most banks outright refused us).
When the notary finally filed the paperwork to the court, the court replied after a few weeks with additional clarifications for which we had to go AGAIN to the notary to do the whole song and dance of them chanting at us in German at 1000 words per minute.
Everything took painfully long and delayed investment for while. People have absolutely no idea how painful it is to merely have the incorporated entity available. Then, it takes a few weeks to get your tax ID - this is when you can start employing people / accepting payments etc.
I did it in ~2 weeks last year, where almost a week was caused by the coworking space I rent at not notifying me of the physical mail from the court. If that physical mail would be eliminated from the process you could probably do it in 2 days.
Apart from that, for any non-trivial situation, the majority of the time will be determined by how fast you can proceed through the process of adjusting your bylaws, etc. and evaluating tax situation (so lawyer + tax advisor waiting time).
(after that the process of waiting for a tax ID starts, which depending on where you live can easily be the slowest part and take ~6 weeks on its own.)
I guess, you've never bought a house in the Netherlands then, because it's the same exact process
They just confirmed I was buying a house for X.
They did not read the whole thing.
That’s basically already the case. You can incorporate in one member state and offer your services in another member state. That’s part of what the EU assures. Still, there are many reasons why it doesn’t make sense for people to incorporate in any random member state.
There is European legislation since 2024 that allows 'digital' notaries (Directive 2019/1151). Not many notaries support it though.
And once identified for something you can easily authorise the notary to sign other things on your behalf as well.
We did that all the time when for example adding new entities to a group structure. Just e-sign the authorisation and that's all.
I've recently managed to get everything done in <1 week, including bank account.
Progress!
Like the current downward spiral of US states competing who can have the lowest corporate tax while letting their infrastructure crumble? But hey, that's a long term thing and we don't think about those. Only which companies move to my state in the next year/quarter/month.
People outside of Germany really have no idea how sclerotic the state is. Mean while Germans suffer from the brain damage of having lived there their whole lives and don't see a problem with this.
If you think brain damage is too strong a word, the last time I brought it up a bunch of Germans came out of the wood work to defend an 8 week process as completely reasonable. Then when told I could do the same thing in Australia in 15 minutes they insinuated I was probably a criminal for wanting less paper work to open a business there.
Hahaha, good one, little padavan...
This isn't true in Spain - all company creation requires a notary, among other awkward steps (although as of relatively recently in some cases you can now do this over videoconference, without physically visiting at least). It's not as bad as what I hear of in Germany, but it's non-trivial and slow, and the banking setup process is similarly annoying and slower than it should be.
You can register as autonomo (an individual freelancer) easily with just a couple of forms, but that is not the same thing as creating a separate legal business entity (SL).
Frankly, I understand how one can be annoyed at certain requirements but how do people imagine it without those? I can totally accept temporary annoyances since ultimately all of it serves to protect me from harm as a customer. I really don’t want to deal with companies whose founders already find the quite straightforward registration procedure too difficult.
The claim by others in this thread that you have to wait for the registration entry is false, your company is created the moment you pass notarization. While it makes proof of existence easier to be in the database, you can act and get bank accounts etc with those documents already. And I doubt the stability of your business idea if you cannot even wait a bit.
https://www.bnotk.de/en/tasks-and-activities/magazines/bnotk...
To be fair, I think the problem operating in Germany is its federated nature. And so you have similar issues to companies operating in other federated jurisdictions e.g. US.
If you look at the UK (through pre-Brexit eyes, of course) or Ireland, establishing and operating companies is significantly easier.
Any changes you need to make, adding more capital, change address, requires again, paperwork, tons of hours and again the notary.
Taxes are also quite difficult to figure out, I'm not German born, and my German is good for conversation, but to read and understand the tax has been a problem and I had to rely on very expensive tax consultants. (I know, this is my problem, not a german problem)
It's not that is hard, it's very time consuming, manual, and involves a lot of paperwork. Other countries do this much easier. Also, shutting down a company... I'm still trying to figure that out :(
It might have changed, but a few years ago you could go from 0 to a fully functional limited company, with accounting, business account, registered address with mail forwarding, etc. in a matter of days, from the comfort of your sofa.
Previously Sweden was much tighter coupled to German prices, but since fossil fuels were cheap people didn’t really notice.
Today due to CO2 cap and trade fossil emissions are expensive. [1]
Couple it with a massive renewable buildout leading to a decoupling of the prices that didn’t happened before.
We now have maximum volatility. Jumping between expensive fossil prices and an absolutely mindbogglingly large surplus leading to essentially free energy.
As Germany, and the rest of Europe, transitions to renewables we will spend less and less time on fossil fuel marginal prices and see our energy systems stabilize on renewable and storage prices. Outside of emergency reserve style situations.
[1]: https://en.wikipedia.org/wiki/European_Union_Emissions_Tradi...
> Just look at the dispersion of prices across European electricity hubs.
Same Swedes were complaining (and still are!) about having to bail out the poorer members of the Union, should Sweden adopt the Euro and have a tighter integration with the Eurozone.
The common motivation of the EU is to smooth out these things across the countries, so we don't have these wild differences between countries. That might mean electricity gets more expensive for some members, and cheaper for others, but overall should lead to better usage across everyone. Basically socialism, applied to energy, so if you're OK with that for people, health and other things, maybe it makes sense to be fine with it for energy too?
If a person is taking lifesaving medicine that unfortunately makes their skin itch, you wouldn't call itchiness "a problem which they have created themselves in the first place"...
Our path forward are through renewables, which today are vastly cheaper than fossil fuels.
We decide the speed of the transition to green cheap energy by how much we tax fossil fuels. Low taxes = slow transition. High taxes = fast transition.
It'll make it easier for investors in one country to invest in businesses in another (assuming both are in EU of course). Larger pool of available investors == larger pool of investors who are fine with higher risks.
Currently, when you raise money, you usually end up with just local investors, because others can't be bothered to having to understand your local laws and regulations, and with everything that comes with that.
Personally, that's what's stopping me too. In one case I still went through and invested in a company in another country, but in most cases I don't even bother reading deeper about the company unless it's in the same country, would have to be an exceptional idea and team for it to be worth it.
The EU Inc. makes pan-EU operations simpler for businesses. This decreases internal barriers for trade, so it will lead to growth!
I feel like the mentality problem will follow the market realities. If startup founders become rich, they turn into investors and the startup snowball keeps growing.
Or, in reality: there's literally no expectation for companies to succeed or to turn in profit in the US, and hasn't been for over a decade.
US startups now exist to do one thing hoping for exactly one of two outcomes. Do: spend unlimited investor money. Hope: to be acquired by larger entities, or to engage in VC-subsidized predatory-pricing long enough to try and kill others doing the exact same thing, and become "too big to fail".
It's been a lot longer than a decade. The initial dot-com boom was nearly 30 years ago.
It's very much institutionalized at this point. And the US continues to produce the most valuable companies in the world.
For my third venture, I cold emailed a US VC (from their about us page) that specializes in cyber. Within a month I had a term sheet. I didn’t take it because it was contingent on relocating to the US or adding a US based cofounder/senior person ... but they were super proactive, introduced me to senior cyber operators, getting design partners and were clearly willing to underwrite founder risk early.
In contrast, simply changing my LinkedIn status to “stealth” triggered 15+ inbound messages from EU focused investors .. mostly low effort outreach, deal scouts .. It got to the point where I had a template reply along the lines of: “I’m not looking for VC coaching or therapy sessions — I just need fire and forget capital. If that works, happy to talk.” Every single one either went silent or declined.
In my experience, many European investors index heavily on hierarchy, control, validation, and internal consensus and tend to operate from a very rigid playbook of what a “proper” startup is supposed to look like .. whatever "proper" means.
I haven't seen that personally, most of the VCs I've worked with here in Europe who live here in Europe, invest in European companies. Most of them invest in companies in the same country they live in, because it's a bit of a hassle to invest in companies from other countries currently (hoping that EU-INC makes that easier), but none of them regularly invest in US companies.
If the EU really wants to light the fire, they should invest all those suddenly available defense euros in European companies only. Keep that going for a decade and there'll be a whole new generation of angel investors and small funds run by recently exited entrepreneurs with a soft spot for proper innovation. The SV VC culture didn't pop into being magically. It happened because a sufficiently large % of VCs had been entrepreneurs in a previous life (and not bankers), and their attitudes rubbed off on the rest.
"Today, if a company wants to scale up, it is confronted with different requirements in each Member State - that leads to an overwhelming 27 different rulebooks."
