It's inordinately difficult and expensive to start an LLC or SA in some EU countries. It's even difficult and expensive to _stop_ an LLC and dissolve it. Huge amount of risk and cost on founders and a huge distraction from running a business.
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".
Companies are treated like persons legally and while I'm sure there is too much bureaucracy in many places, I'm also sure that there are important documents that should be required.
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.
That's not a hack, if you operate the entity from Germany, it must be registered in Germany. It's often touted as a tax loophole, but it's not. Tax authorities do not care about you unless you actually make money, then they will come after you.
Would the liability shield not generally apply to a foreign entity registered in Germany? Sure there may be special rules for non-compliance with specific tax obligations, but I'm talking about for general liability for other purposes, like a contract signed by the entity where no personal guarantee was given, or a harm caused by the corporation where the owner was not personally involved or negligent in causing the harm.
It must be seated where the business happens for compliance with tax laws. But you may have a French S.a.r.l. in Germany and thus fall under their company law (with impact on publication responsibilities, company governance etc.)
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.
Specifically, it must be seated where the principal management of the business occurs.
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.
Damn, that's a pretty sleazy business practice. How do you feel about it? That would be a nice loophole to close.
It's not that easy if you want European integration and support the idea of "freedom of settlement" also for companies, which to me makes sense and it is known that some countries try to pull companies to register in their legislation with sometimes improper means. I would prefer to focus on Irish taxation, which extracts value produced elsewhere to Irish benefit.
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.
>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
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 is complicated and has multiple dimensions. For example it also leads to workers not switching Job away from an employer as quickly.
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.
Unfortunately your comment still doesn't address my concerns on how this model is supposed to be sustainable to work in the future given the new economic realities of Germany's faltering industry, and especially the existing intra-EU disparity between german labor and eastern European labor, let alone international labor.
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.
It's not that it must be registered (incorporated) in Germany. It's that for tax purposes if the company is run from Germany it will be considered "permanently established" and treated as resident there. Permanent establishment laws are often quite surprising to people doing business across different territories.
Piercing the corporate veil is a very common practice across countries, both in civil and statutory cases as well as administrative cases. It’s a very fragile shell.
German here. That's not true. What crazy documentation do you require? An ID, proof of residence, and a business plan?
(edit: you don't even need a business plan)
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.
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.
> It's none of their business what you want to do with your company
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
> it seems particularly the German-speaking countries are borderline obsessed with a) titles
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.
Actually I think I might be mistaken that you are even required to make a business plan. It's listed as one of the steps on the states portal about founding. But it goes on to say that it's not technically required, just highlights its importance.
Several sectors of economic activities have the potential for atrocious externalities and it's absolutely the government's business to know about these and make sure that you're following regulation to minimize these externalities. When you make your employees the neighbours sick (or straight up kill them) it's an enormous failure on the part of government. It's easy to be oblivious to that when you only think about software.
Except it seems that it's often large companies - typically those with lots of lawyers - who seem to get away with what I can only describe as "corporate misdeads" most regularly.
"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.
It’s interesting how people can apply thinking like “there are problems, it’s not perfect, better not to try” to government, but also be pro starting businesses
There’s absolutely no need to have a business plan to start a company in Germany. You articles of incorporation and they state a company purpose, but this can be something as simple as “do IT consulting”.
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.
It's basically a proof of "most basic effort" that you're serious. You could probably note down some stuff on a single A4 and get it approved, it doesn't have to be a 40 page dossier.
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.
That doesn't really sound like a barrier to the easy scams at all. It just sounds like something someone once thought would be a good idea and now everyone has to do it because that's the process.
Literally the whole effort this submission, is about is moving a tiny step towards "require none" but not go all the way, compared to how it is today. You chose the wrong submission to comment that on, in any "new regulation in EU" submission that might have been appropriate, but this move is quite the opposite of what you say is happening.
> For example to make sure that a company can be held responsible when it breaks the law.
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.
Syngenta got sued over paraquat and has already agreed to pay more than $100M to one set of defendants while still being actively sued by others. Corteva is paying in excess of a billion dollars over PFAS. Bayer/Monsanto is paying in excess of ten billion over glyphosate. That's only what they've already agreed to pay; others can still sue them for more.
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?
> In Germany, the government recently decided that some minor applications to local governments must be answered within X days or else are automatically approved.
