European Commission Seems Determined to Undermine EU-Inc Initiative; Founders and Investors Warn European Entrepreneurs Will Lose Confidence
Eileen O'Mara, Vice-Chair of Stripe, points out that regulatory fragmentation among the 27 member states of the European Union prevents AI companies from covering the entire market within 48 hours as they can in the United States; US AI company revenues are already 30 times those of their European counterparts. The EU-Inc unified company registration proposal put forward by the European Commission in March this year was significantly diluted during negotiations among countries, retaining only the fast registration function. A joint open letter from founders and investors calls on political leaders to intervene to save the initiative.
Eileen O’Mara, Vice-Chair of fintech firm Stripe, notes that many people perceive the European Union (EU) as a single market of 27 member states where one can form a company and operate freely anywhere. This is not the case.
She cites data showing that revenues of AI companies in the United States are 30 times larger than their European equivalents. Europe has only 20% non-bank capital compared to over 60% in the US. This divergence becomes apparent starting at the Series A funding stage.
In March of this year, the European Commission proposed the EU-Inc scheme, with the core objective of allowing entrepreneurs to register a limited liability company online for operation across all member states, aiming to complete the process within 48 hours.
O’Mara expressed concern that the proposal might be diluted into ineffectiveness during negotiations among individual countries.
Last week, a group of founders and investors published an open letter titled 'Dear Europe, why are you killing EU-Inc?'. They stated that compromises have rendered the proposal toothless, leaving it with merely the function of fast incorporation. The letter calls on political leaders to intervene to rescue it.
O’Mara pointed out that AI companies are globalizing faster than any previous cohort in the SaaS sector—the median AI company in the Forbes 50 list entered 59 countries within one year. The open letter warns: If European leaders cannot even reach consensus on a proposal like EU-Inc, European entrepreneurs will lose not just a proposal, but confidence in Europe’s ability to meet the challenges of our time.