One of the biggest investors in Europe are pension funds. And this is one of the reasons why they did not invest in EU startups. And they did not expect this move until 2028. So it's moving faster than expected for whatever that is worth.
https://ioplus.nl/en/posts/pension-funds-set-to-drive-europe...
https://ioplus.nl/en/posts/pension-funds-are-open-to-investi...
Also: Germany is by far not the only country which requires a sort of imprint.
The accountant requirement I confirm, but also true in Poland for example.
The really big offense is that one must pay taxes for the next year based on the previous tax payments. They give a small grace period but then it’s on. It was supposed to be an emergency measure but of course it was never removed. It is a free loan to the state.
You can open a single person business though and skip the accountant.
I think there are some misconceptions about the US and tend to over idealize, especially around paperwork and taxes. And I think it’s precisely that misconception that makes it appealing to foreigners and makes it an attractive place to be an entrepreneur.
And again, yes, objectively it’s easier, but I don’t think that’s the main reason the country is successful in this aspect.
The USA's success is definitely not entirely due to a lack of paperwork requirements, though I believe the paperwork requirements are something of a microcosm of other issues in each jurisdiction.
And reseat, as others say, is not as easy; the gravity of decision making has to be in the country of incorporation; if your main shareholders and directors are physically in Germany and you reseat the company to where-ever, Germany is going to see and act like this is a de-facto German company. Hence you gain nothing, you get more paper work.
You're saying you get nothing, but you perhaps underestimate how time-consuming and expensive even the easiest company shut down in the Germany is. (I had a very smooth process winding down my company in the UK - you have my very sincere sympathies that things are a bit rockier for you).
>if your main shareholders and directors are physically in Germany and you reseat the company to where-ever, Germany is going to see and act like this is a de-facto German company. Hence you gain nothing, you get more paper work.
Looking online, here's a german tax-advisor who talks about the strategy of liquidating your company by first merging it with a uk company, saying you can close a company in 4-6 weeks by this process (though they recommend against it after brexit for liability reasons, but mention Ireland and malta as options). In germany you have a year of waiting, and lots of additional notary/accounts work. (OTOH, I don't know how you get it down to 4-6 weeks and avoid the uk's company house gazette notification period - they must pick a different kind of company - if your fees for closing down a company in germany are going into the thousands (or tens of thousands) for notaries, liquidators fees, and the like).
https://www.stmatthew.de/brexit-gmbh-sitzverlegung
Once again, not my specialty area, I just...wanted you to know that it does happen, is a specialty area of work for some companies, and it's presumably not irrational behaviour.
It’s the first link on the home page (“in-detail proposal”). One would presume anyone interested in what EU-INC is to read the first section titled “WHAT IS EU–INC”.
There's the real reality, and then there's the reality as it is perceived by the bureaucratic apparatus, the "upside down." It's important to realize that everything in the "upside down" must be consistent with the rest of that reality, but not necessarily with what actually happened in the real world. The closer your activities get to the government and government scrutiny, the more true that description is.
Did John have to go somewhere on Monday and finish his work on Saturday instead? He could have filed for time off and then gotten special permission to work on Saturday, but that's far too many forms with far too many signatures. It's just easier to pretend (on all documents, yes all of them, the "upside down" demands consistency) that he did in fact work on Monday and did not work on saturday. Americans call it fraud, Europeans call it Tuesday.
"Having no revenue" is definitely not the definition of a startup. There are plenty of startups with revenue (and even profit!)
How would you pay your employees making the product/service that will eventually bring in the revenue? That's what "own capital" is for.
Typical LLC/JSC will have at the very least one employee -- the CEO -- and that will bring one minimum wage worth of expenses (sort of). There are legal entity types that can function without employees with shareholders sort of self-employing, but those are not universal across the EU.
This is beneficial. It allows small companies to bootstrap without incurring the complexity and cost of having employees until they have enough revenue or capital to justify that expense.
Now that the deal is de facto frozen, any remaining goodwill between Mercosur states and the EU will burn away (especially because Lula put his personal reputation on the line right before a highly contested election in Brazil and because Spanish politicians constantly meddle in South American culture wars [4] due to familial, financial, and linguistic ties), leaving the EU even more alone in an already lonely and dangerous world.
> although hopefully not compromising on "environmental and consumer health policies", that'd be a blunder of it's own.
This kind of stubbornness is why the EU is increasingly being isolated globally. Either make pragmatic deals on your own terms or end up being forced to by other countries on their terms.
[0] - https://www.ft.com/content/401a9e84-3034-4375-bf39-56b92500c...
[1] - https://www.reuters.com/business/energy/brazil-billionaire-b...
[2] - https://www.ft.com/content/d293237e-e39f-4f4c-89e7-4c52cf937...
[3] - https://www.bloomberg.com/news/articles/2026-01-19/irmaos-ba...
[4] - https://apnews.com/general-news-d45baf0e625d4e0fa540b7a472bc...
Menawhile almost every single of those "valuable" companies are either actively harmful, or keep offloading the effects of their operations onto society.
Prime example: Uber lost 20 billion dollars, will never get them back, and offloaded all the issues of gig workers on workers themselves, or the society. It's "value" (market cap) is "175 billion dollars" (it's not)
Serious cancers are on the rise among the young and the type of plans you allude to do not provide good coverage. And why limit startups to the young, or limit their ability to have a family? 40+ founders have a higher business success rate.
I think the US is having so many problems now because it wants to half-a** aspects of living that should be solid for false efficency.
Startups should be a voluntary fiscal risk, not a direct risk of life, limb, or family. That's also how you optimize for the success of the startup - by removing distractions and worries that are not directly in the startup proposition.
Sure, one startup will go down because the young founder had cancer, but that's not common enough to skew the average case too much.
40+ founders like me often had an opportunity to save for healthcare costs with the high salaries in the US plus Obamacare.
It's a fact that people in the US create lots of startups. Maybe the system could be much better (still not comparing to Europe) but it isn't too bad to be honest.
The claim was that "business operation across different countries" is a "a real bottleneck for EU SMEs" currently, I don't think that has anything to do with investors?
I'm put in mind of US citizens who seem to be the lepers of international finance, often when I see prospectuses they have a lot of text on the the front saying "don't show this to anyone from the US" because they don't want to deal with the compliance costs of US law. In that case it is the US's problem and the US has an easy solution.
When people talk about larger regulatory frameworks they see the problem as the more permissive side is giving people options and want that shut down immediately. If the US started talking about global regulation to ease investment, for example, that means they don't intend to make it any easier but they do want everyone to adhere to US compliance ideas whether or not they do business in the US. It is a way for people with bad ideas to make the world worse. I'd assume the situation in Europe turns out similarly.
If you do the math on the number of pairs of EU countries that need to find bilateral solutions ... it becomes clear why the EU government exists. It's just not efficient otherwise. (Answer: 351)
> When people talk about larger regulatory frameworks they see the problem as the more permissive side is giving people options and want that shut down immediately.
Who are you talking to? People on HN and in US business, and the most popular theme in US government, is anti-regulation. I think both sides are misguided, sort of like being against or for laws - we need the right laws; sometimes we need more, less, or changes.
> US citizens who seem to be the lepers of international finance
> If the US started talking about global regulation to ease investment, for example, that means they don't intend to make it any easier but they do want everyone to adhere to US compliance ideas whether or not they do business in the US ...
Doesn't Wall Street dominate international finance? They don't seem like lepers. Also, when international financial regulation has been discussed, I think it's the US that usually undermines it. But maybe you mean something else than what I understood?
That logic doesn't hold. If it made sense supermarkets wouldn't work because they have to hold bilateral negotiations with hundreds of thousands of customers. In practice, they just offer a take-it-or-leave-it deal and people either accept it or they don't.
Similarly, countries offer a take-it-or-leave-it set of requirements to foreign investors. If investors aren't taking the deal, countries have the power to unilaterally renegotiate what they offer.
> Doesn't Wall Street dominate international finance? They don't seem like lepers. Also, when international financial regulation has been discussed, I think it's the US that usually undermines it. But maybe you mean something else than what I understood?
I dunno, maybe they operate out of the Caymans or something legally complicated. I'd estimate maybe 20-30% of the stock offers I see have a lot of front matter materials saying something to the effect of "if you come from the US you aren't even allowed to read this, go away". Very US-specific exclusions. Maybe the offers I get are too small time? I dunno, I just report what I see. I always chuckle at it though.