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.
In most (all?) US states, you can just start a company. You file a form, usually online, with the state, and you ask the IRS, online, for an ID number called an EIN. Technically you have a valid company after just step 1, but good luck getting any sort of bank account without doing step 2.
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.
This is admirable but the process in Germany right now is overly burdensome. It probably does weed out some bad actors (and good actors) not because of the documents required or any sort of checks performed, but because it takes months and costs thousands of euros.
Which in itself wouldn't even be a problem if lack of said documents caused your submission to automatically fail validation right at the start. Instead, a real, live person will need to review your request to verify that it indeed includes a full set of documents, said documents are genuine and "correct" (despite most of them already being issued by the government!) before approving your request.
And given the founding principles of bureaucracy, no set of documents is ever correct because there are at least two contradictory regulations on any given topic.
I think what's even more important is that the costs for founding and maintaining such an LLC should scale with revenue, including scaling to 0.
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.
In Portugal (for example) is is mandatory for an Lda (limited company) to have an employee, and they must be paid minimum monthly amount. In practice this means a few hundred euros a month go to the government in taxes. Then on top of that is another hundred or so in accountancy fees.
As someone who had a company in Portugal I do not understand what you meant about requiring an employee to have limited liability company. You may be referring to the need for one of the owners needing to pay social security but it only needs to do so if it does not pay in any other form. It hurts but it is not unreasonable and may provide unemployment benefits.
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.
Not quite true. In Finland YEL (yrittäjän eläkevakuutus, pension insurance for entrepreneurs) is required and it's based on estimated value of the entrepreneur's work input. Even if you pay yourself 0 euros your YEL income is likely higher. The models that insurance companies use take revenue in account.
If they were being pragmatic about it, the more universal healthcare systems offered by many EU nations should be a massive advantage for startups vs nations like the US, but the wrong regulations around company operations negates it or worse.
I didn't want to start a healthcare discussion but employer costs with healthcare in the US can be lower than Europe labor taxes. EmployEE costs is a different thing but many startups have young employees who don't need a whole lot of healthcare in general.
The employee healthcare costs don't count, so we can pretend that healthcare costs doesn't detract from performance or the ability to hire talent?
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.
I'm not arguing which system is best. I'm just saying this isn't a big advantage for a lot of startups from a purely financial perspective, which was the original point.
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.
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
> Its also a chicken and egg problem. Having a revenue means having a company and vice versa.
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.
In the US, it is common for a small startup company to have no employees. Your role and title with a company is separate from your official employment status. This is where concepts like "sweat equity" come from. You can be an owner and work on a company without being an employee or receiving any compensation. Creating a company in the US comes with no real obligations to do something with it.
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.
In the USA California, Texas, Delaware etc all have different company registration and compliance processes. This has not damaged the business environment.
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.
That sounds like a significant problem ... for either the Germans or the French to resolve. The only thing stopping foreign investors is law enforcement officers telling them to stop. The Germans can, literally, just not do anything except enforce basic property laws and foreign investment would pour money in.
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.
> That sounds like a significant problem ... for either the Germans or the French to resolve.
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?
> 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)
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.
> 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".
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.
Has it been effective though? The EU used to have a bigger GDP than the USA in 2008 now the USA is over 50% larger. Member nations are still dragging their feet on doing much of anything in the Draghi report and it's unclear if that will ever change.
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?
> USA keeps getting a larger GDP you say, yet the population at large seems to be getting poorer
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.
"Poor" isn't just "doesn't have N USD", purchasing power as just one example, matters so much more. But maybe it was a poor choice of words on my part, sorry.
That's what government social programs like Medicaid and SNAP/EBT are for, accounting for about 800 billion in gov spending in 2025, and a total of 1,2 Trillion the US gov spend on welfare in 2025. That's exactly the opposite of being poor. If you want to see real poverty, go to countries that don't have any government welfare programs.
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 what government social programs like Medicaid and SNAP/EBT are for
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.
>Many people intend those programs to work that way, but they don't
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.
This is a commonly cited stat but it is mostly an exchange rate phenomenon that disappears when you adjust for purchase power. If you go by comparing GDP in dollars the EU recovered almost half this gap last year simply from the dollar dropping in value.
I was about to say... give dedollarization spurred by the current administration a couple more years and then compare GDP.
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.
