Portugal supports a single EU Inc. Regulation for startups
Startup News Europe - Portugal supports a single EU Inc. Regulation for startups with its five founding principles that are gathering support at the EU Parliament under the theme ¨We need One Europe. One Standard. Not 27.¨ Here are the draft EU–INC proposal for EU startups, the reasons why EU countries should support the proposal and Portugal´s position on the new EU Startup Law:
What is the EU–INC proposal for EU startups?
The draft EU–INC proposal for EU startups is a Position Paper developed with input from leading legal experts across Europe, that sets out the five key aspects that must remain in the final text for boosting Startups in the EU. The draft proposal will be debated between the Council and the EU Parliament.
The aim of the EU–INC proposal for EU startups is: One unified standard, recognized the same way in every Member State, keeping governance and IP rights in the EU. The draft legislation aims at getting the details right in order to become a genuine economic driver for Europe.
Why should EU countries support the EU–INC proposal for EU startups?
Since less than 18% of first-round European investments are pan-European due to legal system complexity, the EU–INC proposal for EU startups aims to standardize investment processes, unify the ecosystem, harmonize stock options, simplify cross-border employment, and position Europe as a leading innovation hub. This way EU startup founders will be able to compete globally from day one and they should be able to raise investment globally from day one.
Here are the founding principles of the EU–INC proposal for EU startups:
1 - One central EU registry for all EU startups:
The EU–INC proposal for EU startups provides a solution for the EU tech sector by stating that one central EU registry for EU startups is essential to create a real standard. A company should be able to incorporate in one Member State and use that standard to fundraise, operate, hire, and pay taxes in another country without reincorporating to scale every time.
2 - Free choice of registered office for all EU startups:
The EU–INC proposal for EU startups states that a startup should be able to incorporate in one EU Member State and use that standard to fundraise, operate, hire, and pay taxes in another country without reincorporating to scale every time.
3 - Access for all EU startups:
The EU–INC proposal for EU startups states it should provide access to all EU startups by removing size caps, revenue thresholds and sector restrictions.
4 - Standardized stock options for all EU startups:
The EU–INC proposal for EU startups states that employee stock options should be taxed on sale, not on grant — with a safe-harbor valuation rule.
5 - Local labor law and taxes for all EU startups:
The EU–INC proposal for EU startups states that labor and tax obligations should follow real activity, not the company's registered address. Employment law should follow the country where employees work, not where the company is registered. This means that, as an example, if a startup hires in Germany, German labor law should apply to these employees.
What is Portugal´s position on a single EU Inc. Regulation for startups?
Here is Portugal´s position on a single EU Inc. Regulation for startups:
¨A single European legal status for startups is worth having for three reasons: registration that works across borders, employee stock options that founders and their teams can use in every Member State, and an insolvency path that allows a company to fail and start again without years in court. Remove any one of them and the result is not a simplification. The Council's compromise text of 7 September leaves most important issues unresolved and the file reaches the Company Law Working Party this week.
For Portugal, this is not a technical matter. Portuguese companies are European from the outset, because the domestic market is too small to be anything else. Each additional layer of national procedure adds cost and complexity, and it is founders who carry it.
The EU–INC Initiative has published an open letter and a position paper setting out five non-negotiables. Startup Portugal has defended this position in the European forums where we participate, and we will continue to do so. We invite the Portuguese ecosystem to read the position paper, share it, and add its voice.¨ - Startup Portugal