It's not so much about the reading out loud, it's about making sure you understand (so that you cannot later claim "but I didn't know about this, nobody explained it to me properly")
The whole point of a contract is you sign your name to the words on the paper, and you are attesting that the words therein are correct and what you agree to.
In parts of Europe, our soil essentially depleted. I recommend reading.” 100 harvests.”
And exporting the model that ravaged one own land, selling the poison that was forbidden in the countries exporting it, what kind of behavior is that? Letting some land having a bit of rest while the same depletion process is applied elsewhere, how fair is that?
Why is Germany ten times less efficient?
It is and should be an issue. You shouldn’t be required to put in any money towards a text to speech translator let alone 1000€.
Possibly closer to the US Inc?
The faster we get off fossil fuels the better.
The growth in the US is much smaller than Europe, except a few cases like California.
So correct me if I had way too little coffee, but that subdomain is under eu-inc.org meaning eu-inc.org is in fact the grassroot movement then? I don't understand the complaint, seems to be the right people? You're mad about that they also sell hats?
This is unofficial, pushing for merch, 5 lines of info page, and should not have replaced a post about more detailed news reports.
At what specifically?
At preventing another European war? Up until very recently, pretty good. No more world wars as of yet, but 80 years has past since the last, everyone with memories of how horrible it was, are almost gone, so I guess we're building up to another one. I'm hoping that at least Europe sticks together if it gets down to it.
I'm not sure why GDP is such an important indicator to you, it's just the value of goods and services, what purpose is that supposed to serve?
USA keeps getting a larger GDP you say, yet the population at large seems to be getting poorer, education and health care gets worse, and people finding it harder and harder to find somewhere to live. So what good does a high GDP actually give you in the world today?
Official procedures can be made smooth by valuing them being smooth.
Just for hiring someone from France?
Smaller countries like Estonia have the ability to be much more nimble.
That is interesting. I wonder why. It seems like they could offer a combined prospectus that addresses all major sets of requirements. I do know that the US an (much of?) the EU use different accounting standards; maybe the numbers are for one region or the other.
> That logic doesn't hold. If it made sense supermarkets wouldn't work because they have to hold bilateral negotiations with hundreds of thousands of customers. In practice, they just offer a take-it-or-leave-it deal and people either accept it or they don't.
This isn't buying a can of soup at retail.
FWIW, I also live in Spain, and also pay "high taxes" as I'm in the highest income bracket, and it sucks to see large parts of your income and capital gains disappear. But then I've also experienced the health care here, and see everyone being taken care of, and I sleep well again :)
The company lives in Estonia. Yeah if they are taking income personally locally then that should go to the country of residence, as is normal.
But then if what Estonia considers acceptable standards for tax reporting differs from what Spain considers acceptable, or what they consider 'profit' etc, well good luck!
However, most HNW Europeans who invest in early stage do not invest in the EU and therefore you will not have worked with them.
But the claim was that early stage VCs in Europe invest in US instead, contrary to my experience. If they were instead investing in US companies, I'd see that instead, I don't know if I used the wrong word here, where exactly is the tautology?
I don't understand the assumption that I wouldn't know what my peers are up to, unless you're assuming I only know these people because they specifically invest in European companies, is that what you're trying to imply?
Not to disrespect your experience, but I don't it is particularly relevant, because the capital deployment from EU HNW is overwhelming deployed outside the bloc, largely in the US.
> I don't understand the assumption that I wouldn't know what my peers are up to, unless you're assuming I only know these people because they specifically invest in European companies, is that what you're trying to imply?
I do suspect your peers aren't the Europeans deploying the majority of early stage capital or that you don't know what they're investing in.
Unification needs to be real, including grids, not on paper only.
The solution to which is to generate even more power in Sweden (so you can sell it off cheap and have it cheap too) or that Germany produces power more cheaply so that it's not giving Sweden so much money for electricity. Both of these should happen if the market is set up well.
All this in a country where electricity was almost free (to be fair, our dismantling of nuclear doesn’t help here)
No-one here worships them, they're just an obscenely rich entrenched institution running a racket as the gate keepers of certain notarized acts and doing anything in their power to lobby against innovation.
I could also ask you why U.S.-Americans worship a horribly broken school system or love lacking consumer and privacy protections. The answer is simple, it's not worship.
Being the world reserve and trade currency artificially props up the value of that currency (beyond what it would otherwise be), which has the result of artificially boosting GDP to GDP comparisons.
If it was just a matter of size, similar/larger countries would be in the same state, and at least one of your smaller states would get ahead right?
What? Yes, it did work for the Euro, countries that are participating are now more equal than they were before, which is the goal. Who knows what will happen in the future, maybe Greece or someone else will truly sink the entire union, but it hasn't happened yet, so lets not confidently claim "it didn't work".
> my parents putting up solar panels to offset german fears of nuclear is far away from them paying taxes so their neighbor can get health care
That's been the thinking for a long time, but for how long can we continue thinking like this? If the world is fucked, it'll be fucked for all of us, not just for people in Sweden or Germany, so the faster we can realize we're all in the same boat, the better.
The same boat is actually a good metaphor, you tend to want many smaller ones and not one big, risk of losing everything vs something (to a point).
Checking the requirements, it seems to me that any "first world" citizen would encounter a low barrier for entry, with exceptions for Russians ("second world" citizens).
- They are optimized for Big funds, Holding structures and Multinationals If you are a bootstrapper, or small company or any early stage startup, the ecosystem works against you.
- Setup costs are absurdly high if you include Notary around plus possibly Lawyer, Bank onboarding plus accounting you are looking at burning €10k to €20k easily before making a cent.
- The scourge of the state Fonctionnaires. Untouchables and incredibly well paid state employees. One told me would take care of my long delayed VAT returns... AFTER they would return from their long summer holidays in Switzerland ...
- It only works if you have some special deal like the famous Mr Marius Kohl also known as Monsieur Ruling used to do... "Leaked Documents Expose Global Companies’ Secret Tax Deals in Luxembourg" https://www.icij.org/investigations/luxembourg-leaks/leaked-...
- Banks will treat you like a criminal by default and assume, you are laundering money, or hiding taxes and you are compliance risk. They have extreme KYC requirements, and do account freezes for trivial reasons.
- Accounting is rigid, expensive, and slow. Taxes are not low in practice. On paper, it all looks good, but in reality they have the Corporate tax and municipal tax. Many complex withholding rules and limited deductions unless structured perfectly.
- The legal system is slow and formal. Everything takes a lot of time and a LOT of paperwork with more costly intermediaries. Small changes like directors, statutes will force Notary, Formal filings, Delays.
- The ecosystem is completely closed and relationship driven and the few startups like Talkwalker and Doctena are coming and financed from local families. Luxembourg runs completely on local networks and specially reputation over merit. If you are not local, from finance, or law or government circles you are invisible.
- Incredibly promiscuous relationships between the banks, law and legal professions, with a permanent revolving door between local companies and banks management and government officials. We are talking about less than just a few hundred people. This means Luxembourgeois families with long term historical relationships. Good luck on any legal or business dispute between you...and a local, who is a cousin from the local judge or government official....
I have had the chance of setting up and running companies in many countries. Specifically for Europe, currently I would suggest as two best options right now: Estonia and the Netherlands. Avoid France, Luxembourg and definitely avoid Germany.
I'n not entirely sure about that.
The vast majority of entrepreneurs are complaining about unrealistic requirements and inconceivable burdens in Germany. Certainly no one wants any of this. Yet somehow the rules pile up.
> In Germany
And then
> Yet somehow the rules pile up.
Which is just German culture as much as food is Italian. If you want rules for everything I'm hard pressed to think of a more regulated country than Germany. And the populace, in general, might scoff at how long things take but absolutely want to understand what the process is... So yeah, you can't have it both ways
Unfortunately the influence of Germany over other EU countries is quite strong in terms of regulations.
Absolutely no one wants more regulations, yet they slowly pile up in the whole EU. I live in Poland, where regulations are incomparably more sane than those of Germany, but even here it slowly grows.
https://www.bbc.com/travel/article/20250227-is-there-no-such...
Haha. May I introduce you to https://en.wikipedia.org/wiki/Prussian_Reform_Movement
German precision was not only about engineering, it has always also been about having a precisely defined bureaucratic process for everything.
Also, people never explicitly say they do want more bureaucracy. More often, the bureaucracy is more often a result of what people don't want to. They may want more roads, but they don't want them near *their* home, thus they fight for something to prevent construction there. They may want this subsidy, but they most certainly do not want person X to get it as well.