My point is rather than almost anything can be made smooth if you have enough $$ pointed at making it so. One of the biggest issues with small economies is that they don’t have the capital spent to make it easy to do things yet; which is friction that helps keep them small.
This is so ridiculously contrary to a Northern European existence that it's just funny. US is ridiculously more bureaucratic with lots of back office papers shuffled around by humans. US tax filing is hard to even describe to someone who never lived there.
Official procedures can be made smooth by valuing them being smooth.
You just pay. All the problems are known and have workarounds, it just involves money.
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.
That's a very American approach. Just enable a grift economy existing purely because the original thing was bad. The Nordic approach is to make the original thing better. The end result is less wasteful.
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?!
> You know that EU bureaucrats do what each country want them to do right?
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.
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
> hard pressed to think of a more regulated country than Germany.
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.
Stereotypes exist for a reason.
It would be stupid to argue that every single Russian is exactly like that. But at the same time you'll find those traits exhibited in a lot of Russians at various levels of seriousness.
Being bigoted is also pretending that tribes/cultures do not share patterns and behavior.
Individuals are unique, but they exist as part of a group. When you talk about the group, you necessarily need to make shortcuts and synthesize.
I'm pretty sure that when you talk about dogs, you'll attribute specific behaviors to specific races. But now it is not politically correct to think humans are the same, even though it is scientifically provable.
> The EU was supposed to bring countries together, but I think it did quite the contrary
What are some concrete examples of how Europeans countries are now further away from each other, since the start of EU and because of EU?
As someone who enjoyed the ability of freely moving across the continent to find a country I'm actually comfortable living in, it's hard for me to imagine EU made countries more distant to each other, but I'm not all-seeing and would love to understand more from another perspective.
Well, in the logistics department there is definitely more freedom. But it's not as much as you would think. You can ship stuff easily, travel easily, and send money easily, but at the end of the day, you'll have to submit to the government bureaucracy of each specific country with no real unifying logic and not even a shared language.
Technically, English is used everywhere (even though, ironically, the English are not even part of the EU anymore), but you can't really rely on it to get anything done locally in small cities.
If you want to move in the middle of France, good luck trying to deal with the bureaucrats in English for example.
Then the freedom was a pretext to do a lot of social dumping. If you ask the workers of the Renault plant that got displaced in the east because of lower labor costs, they won't have a lot of good things to say about this freedom.
I know a trucker who somewhat hates Poles, not because he has anything against them particularly but because they engage in social dumping by competing for work in France while only following laws from Poland. A Frenchman living in France can never be competitive with that because he has to pay a lot more in taxes and follows the French laws.
Germany engages in regulatory warfare for electricity. They are ideologically against nuclear and imposed renewables as the only solution (while burning a shit ton of coal/gas). Since their approach is very costly and not reliable, they imposed regulation on the European electricity to make the cheaper French nuclear electricity less competitive. That wasn't enough, so even though they don't have nuclear anymore, they forced themselves into the Flamanville project and imposed their insane regulation (via Siemens), which is the major reason it took so long. This is industrial sabotage and engaging in bad-faith collaboration. And now we have to sell them winter electricity on the cheap while they offload their summer electricity that literally nobody wants.
It's impossible to not hate them for it, since electricity prices have risen tremendously for the end consumer. The crazy part is that it completely undermined the supposed goal of lowering emission (people went back to heating with wood-burning and paraffin/kerosene stoves).
Spain floods the market with cheap fruits/vegetables that are much cheaper not only because of geographical comparative advantages but also because they import cheap seasonal labor from North Africa, often not respecting labor rules (that much became obvious in the COVID crisis).
Italy wants to leave because they are going down the fascist path they already took a while ago.
Lidl, a German supermarket chain, sells cheap Chinese-made tools in their stores under the pretense of German quality. But since the rise of platforms like AliExpress/Temu, consumers have had access to similar items for even cheaper because they allow cutting out the middleman.
Unsurprisingly, the EU ruled that now consumers have to pay taxes on the items they buy directly from China.
Freedom is OK only when it is the powerful that can fill their pocket after engaging in rampant social dumping. For now, China has settled on shipping stuff to a warehouse located in Eastern Europe and dispatching it from here, basically using a regulatory loophole that allows them to pay the cheapest amount of taxes.
I could go on and on, but the reality is that the EU has largely impoverished and weakened most of its constituent countries. It doesn't look that way for now, because everything has been paid for with unsustainable debt. But now the invoice is being presented to the young generations.
The EU can't even manage to make a common army or apply regulation uniformly across countries (look at the labels on products).
All it has done is create unfair competition that benefits the powerful first and foremost.
So yeah, you can travel freely, but who cares? In my youth I traveled in many EU countries before it was open like that. Stopping at customs and having to exchange currency was inconvenient, but improving those mild problems is definitely not worth the massive amount of exploitation and dissent that has resulted.
The EU is the same ideological enterprise as the USSR, and the same problems that are linked to a massive bureaucracy are now showing up.
You just cannot force different groups to adopt the same rules/behaviors because there are too many cultural differences. Values are too far apart, and the environment/advantages are too different.
Germany likes the EU a lot because they have outsized political power in it and are the ones who profit the most: they get access to cheap eastern labor/resources while being able to sell in the rich markets of their neighbors on the other side.
We may enjoy the freedom while it lasts, because the EU is under attack from all fronts. Russia is waging a real war, China is engaging in economic warfare and the US is pulling out military support to gain resources.
The constituent countries are not any stronger, and in fact, they have weakened their position on many fronts. Fighting together is illusory because the interests/incentives are more often opposed than aligned.
That's a lot of words to skip around the actual question at hand here:
> What are some concrete examples of how Europeans countries are now further away from each other, since the start of EU and because of EU?
Are you claiming that France and Poland are "further away" from each other today than before, because of those issues about the trucker?
Are you saying that Germany is now further away from the countries in Europe than before EU?
You're going on a wild tangent, and I gave you the benefit of the doubt to read all of it, hoping that eventually you'd get to the point. But it's all tangents, nothing about the topic at hand.
So again, the initial claim was "The EU was supposed to bring countries together, but I think it did quite the contrary", do you have any concrete instances of this happening? Not theoretical, not how one Frenchman now hates Poles, but actual instances of the countries not getting closer together, but further apart, because of the EU?
Because currently, your non-answer makes it seem like you don't actually have any concrete examples here, leaving your original comment looking like ramblings without any rationality.
You should bear in mind that thinking of an IT specialist or a software developer is very much uncommon among population. As developers we tend to think alike worldwide. But walk out the door and ask ten (older) German people whether they would prefer to use government email-like service instead of paper mails, and see what answer comes to the top.
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.
Bureaucracy is a beast with its own life, it doesn't care what regular people want. In fact most folks' requirements go directly against objectives of this beast, since people want it as small and as weak as possible, while beast need to be fed and feels internally it needs to be strong. Anything not related to gaining or maintaining strength is antagonist.
And even if that's not the case, the group of "entrepreneurs" is so small compared to the voting population at large, that they won't even notice if they crush it entirely into paste.
Exactly this. Common folks like "tough on crime" postures of politicians and never consider nuance, which is everything. Yeah, crush them, those white-collared fraudsters.
> It's even difficult and expensive to _stop_ an LLC and dissolve it.
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.
I've been told by a lawyer that a common sensible step in closing companies in Germany is to first...reseat the company in the UK ... (at least pre-brexit - not sure if things have changed). Think of how bad and expensive the process has to be for this extra step to be worthwhile.
I have been trying to close a UK company for the past 2 years (created post brexit).
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).
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.
I am a European living in the US and my god I am tired of hearing this over and over again. If your biggest hurdle to start a company is the paperwork you’ll have to do for one week, you better think of something else.
And yes, there are other way bigger issues in my opinion, such as financing and even social support.
I don’t understand why people pretend there’s no paperwork to do in the US. Not only that, but different states have different processes.
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.
I agree that paperwork requirements exist on a spectrum, and I am only familiar with the requirements in a few different jurisdictions (though I've read a few comparisons with a wider variety).
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.
Having a startup in the US is a huge mess due to all the states and taxes, if Europe can make everything digital AND easier, it's a no brainer for us to move our company there.
There are many companies that deal with this complexity for you. Online payment processors and e-store services for instance. Source: I have an US company, sell products to all states and don't deal with this.
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"...
> Having a startup in the US is a huge mess due to all the states and taxes
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.
> Having a startup in the US is a huge mess due to all the states and taxes
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.
>>Having a startup in the US is a huge mess due to all the states and taxes,
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.