Which is extremely similar to communism. As in: perfect in theory, impossible in real life.
It's not a problem for me today. It was a big problem when I had no revenue, needed to do all the paperwork, meet ridiculous local accounting requirements connected to selling software in a different currency than my local one, write code, setup licensing, shipping the software to the clients etc.
It was a major source of stress and sleepless nights for me.
>>But even without those 3rd party solutions, I think the complexity is vastly oversold, it's relatively easy to get right compared to other regulations. Maybe I'm just EU-damaged already though, YMMV.
It's easy when you have done it once and know the process. It's not so easy when you need to understand if your product meets a definition of an electronic service or something else, when accountants you are meeting don't know how to setup VAT-MOSS thing because it's still rare or when you need to add your tax authority about something and their reply is that they don't know so you need to write an official inquire (that requires a lawyer) so you can get your answer in a few months.
When I was setting a new company in another country it was easier for me because I already knew how the process work and I could hire a competent accountant before the new company had any revenue. It wasn't so simple when I had 0 capital and just wanted to ship software to see if people want to buy it.
Since this depends mostly on what country you are in/you are setting up the country in, what specific country was this? Because it's not the same everywhere, and by the sounds of it, is a lot more complicated than most other EU countries. Germany is famously bureaucratic, as just one example, and differs wildly from the type of experience you'll have in Sweden.
> It wasn't so simple when I had 0 capital and just wanted to ship software to see if people want to buy it.
Most people, accountants or not, won't tell you this, but you're usually fine starting to charge people and running a business "unofficially" for a couple of months without having to pay any fines or anything when you finally "regularize" your situation. Many accountants have dealt with this sort of setup countless of times too. But again, people won't advice you to take this route, but it is one option if you just wanna ship software and see if people want to buy it. If no one buys it, just don't tell anyone :) Unless you're doing five figures or more in revenue, no one will mind.
Fine if you're selling widgets at a market in Germany - but if you sell software abroad, make sure you're following [each] one of the 27 VAT codes correctly.
(From what I understand - would love this to be wrong)
Yes.
> But there is no threshold for cross-border selling in the EU.
Kinda, but misinterprets the VAT itself.
Basically, VAT is paid at the point of sale and local thresholds apply.
Again, that directly goes against my own experience with the very same people you say are investing largely in the US. Not sure if I'm not being clear, or if I'm using the wrong words, but clearly something is missing/misunderstood here.
I'm actually quite curious who it is you think are people in the EU deploying capital in early stage investments, as you appear to be very confident?
I suspect maybe you're thinking of people investing in EU startups to avail of the myriad tax incentives like Germany's INVEST, Ireland's EIIS, etc. If so, then that represents a tiny fraction of capital invested by EU HNWs in early stage companies.
Yes, quite literally "hey lets suffer together", this is what we've signed up to, and want. Good for everyone and bad for everyone, we're linked and this helps us focus more on helping each other, rather than just focusing on ourselves.
> The same boat is actually a good metaphor, you tend to want many smaller ones and not one big, risk of losing everything vs something (to a point).
Yeah, that's probably the two mindsets that differ here. EU was created with the goal of "better one big boat than many small", because we've tried the "many small boats" approach for millennials, and somehow we in Europe always end up starting wars against each other. We've had (more or less) continent-wide peace now, for a good while (maybe the longest it's ever been? Not sure), and probably because of the reason that we're more connected now, instead of sitting alone in our tiny boats.
Currencies aren’t an asset. They don’t “outperform”.
If the Yuan had “outperformed” the Chinese economic system would have collapsed.
Germany is the biggest net contributor to the EU. The money comes from German taxpayers, who receive disproportionately little value in return.
If you want to fund bicycle lanes in foreign countries, go start a fund an fund them privately.
For the people that don't know the topic:
- yes, German taxpayers are indeed funding bicycle lanes in foreign countries
- it's not the only waste of money going to foreign countries
And additional questions:
- since when is it forbidden to complain against the waste of tax money?
- how does favouring tax cuts instead of tax money waste makes you a "right wing"?
>> - yes, German taxpayers are indeed funding bicycle lanes in foreign countries
Just for people to know this, we are talking about 44Mn€ (20Mn€ + 24Mn€) of money in Peru as the commentator mentions below. It is wasteful but it has practically no effect on Germany. There are 1000x things that Germany does within Germany that moves the needle more than the talking about this rounding error. But that requires introspection and ownership of responsibility - both alien to the country’s normal compliance attitude of working.
You probably have all the info right now, but make sure everything is 'in line'. I mean, have your company codes at the tax authority match the applicable union match the actual things that your company does. Depending on the jobs of the employees, it might be smart to split the company into multiple legal entities.
All in all you can be happy that this happened within a couple of months. Finding this out when you're years underway and then having to pay millions... I've seen plenty of these cases.
Want to start a business in The Netherlands? Make sure to do a 'CAO check' first, think about how to structure your company (one entity? multiple entities? what job goes where?), and do these checks again once you pivot or make certain changes to the actual work that your company does.
The rationale for this is also pretty simple: somebody got to pay for all this nice social security. They say it's part of the risk of being an entrepreneur.
What I don't understand is, we got a lot of help from RVO, Belastingdienst etc before and during incorporation. Nobody talked about this! We got sone numbers from Belastingdienst about social security contributions per sector, but like 15% cut per employee wasn't mentioned once. To this date I don't know what legal basis do they have to ask for this amount of contribution. Nobody mentioned any law, or a decision by ministery of social affairs. Very strange to deal with this, because it's literally someone showing up and asking for money without telling even based on what.. It gave very strong gang vibes, which was surprising for me as I was always a member of a trade union.
I quickly checked their website and it's a little unclear (so don't consider this legal advise), but their legal basis is probably the CAO. If that particular CAO has been made mandatory by law (which happens for certain industries that need tighter control from government, like temporary employment agencies), than it automatically applies to companies doing the exact work that's described in the CAO ('werkingssfeer').
It's a shame that RVO and Belastingdienst did not warn you correctly. The Netherlands does not want entrepreneurs, they want everybody cozy at their jobs at some big company.
Do you happen to be in or around Nijmegen with your chip development?
> how much their cut will be
Did you have any employees yet? I guess so. Isn't it the employees' responsibility pay for their union membership?
No, contributions are handled by the employer/company
You can bill as soon as you started the process afaik
I may be misremembering the exact steps because I tried drilling all those memories out of my head as soon as I left Germany.
I agree, the process is not easy or nice in Germany, but it’s enough to start businesses despite all the complications and overregulation. But getting VAT number and bank account in other comments mentioned Estonia was huge pita for friends.
Also taxes will be much easier. Just get one of the countless apps where you add invoices, and they generate tax reports for you. With an LLC or when employing other people, getting a tax consultant is advised. IMO, they are not expensive - how many hours of your time are you willing to spend on this topic instead of paying e.g. 200 EUR/mo?
I’m nearly at 3.5k/year and I have barely 10 invoices a month that I need to process between incoming and outgoing lol
Lesson learned I guess!
My feeling about tax consultants in Germany is that most of them are scammers helping lazy people to enter mandatory things in corresponding Elster fields. The ones with knowledge are super rare. Better ask AI and then verify the information, that’s cheaper and makes more sense.
It would have been significantly quicker if you used a well-connected law firm.
I know a number of friends of friends in Germany who have all visited the lawyer, the notary and the bank all in the course of one morning. The whole experience was orchestrated by the lawyer because they knew the notary and the bank manager. In some cases the lawyer even drove them around between locations. ;)
The Steuerberater then took care of the Finanzamt.
Of course this entails extra professional fees. But the point is that there are many examples out there showing it can be done in less than 8 weeks.
It’s crazy expensive, because of all the bureaucracy. The UG is supposed to be quick and easy to set up, requiring minimum capital… but the process proves expensive.
Most people are completely unaware of the risks and difficulties of running a company in our countries.
In Italy for example the tax agency operates on a model that is often no different from extortion and innocent people can suffer greatly because of it, I have seen it happen.
I am skeptical that EU Inc will solve all the main problems or even that it will become reality at all but let's see.
I see that everywhere though; my banks in my birth country NL, one of which I have used since I was born (my parents made an acc obviously) half a century ago treat me like that every year. Achtung! We are not sure who you are, provide a lot of paperwork or else! Worse even in other countries. And they are all very afraid of US residents.
People in the US may be many things but poor is not one of them. The median household income is ~$85k and the median household lives somewhere pretty inexpensive. The amount of money Americans can afford to waste on things they don't need is unmatched.