If dealing with VAT is a large problem for your business today, running a business might just not be for you, it's very trivial today to get it right and there are even platforms who basically does all the "hard" work for you. 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.
>>If dealing with VAT is a large problem for your business today
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.
> 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.
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.
For me it's very stressful to not comply with the regulation on purpose hoping I am too small to not get punished by the authority. It would be easier to just ignore the regulation.
I get this makes me not well predisposed to do business in EU. Thank you for your advice.
> It would be easier to just ignore the regulation.
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.
Hence most countries has a threshold for when you need to charge the country-specific VAT and let you use the local one until you reach there. It differs by the country as far as I know.
But there is no threshold for cross-border selling in the EU.
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)
Following US sales tax has way more complexity. In my county alone there are many different rates depending on the city in which the sale is made. Even just finding out authoritatively which jurisdiction to pay taxes to is nontrivial, practically impossible to solve without dedicated software.
> 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.
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.
>>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.
You can just use a service for that if you find that too much work to do yourself. There are MoR services that do that for you for EU, AU, US states where it is required etc. It is more that most people outside the EU find it bullshit and just don't do it and complain about it anyway.
They won't be able to solve the problem.
The only reason all those roadblocks exist is to control/regulate everything in a way to ensure the maximum possible taxation. At the same time, bureaucrats get to justify their existence, pretending to do meaningful work while they only take from productive people.
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.
> 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").
It was announced you will be able to create company fully online and will have it ready in max 48h.
Agreed. The one bastion of sanity in all this is (/was) the UK. I formed my first company there, 18 years ago, online, in 30 minutes, for around £20.
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.
> 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.
Is this a true problem in EU (or indeed anywhere)? I don't think starting a company is the bottleneck, it's mostly the inordinate amount of regulations one has to comply with, as well as the strenuous laws around letting workers go, while making people work as contractors being also frowned upon.
I'm not sure how any one these is going to change.
Those things are as designed. This is good. We don't want "at-will" employment like in the US. We want to have rights as employees. We want to have social welfare. We want our free healthcare.
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.
Free healthcare and social welfare I'm in agreement on. But why does at will employment need to conflict with that? The problems of wage values, food and shelter, and healthcare can be handled completely independently of employment. If someone feels it is too easy to do nothing without requiring employment to gain some of those benefits, you can have the government as an employer of last resort. But making it easy for anyone and everyone to start and maintain a business is a societal good. We are asking why doesn't a person have guaranteed employment, when we should ask why do they need it. If a person was let go and could with empty pockets be assured of food shelter and healthcare, and also be able to start their own company on the way home from being let go, that is the society I'd want to live in.
At will employment is something we'll never accept here. We don't need the threat of having nothing from one day to the next.
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.
I agree with everything you said except for the cowboys bit. I don't think business owners should be a separate class of people. It shouldn't be unusual to meet people that own their business. I don't want to do it, it would stress me. But we can let random people try random ideas without having to start out wealthy, and we shouldn't have the failure of that business and the loss of those employees' jobs, risk the health and well-being of those let go. If getting fired just meant you had to do with fewer luxuries until you found another, we wouldn't need to protect those jobs to the detriment of a business. By tying employment to safety and well-being, we complicate the whole matter.
Most people in the US own stocks the USA is "fixing" this by making everyone part of the owner class. Especially now with childhood investment accounts by the federal government (the "trump accounts").
By cowboys I mean the people starting businesses left right and center and just collapsing them when they don't get the desired result straight away. E.g. US venture capitalism. I think it's a really good thing that we don't have that here in Europe. Sure it prevents the googles and metas but those would never have made it that big here anyway because we regulate big businesses before they become uncontrollable. And now that we are breaking off ties with the US we will have to build our own anyway, just with sustainable and fair business models.
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.
Various places in Europe already have what amounts to at-will employment. There are exemptions for companies under a certain number of employees (e.g. 25 in Italy). There's a wide use of fixed-term contracts (6/12 months). Many work through agencies, which means they can be "fired" with a few weeks' notice.
Depends a lot on what country, but I think you'll find that the ratio of full-time employee vs contractor/at-will employee in most European countries will look very different from how that ratio looks like in the US (or other similar countries).