In EU many workers also wouldn't be able to afford to live without taxpayer-funded government subsidies, tax credits or regulations forcing employers to not be able to pay minimum wages below a certain threshold (which is not coming out of shareholders pockets BTW but from the overall company salary budget pie, IE high earners) which also gets inflation adjusted yearly.
The lower class is always subsidised in wealthy de-industrialized western countries, since the low-skill jobs that previously could support a family, either got automated or offshored to Asia, causing a loss of worker bargaining power, so your only chance of preventing mass riots is to subsidize the lower class here and there. It's a masked UBI with extra steps.
That’s my point.
It doesn’t have to be nice or clean or smooth, if there is a known solution which someone can just throw money at, at scale.
The harder problem with these smaller countries and economies, is people haven’t figured out how to do that yet. So you end up having to track down x or y random lawyer, then hope they don’t screw you, etc.
Lots of people have built homes and families off it.
What really slows an economy down is when money stops moving.
>>Basically, VAT is paid at the point of sale and local thresholds apply.
The threshold is 10k EUR (total sales to EU). The point of sale in case of software/electronic services is the country of residence of your customer. You need to collect two pieces evidence of that location, usually billing address and IP. If those don't match (your customer has used a VPN for example) you need a 3rd piece.
One Stop Shop helps with it (when I was starting my company it didn't exist and predecessor VAT MOSS was just being introduced and no one knew how to comply with it) but you still need to charge local VAT rates and report quarterly.
But sometimes I feel they are doing me a favor by taking my company, rather than me feeling like I'm hiring them as a service.
Totally agreed. Those big companies in return get a lot of benefits from the government. Most investment in semiconductors for example are going into the already big, and let's be honest, not do competitive companies to keep the alive.
We're in the Randstad. Nijmegen is nice but together with old Philips its semiconductor ecosystem has declined quite a bit.
Well, in your case, completely ignoring something rather than doing it later sounds like it would be more stressful for you, if the problem is not complying? I'm don't think wanting to comply with regulation makes you "not well predisposed to do business in EU" and I'm not sure where you get that from.
[1] https://www.iea.org/data-and-statistics/charts/annual-invest...
That doesn't mean we shouldn't still aim for the values we stand for.
Developing nations skip the fossil fuel stage entirely because Solar in particular and at a ceratain point wind is just cheaper than buying Oil and natural gas. Chinese EVs are also increasingly popular in emerging markets, not because they are more environmentally friendly, but because they are more cost effective to operate.
Wether or not it is because of environmental concerns or not, the world is moving towards cleaner technology, specifically it is also more efficient.
Considering that we in Europe have a remarkable absence of easily accessible fossil fuels, Europe should be continuing to push towards renewable technologies
I don't think it's a hard mindset to understand, giving up because others aren't taking it as seriously is the cowardly way to go about it. It's much more meaningful to show it can be done, help to scale technologies to become cheaper and more accessible for poorer countries, and inspire others with examples that it can be done so action can spread.
Obviously there are many global actors but we can model it simply as a two-player game: Europe and the-Rest-of-the-World.
Its economic payoff matrix looks something like (oversimplified and with direction only; scale appropriately):
v Europe/RoW --> Cooperate Defect
|-----------------------------------------|
| Cooperate | (0,0) | (-1,0) |
|----------------+-------------+----------|
| Defect | (0,-1) | (-1,-1) |
|-----------------------------------------|
If Europe cooperates and the RoW defects, Europe loses relative economic advantage and our world still burns.
If Europe defects and RoW cooperates, Europe gains relative economic advantage and our world (maybe) still burns.
If Europe defects and RoW defects, nobody gains an economic advantage and our world burns to a RCP8.5 crisp.
Obviously the preferred siutation is everybody cooperating so our world doesn't burn and nobody gains or loses an economic advantage. But the Schelling point is everybody defecting and burning our world to a crisp.
Everyone ought to push for global cooperation; we've all gotta live here and it'd be nice not to burn our only planet. But if Europe cooperates while the rest of the world defects (i.e. the current situation today), you're an idiot.
Someone doing something is always better than no one doing anything, can we at least agree on that?
This is the reason Germany hates small companies. Germany wants you to be a sole trader with no liability shield.
Some people hack the system by registering a company in another EU state such as Lithuania.
That being said, everything about the process is annoying and you always have the feeling that you're doing something wrong or forgetting something. Together with some ridiculously slow processing times, it's the perfect combination to frustrate you and I'm sure it ultimately reduces innovation.
But in reality, getting all the paperwork together is probably a couple of hours of work. You can buy services that do it for you for a couple of hundred Euros.
Why would the government need a business plan?
It's none of their business what you want to do with your company besides a general description as "software development" or "consulting services" or whatever.
bank (loans), immigration and investors can be interested, but their interests are not covering every corporation out there.
This is the problem. Let me pivot. Let me fail. Let my investors (including myself) lose time and money in bad ideas.
All the bureaucracy in the world didn’t stop Wirecard, but it sure as heck demotivated people from trying something new in Germany.
My point is that this move will not happen. I don't believe EU can overcome a huge and extremely motivated army of bureaucrats.
In general this has nothing to do with incorporation documents.
If a company unintentionally causes a large amount of damages, the company is going to get wiped out, but then you're just having the judge order the bank to transfer the company's assets to the victims. The owners of the company aren't particularly relevant except insofar as they now own a company whose value has been zeroed out, and they might be the ones to show up in court to argue against that being what should happen.
If the people at a company intentionally cause a large amount of damages, the corporation is irrelevant. If your "corporation" is in the business of stealing catalytic converters and the police come to arrest you, the person with the sawzall in their hands is going to jail, and if that person was hired to do it they're going to be offered a deal to testify against the person who hired them etc. Pointing to your articles of incorporation at that point isn't going to save you. That isn't what LLCs do, actual criminal enterprises will frequently have not listed the true principals on the documents anyway, and the government is going to try to prosecute the perpetrators rather than the patsies on the documents.
There is no real point in making this a burden for honest people. If they're honest then it doesn't matter. If they're not honest then you'd be a fool to trust what they wrote on a form anyway.
Only having experience in the US, I can tell you conclusively that if the company states it's job is to make and promote poison for untrained people to spray everywhere, let's call it "CircleHeavenward" for example, and they successfully convince enough people to buy and use it, but then it's found they knowingly told people to spray it unsafely and knew it would kill millions of people but his it, and millions of the customers neighbors are now dying, absolutely nothing will be done. Because they're a successful corporation and therefore completely immune to any responsibility for any outright criminal activity. Doubly so it they can successfully claim more than one person was involved in carrying out that criminal activity, and therefore the responsibility for it is distributed.
A lot of stuff is e.g. you have an old study showing that glyphosate causes cancer in mice in amounts orders of magnitude higher than typical human exposure. Plaintiffs are going to claim that means they knew it was dangerous, and maybe that's even enough to win their lawsuit. But lots of things cause cancer in mice in excessive amounts. Can you prove beyond a reasonable doubt that they knew it would cause cancer in humans in ordinary amounts? If not then you don't have enough to put them in prison. Also, which "them" is it? If you want a person, the actually guilty party is typically not the CEO, it's a middle manager who made the decision three decades ago and is now a retired non-billionaire. If you collected enough evidence then you could potentially put a middle class grandpa in prison for it. The actual reason this doesn't often happen isn't that corporations are rich.
But also, what does this have to do with the bureaucracy involved in entity formation? Is your theory that making it harder to start a small business would somehow have made it more likely for Monsanto to be prosecuted for whatever they did? How?
I believe it was just a crazy idea that was submitted recently.
The closest real thing is 75 VwGO which requires a decision in 3 months. The immigration office has been failing to meet that requirement for years with few consequences, because enforcing that right is expensive and takes even longer.
If you want to employ people, you need to file gratuitously obnoxious paperwork, but it’s still automatic.
What’s the actual problem? Why should it be harder?
Some states like California dislike small businesses in that they charge $800/year. But that’s pretty much it.
Marx won. You should learn how easy it is to fire an employee in a software development company in Germany.
(spoiler: almost impossible)
Simple example:
- Germany gives 100 € to other EU states
- Those states 100 € to buy made in Germany goods
- German companies have 10 € profits from those sales
- German state collects 5 € from those profits
In summary, German taxpayers paid 100 € so the state can collect 5 € taxes, and companies another 5 €. Not a very good deal.
And this calculation is crazy optimistic, because it assumes that all money that Germany gives to other countries will be used to purchase German good. In reality, they will be spent willy-nilly and German companies may not see even 1 € in return.