Sure, but that's very different from saying that Europeans have would never accept it. It's already happening quite extensively, though not as much as in the US. Europe seems to be 20-40 years behind the US in various economic and social developments, but it's not immune from them.
I don't read "we'll never accept here" as "it's be impossible", more like "we won't base our entire economy on that, it's not what the average person wants", because obviously Europe has various staffing companies already, and if you add a tiny bit of nuance into what they said, I'd agree with it too.
> 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.
> 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 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.
> That's one perspective, another is that US is 20-40 years behind Europe [...]
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.
Differences once you break the 0.9 range are more noticeable at the bottom end, particularly in the context of the OP's claim about people in the US "struggling to stay alive". There's also an "inequality weighted" HDI (accessible from your HDR link above by drilling down to the individual country data) which puts the US a fair way behind many of the EU countries the sheer weight of its per capita GDP puts it ahead of (on that index the US is even marginally worse than some of the wealthier Eastern Bloc countries, but interestingly on dead level pegging with France for the last decade)
Even then the US is comparable to France - the only European country that comes even remotely close to America's power projection capabilities - and significantly above Italy, a fellow G7 member and large EU member that also has power projections capabilities.
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.
Interesting segue from claiming Europe is 20-40 years behind the US to claiming if Europe's policy choices have resulted in any better outcomes than the US its because they're enriching themselves by taking advantage of the "peace dividend"! I guess I'd have to agree that in the current diplomatic crisis of America's making, there is literally nothing some Americans won't use to "justify" blaming it on Europe....
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.
> Interesting segue from claiming Europe is 20-40 years behind the US to claiming if Europe's policy choices have resulted in any better outcomes than the US its because they're enriching themselves by taking advantage of the "peace dividend"!
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.
Not really. Fixed-term contracts can not be used indefinitely. A worker must be permanently hired after the first extension. Agencies can not be used indefinitely, and also, the agency is required to support the employee after the client lets them go. So the company just pays to shift that responsibility but the responsibility towards the employee is there. A company is also not allowed to make an employee 'self-employed' by making them start their own company. They must always have multiple clients, if they have just one the government will consider it permanent employment with all strings attached and will apply all relevant restrictions and taxation retroactively.
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.
> 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.
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.
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.
> And no, wealth inequality is much higher in the US
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.
It really matters which state you look at. Wealth inequality, gdp per capita, and median wage are all better in several eu members than in the US, and that still holds if you factor in housing and cpi in general. There are other states where that is really not the case. Its mostly the Scandinavian countries outperforming the us on these metrics and they are relatively low population in comparison so its kind of an odd one to make. If the goal is total gdp, who cares about the median wage, then the us/china plan does make more sense, but neither of those plans work without the other existing and cooperating.
The EU has a borderline stagnant economy, couldn't defend itself from Russia, facing population collapse, totally whiffed on the tech scene explosion in the last 25 years, now also missing out on AI. European social obligations are expensive, yet nobody seems to really want to stress about creating new sources of wealth.
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 can defend ourselves, it's just that the US didn't want a too-powerful Europe until trump. In particular nuclear. They heavily pushed against that.
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.
We should definitely go all in on a perpetually growing population, what could possibly go wrong.
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.
This "greed" and lack of foresight underpins a lot of the welfare states of Europe. Many member states are doing nothing at all to account for this population shrinkage, much less plan for a world with less people.
Europe didn't want a too powerful Europe until Trump.
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.
No, but back then the US was a trusted partner. They wanted to provide military protection in return for geopolitical influence. Both are gone now of course.
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.
Refusal to learn and change, even if it means learning from people you disagree with, is simply arrogant and stupid. The US is the biggest economy in the world with the strongest tech sector in the world, they are obviously doing something right. And many personal accounts from people doing business in the EU in this thread show that the EU is doing at least some things wrong.
We don't care only about money. We're doing pretty great, we have some issues like housing cost but the US has those too. I'm happy with my life and I don't feel like there's something missing that having more money would fix. Less employment and welfare rights would cause a lot of worry and uncertainty though.
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.
> 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?
No, we still work. Just want some continuity. Not working for a company without direction chasing the latest fad and dumping everyone if it doesn't work out, but a good company with a decent business plan.
Is someone forcing you to work at a company chasing the latest fad?
You go and choose the type of company you want.
The keyword here being "Choice".
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.
You are thinking of the continuity of work, colleagues, and responsibilities. Those are of course good to have, especially from the perspective of the company.