It's good for billionaires but not for actual people that matter.
Running a business is not something everyone should have to do anyway. It's good if it's hard. That keeps the cowboys at bay.
I would never ever want to own a business. I don't need that uncertainty. I just want a stable wage.
The prevailing idea here is that the US is best at everything and its model will always win. But in reality it's been in decline for a long time and it's become a pretty toxic society I don't want to see here in Europe. Trump is only a symptom of that but not the cause. The real cause is a top layer (which many HN commenters are part of) that is getting ever richer and a huge disadvantaged mass that is stagnant or declining. Their anger is what drives MAGA. Also called late stage capitalism. Going even more capitalist is not the way to fix or prevent that.
If the USA is in decline you must consider Europe a failed state at this point then? Nearly every wealth inequality issue is worse in Europe then the USA. Youth unemployment has become a permanent fixture of society, your housing affordability crisis makes the USA look really good, most of your nations can't afford to keep social services at current levels and will be cutting them over the next decade, and you need to actually spend on military now that's just going to happen faster.
It's kinda funny by trying to avoid "late stage capitalism" the EU is going to force themselves into it as quality of life and global relevance continue to fade.
At some point Europeans need to look in the mirror, and understand that the last 30 years has been a vacation, and even worse, there is now a whole generation who was born on vacation and thinks it's the norm.
We'll have to scale this up now but it is not a big problem.
Population collapse is a good thing. We already have too many people in this world, causing environmental and housing issues. We can't keep ever growing as humanity, stabilisation or even a reduction is very good. It'll cause some short term cash flow and elderly care issues but we'll deal with that.
And AI so far is more of a hollow promise and hype. It's not a race, the way America is approaching it it's inevitably going to lead to a bubble collapse.
Saw this yesterday related to nuclear deterrence in Italy.
Unless your welfare state depends on a growing population. Which is the case in many EU states.
I'd also argue that overpopulation is not a problem in Europe.
Are you going to look me in the eyes and say that you, and your general Euro brethren, have been pushing for a greater defense budget at the expense of greater social program spending for the last 30 years.
Please, please make that statement. C'mon...
This is the same Europe that thought it would be a good idea to buy gas from Russia, the same Europe that thought it would be a good idea to have a fully American tech stack, and the same Europe (whose largest company is an automotive one) that is importing cheap Chinese cars.
Anything to avoid having to leave their 30 year vacation.
It's not all about economy and getting ever more more more like the US. I'm pretty happy living here and I would never move to the US. In fact right now I wouldn't even visit it but hopefully the status quo doesn't last forever.
And it's not all about business. But about people, the employees.
Everyone here is missing this critical point.
The USA does not value human life as having value itself outside of what someone can contribute economically. Everyone talking about GDP, and "missing out" on AI, tech, etc.
Life has value outside of economic contributions. It's not a matter of "missing out" it's different priorities and philosophies of how to structure a human society.
Endless growth is not sustainable, and the late stage capitalism happening in the US right now is not sustainable. Why would anyone want to model themselves after it, seeing all of its failures and the enormous wealth gap it has created?
Only lazy people want to be employed for life somewhere. All the benefits, no responsibility.
There are plenty of workers that would not mind carring a little more risk in those companies for better pay, and those companies could offer better pay if not made to jump through loops.
Classic Example is the "Consultant" contracts.
Companies are paying through their nose to hire "consultants" because it's the easiest way they can try a new idea that might not work.
Company A pays Company B 1k/day for that "consultant", Company B does not have enough capacity so gets that "Consultant" from Company C for 700/day. Company C does the same and gets the consultant from Company D for 500/Day. Company D actually employs the consultant and pays him 200/Day. In this whole useless chain build to avoid the "can not fire even if your projects doesn't work" Both Company A and the actual Employee are losing big, Both would be much better having a direct contract for 500/day with the understading that this might not work after all.
Notice that for that Employee, stability is not there even now. yes he continues to be employed by Company D When Company A stops the contract but he is effectivly moved to another Contract with Company X. he is effectivly changing Jobs, new reposnsabilities, new collegues, new rules etc. only in the eyes of the state he is not changing jobs.
Only France really has a bit of the latter.
You can get rid of employees. You just have to show to the court that is necessary. Circumstances depend on whether it's individual performance or business need etc.
But the at will is very harsh and we don't want this here.
Many people intend those programs to work that way, but they don't: People still can't afford food, healthcare, housing, and education. The programs are also being cut back on a large scale.
> The lower class is always subsidised
Many would say it's actually the wealthy who are subsidized. For example, most policy, laws, regulations, and both political parties are oriented toward serving and facilitating the wealthy, or at worst, not displeasing them. The military is sometimes used to serve large corporations, such as oil companies. Weathy people often pay a lower rate of taxes: The tax on their primary form of income, capital gains, is lower than the tax on other people's primary form of income, wages; the numbers get worse when you account for welfare taxes, which are regressive. People literally die of poverty - they are unable to afford the care they need.
It's not as binary. It fails for some people, but it definitely works for most. There's always people slipping through the cracks of the net, even in the most generous welfare states, but that's a long stretch to claim americans are "dying of poverty" when they have an abundance of resources at their disposal to not die.
For example, if you're homeless american in a large city, you can go dumpster diving and get fresh food that's been thrown out just because it "looks ugly". If your tummy hurts, you can go to the ER and receive mandated sci-fi healthcare to not die, even if you're homeless. This is a far cry from the definition of "dying of poverty". I suggest you visit places like Russian republics, Myanmar or Nigeria if you want to see what actual dying of poverty looks like where you don't have access to free food and scifi healthcare.
The biggest problem killing americans is drug addiction and mental illnesses. Since if your brain is fried you won't be able to make much use of available free food and healthcare.
>Many would say it's actually the wealthy who are subsidized
That's always been the case since post-WW2 at least and gotten worse since Reagan. What's your suggestion to fix it? The super wealthy have too much power and influence over finance and politics, no matter who you vote for. Elected officials, on either side, will never touch them since they're in this together, so the system is working as intended, there's nothing you can fix here.
What, exactly, do you mean with "EU move"?
I guess technically it's a "European Commission" move, but overall it's a European and EU move, unless "move" has some specific meaning to you.
To employ a regular (non-management) employee in Spain (and it applies anywhere else in Europe), an Estonian company would to at least have a local address, then register and maintain regular contact with several authorities there (chamber of commerce, social administration, tax office). The bureaucratic overhead makes it practically impossible to have employees across several countries (definitely as a small company), the only practical option is to pay an employer of record ~600 EUR/month extra (significant salary difference) only for the joy of maintaining the employment paperwork.
The really fun part happens if a managing director moves. Then the company is considered to have a permanent establishment in Spain, needs now to maintain ALL administration like a Spanish company, and to comply with Spanish corporate law, in parallel to what it was already doing at home. Both countries' laws apply, both expect taxes, and it is not even clear cut how much of the company activity and profits should be taxed by the company's home country and how much by the director's country! And having multiple managing directors in several countries is probably an exercise in frustration.
Then, if the director has enough and moves somewhere else, it all starts again in the new country (and you also have the headache, costs, and risks of closing the Spanish entity).
The EU may have free travel, but you can basically forget actually freely moving around as a small business owner, the company administration is prohibitively complicated.
This is why I don’t get what the EU brings to the table at all. I’ve considered starting something, never quite yet pulled the trigger, but I may as well do it in the UK because it’s extremely cheap, gives access to a great number of services, and I can do it all in English there.
It’s not like the company itself is going to be queuing at an airport or whatever.
I’ll have to file in Finland for the company anyway then, but I can skip all the stuff about starting an organisation here.
The actual practical option people end up using in practice (speaking as someone who've moved around in Europe, working for various other European companies) is that you ask them to self-employ in the country they live, then you treat them as contractors, offset any extra costs that'd come with compared to full-time, and do the best you can with that.
It's not ideal, and not a real solution by wide margin, and there is plenty of stuff that can get better, but I think it's the most "practical" and pragmatic option you can make use of today.
Yes, this again makes sense to me. You have a company in Estonia, so that pays taxes in Estonia. You work for this company from Spain, so you pay taxes in Spain. Doesn't it work the same elsewhere? What other ways could it work, assuming we want taxes somewhere?
> But then if what Estonia considers acceptable standards for tax reporting differs from what Spain considers acceptable
Yes, that also makes sense, different countries have different systems? Again, if you open a company in Estonia, the ground assumption has to be that you're up for understanding Estonian tax laws. If you're living in Spain while working for that company, the ground assumption is that you're up for understanding both Spanish and Estonian tax laws, because they should of course get their taxes.
As long as I don't get taxed on the same money in both countries (which there are a lot of bi-lateral agreements solving that), I don't see the issue here.
That's exactly one of the current issues. The general rule is something like 'taxation happens where the company creates value'. Registration in Estonia just means taxation starts in Estonia. But at any point can Spain say 'we consider this a Spanish company'. After Spain taxes too, you can request a tax refund in Estonia. That's assuming they agree. Both countries will only communicate with the company, not with each other.
So while double taxation treaties are great, they are not doing much upfront in this respect.
The above is about company taxation, not personal taxes. For SMB that line is often confusing.
If the Estonian company is supposed to be considered a separate legal person based in Estonia, it shouldn't have to deal with anything Spanish.
You can't have a single monetary system without complete unification, including tax systems, budgeting systems, governance models, retirement systems, benefits. I mean, you can, like we have now, but it's not sustainable, and eventually we all have it worse.
As a European, I would not want to go that way, since I'm afraid such a unified EU will be a bureaucratic monster that is even more centralized than the USA, and way more autocratic than any current EU state.
I'd rather take a step back, dissolve much of the EU's competences, and go back to pure trade union, dissolve the EURO as a currency, and let every member state take sovereign decisions on their own.
The EU, on the other hand, is not a federation, it is a association of nations trying to figure out how to go together, be it as a federation or something different, because in today's world you need size and power to survive. Any EU state alone would be insignificant on the world stage and being sidelined one way or the other. The most powerful inside the EU would suffer the most, e.g. Germany or France, because while the EU is second or third on many metrics, the individual nations are small. Depending on which ranking you look at, the EU is just behind the USA in military and economic power, sometimes it is behind China in economy, too.
The strongest individual economic power of the EU is Germany, which globally usually comes in 4th place after the USA, China, and the EU as a whole. But this is deceiving, when you look at the absolute numbers. Germany's output is impressive for its size, but is still only about a quarter of China's! Germany alone is a dwarf and without the EU would be inconsequential. The post-Brexit UK is just learning this the hard way and all the sovereignity does not matter a damn. The top leadership of EU nations are not stupid, even if they could explain their reasoning better, and thus try to keep the EU going, despite its many flaws.
This is a Chesterton's Fence situation.
All of them crumbled either peacefully or in bloody wars.
Why do you think such a bureaucratic monster that no one really wants would be an exception?
Maybe we can try it again in the 24th century, when the humans evolve enough, but for now, your best bet for a successful country is either an ethnonational or religion-national state.
If the Estonian company has employed a person located in Spain, shouldn't the laws of both countries apply to this employment then? The employee lives in Spain, so obviously Spanish labor laws should be followed, and the company is in Estonia, so obviously Estonian law should apply.
I'm not sure why the Estonian company wouldn't have to follow Spanish law if they've decided to employ a Spanish person? What laws should cover the person living in Spain, Estonian laws, although they don't live there?
Sure we can get society to pick up the tab but the problem is that those cowboys are even more incentivised to be risky then. There should be a penalty for them when it goes wrong.
However I don't think we need a huge military in terms of boots on the ground. We just need a nuclear umbrella to avoid the likes of Putin to roll into europe. Most of our foreign military adventures were requested by the US and only about oil, not safety related. Even the nato article 5 afghanistan trip was completely useless (bin laden wasn't even there, afghanistan had nothing to do with the attacks and since everyone pulled out things are 100% back the way they were).
And yeah we bought too much American tech and chinese manufacturing (but so does America obviously). Cars aren't that important to single out, a lot of us don't even have one.
And Europe was a lot more socialist > 30 years ago. It's the last decades that the neoliberalists (including the EU itself which has strong neoliberal underpinnings) have been hollowing out social protections in favour of business.
This is what I mean when I say the US model isn't necessarily the best. Americans are often completely convinced of that, that there is no other way than ultracapitalism and heartless social policies. I absolutely don't agree there. The US is best at making some people insane amounts of money but it's not great for social cohesion and a decent life for everyone.
With that said, more investments into other energy sources are totally welcome, and I don't think that should mean we also need to tax pollution less, we can have both :)
When the government says that the market should do something, people complain about government interference. When the government lets the market do something, but sets the right incentives, people are complaining about it again.
Co2 taxation is effectively internalizing the cost of co2 pollution. The price goes up the more we pollute, because we have less budget until we cannot reach our goals anymore.
Honestly, that explains a lot. Vastly different perspective from what I'm used to, but useful insight into the US.
Still way easier than India, for example, where the answer is often either the same or ‘try to scam your way around the problem’ if you can’t.
The most annoying people, which we didnt have many but still a few, are the ones who, right after the trial period, or when they smell a rat, will go 'oh no, i feel something behind my eye and in my wrist, your work made me ill' and then go home. you would have to pay them and be nice about it (not threaten them with a beating).
Obviously, having a credible plan helps if you try to convince banks to loan you money or any such thing, but the act of registering a company requires no such thing.
Kind of like fizzbuzz, just something really simple and most basic to get rid of the "easy scams" and so on.
Edit: So "easy scams" are probably the wrong word, I initially wrote "riffraff" because in my mothertoungue that isn't so... disparaging, but what I meant was that it's used as "bare minimum filter" basically.
Done.
It's going to hurt, but that's what happens when people don't look to the future and do everything out of greed. The sooner we stop population growth the better.
But this is the status quo in Europe. Companies are forced to take failure into account before they dive in deep, because it will cost them. Provide benefits for their employees, etc. This is good. Companies exist to provide jobs. Not only to make money for the owner and externalise all the negative effects on society.
I just don't understand the desire to turn the EU into the US. If you like how business in the US works, just start your business there, not here. Meanwhile I as a worker would never consider moving there. This way we can both get what we want.
I think it's safe to say that the one who starts something has the privilege to make the call on its purpose. And I'd bet most if not all people who start companies do so in order to make money for themselves, and providing jobs is a means to that end.
So, if a company could make profit without employing a single person, it would still serve its purpose.
But from the perspective of the individual worker, a much more important continuity is the one of salary, insurance, and pension. This is the stability that the employee continues getting at Company D.
in the current scenario of contract works, the employee is getting all the negative effects of changing a job without any upside.
of course I am not talking about complete US style firing, but something in the middle. The option to fire with adequate notice let's say 3 months and adequate compensation, let's say 3 months of compensation after finishing your time. This way, the employee has 6 months of job Hunting, (I think that is a sweet spot to make it reasonable for both the company and the employee)
Companies also currently aren't completely banned from firing people. If and when they do, it can look like you described, with adequate notice and compensation.
While for some cases there is room for abuse (like Amazon Kindle eBooks are sold to Germany by a company situated in Luxembourg, while only selling via amazon.de to audience with German residency) However my employer is a Dutch B.V. with headquarters in Germany, thus they avoid having to form a board with works council representatives as a German GmbH (or AG) of comparable size would require.
So if the executives and board meetings and books and records are strategically located in one country and most of the business operations are in a second, it's valid and probably even required for the business to have its tax residence in the first country rather than the second.
It may very well have a permanent establishment and therefore some tax obligations in the second country, but that's different from the second country being the primary tax residence.
> However my employer is a Dutch B.V. with headquarters in Germany, thus they avoid having to form a board with works council representatives as a German GmbH (or AG) of comparable size would require.
Workers rights are being unified, but that's a long complex process, as work cultures vary a lot and most companies fear German-style code termination, while it's an uphill battle to weaken it in Germany, thus it remains in national law's responsibility.
And to be clear:
a) works council exists with all normal rights, only they don't have board seats, which can be quite powerful, especially in public companies where one might form alliances with independent share holders. In the case here it's a 100% subsidiary of an American corporation, so they get their will one way or the other, board members may only delay
b) I am somewhat priviligedge as I am no simply replicable conveyor belt worker, but somewhat specialized engineer
c) I'm currently on garden leave period after 18 years in the company (incl acquisitions) due to a reduction, where works council produced a quite nice exit for me, so the only time I needed it, it worked well. But then I am somewhat privileged over others, making it hard to generalize.
And no, wealth inequality is much higher in the US: https://worldpopulationreview.com/country-rankings/wealth-in... . And those are averages, we don't have people making 100.000x more than others.
We also have wayyy less violent crime: https://worldpopulationreview.com/country-rankings/violent-c... , and much less people in prison per capita
LGBTQ+ rights are way better covered here (with the exception of a couple countries that should really be booted out of the EU). Also really important for me.
We're doing pretty good, we will have some challenges going forward but that's always the case. Military equipment is something that we're now buying a lot from the US where prices are really high, and once we move that to European vendors we can get a lot more for the same money (this is similar to how Russia manages to have so much military power on a country with a GDP similar to Italy: they make it themselves with their own purchasing power).
The one challenge to the EU is not to fall into the austerity trap as they did in 2007 though. And we don't need so much. I don't need or want a car, a big TV, daily takeaway coffees etc. Less consumerism is also a good thing.
Absolute numbers don't matter as I was saying the issues caused by wealth inequality such as housing crisis are much worse in the EU.
> We also have wayyy less violent crime
Fair but I will say ours is very concentrated to specific areas / demographics so the average person rarely has to deal with that.
> LGBTQ+ rights are way better covered here (with the exception of a couple countries that should really be booted out of the EU). Also really important for me.
So they are worse?
> Military equipment is something that we're now buying a lot from the US where prices are really high, and once we move that to European vendors we can get a lot more for the same money
That's a two decade plus plan that hasn't even started and is already running into issues. Doesn't help that the EU needs weapons now not in 20 years.
> And we don't need so much. I don't need or want a car, a big TV, daily takeaway coffees etc.
It's one thing not to want it's another to not to be able to have.
There are plenty of European member states that want the ability to control very precisely what you do with "your company". You want to call yourself "a software engineer"? Ooops...
In the EU it seems particularly the German-speaking countries are borderline obsessed with a) titles, and b) whom may use those titles. See, for instance, https://news.ycombinator.com/item?id=34096464
There is nothing borderline about that - the German cultural space (including very much the countries of former Habsburg Empire) is still completely obsessed with titles and formal positions despite many of them losing any practical importance in modern times.
https://www.existenzgruendungsportal.de/Navigation/DE/So-geh...
Exhibit A: https://www.ctvnews.ca/montreal/article/battery-facility-acc...
"Following regulation" sounds great until it's revealed that corporate lobbyists have been helping (co-)write regulations to make sure that fair competition is quashed.
But for company tax law, that company is a tax resident in Estonia, not Spain.
Also, we harmonise laws such as traffic laws (for example, in Finland, all solid yellow central lines were painted white) so that people have the chance to work across the whole union as transport operators, why not do the same for entrepreneurs?
So in that particular case, would be in both Estonia and Spain, just so we're on the same side?
> But for company tax law, that company is a tax resident in Estonia, not Spain.
Indeed, and I don't think the Estonian company would pay Spanish taxes, correct? Unless they have a presence (subsidiary for example) in Spain, then they would have to pay Spanish taxes. But if not, it's only the employee who pay Spanish tax. Or did I understand incorrectly?
> why not do the same for entrepreneurs?
I think this is exactly what we're doing right now :) Small steps, but EU-INC seems to be one of those steps in that direction.
It sounds like we are. If labour is being conducted in both of those countries then yes. And the same anywhere else where someone might join the party.
And on the tax thing - yes again, but what I see happening now in European countries, is that, if a person of significant control resides in another country, then that other country considers the company a tax resident of that country too.
E.g: I live in Finland. If I were to open an Estonian company and have it literally do nothing all year, not only would I have to file a company report in Estonia, (fine, that's why I chose to start a company there, perhaps it's really easy) but also file a company report in Finland as if the company were a Finnish company.
I think this is an overreach of bureaucracy and adds a friction to entrepreneurship. Others might think differently - which I completely accept. Unfortunately for me, I do not think that this initiative here will change this, much. Perhaps I am mistaken. Either way, it is in the right direction and I support it.
> Europe seems to be 20-40 years behind the US in various economic and social developments
That's one perspective, another is that US is 20-40 years behind Europe because the average person can barely afford to stay alive in the US right now, which is much less of a problem in Europe. But it all depends on what you value, I'm not gonna say one is more "correct" than the other, we all have our preferences and so on.
I'm just talking about holland here but all over europe the conditions are similar.
All the exceptions you mention were just sly ways the companies have tried to circumvent their responsibilities and the law has caught up with regulations to make those impossible or at least impractical.
And there are some exceptions yes. But those are mostly for in-between gig jobs. Not for stuff people make a career out of.
Of course there are also exceptions with easy firing for things like gross negligence. Though the employee always has the ability to countersue.
After the first extension the worker will not be hired again.
> Agencies can not be used indefinitely
Yes they can.
> A company is also not allowed to make an employee 'self-employed' by making them start their own company.
Wrong. I've seen this happening personally.
> I'm just talking about holland here but all over europe the conditions are similar.
You're talking about what you think is happening in Netherlands, and the conditions in many places in the rest of Europe are not like that.
> But those are mostly for in-between gig jobs. Not for stuff people make a career out of.
Not yet.
Isn't this type of generosity the exact reason why German companies are making restructuring and moving jobs abroad where they don't have workers councils and such generous exit packages?
Like I'm sure it worked well for you now, but I'm wondering how sustainable this is for German companies going forward, in a more competitive business-cutthroat globalized world, that has less and less barriers for capital and trade.
It's also interesting how it plays together with social benefits: As it is hard to fire people, hire&fire isn't an approach, thus companies keep workers longer during a downturn, thus when they let go there is more budget for social security.
Also the effects of having works council representatives on the board might lead to decisions not tied to the quarterly results, but long-term stability.
This all of course makes it harder to do experiments, build up a business unit to see if an idea might work ...
As a worker it is quite good and the model worked quite well for large parts of the 20th century. With global competition (for many jobs exact location doesn't matter) it could be a factor which plays a role in being late with digital stuff.
You're reiterating the pros of why it's been good SO FAR, but you don't drive on the road by looking in the rearview mirror, if you get what I mean.
My take is that the german government will have to do another "agenda 2010" row of cuts to union and labor rights, if it wishes to keep jobs in the country and remain a competitive export economy, hell, even Switzerland has significantly less labor rights than Germany. Not saying that's a good thing, but it seems like that's one of the necessary evils if you want to have a growing economy, and not turn into Italy or France.
I wasn't talking about values. Yours or mines are largely irrelevant.
40 years ago, much of the US economy was made of stable jobs. Contingent jobs used to be few, labour unions used to be much stronger. Europe is under the same economic pressures as the US, and it's slowly trending in the same direction, just with 20-40 years of delay.
The US's HDI (0.938) is comparable to New Zealand and Liechtenstein [0], and significantly above Austria's (0.930), France's (0.920), and Italy's (0.915) [0], and the EU's HDI is itself 0.915 [1] - this puts the EU roughly in the same position as the US almost 16-17 years ago [2] despite both having a similar population.
That said, once you break the 0.900 range, the differences are essentially cosmetic so Europeans or Americans saying either are significantly behind the other from a developmental metrics perspective is dumb and deflects from issues that exist in both the US and Europe.
[0] - https://hdr.undp.org/data-center/country-insights#/ranks
[1] - https://en.wikipedia.org/wiki/Economy_of_the_European_Union
[2] - https://globaldatalab.org/shdi/table/shdi/USA/?levels=1+4&ye...
The only large European countries with a significantly better iHDI are Germany and the UK.
All this does is justify the fact that most EU member states have taken advantage of the peace dividend at the expense of countries that have heavily invested in defense capabilities like the US, France, and Italy which fuels anti-European sentiment that turned into the current diplomatic crisis.
Back in reality, inequality doesn't have an obvious relationship with country size or power projection, countries with superior inequality-weighted HDI like Germany and Poland spend more of their GDP on defence than Italy and the strengths and weaknesses of America's business culture, labour laws, welfare state, privatised healthcare etc (higher incomes for many but lower baseline living standards) really don't have very much to do with its military spending. If Americans want their government to tackle inequality they should probably back candidates advocating European-style policy over candidates advocating anti-European sentiment.
That's not what I claimed. Europe is 20-40 years behind in how the social fabric is being destroyed, making everything precarious and lives shitty, stressful and meaningless. Many good choices in Europe have slowed down that decay, but I'm afraid it's just slowed, not arrested.
And it's not so much as the "peace dividend" helping Europe, but the opposite: the US have made themselves poor because with the same economic framework as today, the US would be in a much better position if it had an efficient healthcare system, instead of one that spends 2-3x the European average for worse outcomes, and if it didn't drive up the cost of living by allowing boomers to print themselves money by restricting housing construction though zoning.