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.
No, What i'm thinking is Having the option to choose Salary Stability or Salary Risk.
In that scenario if the employee is fired after just 2 years (worse case) because the project does not work, he is still financially better (compared to what he was getting at the "stable salary") even if it takes him 2 full years to find another job (something very unlikely if there is a dynamic employment market).
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)
You are free to choose opening a consultancy yourself and take on the salary risk as well as reap the rewards.
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.
I don't want to be an entrepreneur. And it doesn't have to be riskless. Just to have a good business (plan).
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.
> Companies exist to provide jobs. Not only to make money for the owner and externalise all the negative effects on society.
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.
Good thing then that there's a range of options between being let go immediately for no reason and companies being forced to employ bad employees for life.
Yes and that's basically what we have in most of Europe.
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.
In NL I guess that is similar to France; in our case we always started a binder on a new employee so after their trial period/temp contract, we continue collecting info. If that person just waited for the trial to be over to just do nothing, we go to the court with the binder and get them out. We stopped after a certain period depending on what we collected so far: most binders are empty anyway. Also, you can fire someone without that if you have economic cause (which should be the reason for firing someone good) or you can fire them without that by paying them some months in the future.
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).
AUstria (and especially Switzerland) has virtually at-will employment. No need to show anything to any court, just the notice period. Job security is virtually non existent.
There really is no reason for it to be longer, more expensive, and more complicated than what exists today in, say, the UK where you can do it all online for about £20 (or is it £50 now?) and complete in a matter of hours.
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.
Truly, this is one of the greatest losses of the UK leaving. For both parties. Advising EU startups on where to incorporate that isn’t London could be so much simpler.
If you have to setup a company today, and want the easiest path to EU-wide SaaS, probably Estonia is the way to go, very easy for EU citizens (don't know how the experience would be from outside, if it's even possible).
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).
Avoid Luxembourg like the plague unless you are a company like Amazon. And even them are making a massive mistake form a governance and risk management point of view of being based there. But they have their tax deal...
- 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.
Wow thanks for the long reply, unfortunately many if not most of your points are common in all of Europe. I asked you to clarify because I am not only curious about the topic but I strongly believe that these issues should be talked about way more frequently and reach when possible the general population.
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.
> 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.
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.
You don't need business plans and all that stuff. The problem in Germany for instance is that a GmbH needs 25k of capital + expensive notarization. These are the only two things that need improvement.
You can start an Unternehmergesellschaft (UG) within days with a template. However tax filing burdens will costs you around 2000€ baseline a year without having a single Euro of revenue let alone profit.
Came here to say the same. Founding a company in Germany is way to complicated and expensive... same for dismantling a company. I don't understand why you need a notary for everything.
Clear right? Because of notaries? They are powerful as everything official goes through them. They also do nothing usually; their underpaid underling presses a few buttons, enters a few names (often wrong the first time), prints and so on and then notary reads and signs. Money made. Luckily this has been changing a lot that some notaries smelled a rat coming and started to go for mass market, heavily undercutting all others for standard contracts; in some cities I have seen these type of places eating all the other ones. They are fast and cheap until you need custom stuff.
I agree on application costs to be less but I believe a company needs to bring some capital. In Switzerland you need to pony up 20k in startup capital for a GmbH or 100k for an AG (ignoring the 50k work around), it belongs to the company but guarantees some security for customers and vendors that you aren't just going to take their money and run.
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.
You can pony up however much money you want and show customers the founding document that says the amount the company was started with. I believe it's usually publically available even.
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.
>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.
"It is a mistake to optimise something that should not exist in the first place." - Elon Musk (apparently, although I would be astonished if Deming or Ohno hadn't said something similar)
In Europe, there are two parallel realities which coexist, have some influence over one another, but are ultimately somewhat separate.
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.
In the European countries (yes, plural) in which I have lived, _most_ (admittedly not all) employees would decline such a request as abusive and illegal, and employers which insisted would be on the hook for damages were they to insist.
You can start a business in Estonia in 2-3 days and get e-residency there. Sample incorporation business (no affiliation): https://enty.io/en/incorporate-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
Yeah, since there's lots of countries and some are very dynamic and modern, maybe they could act as early adopters. But don't stop there: if it works for the early adopters, others could also apply their lessons. For example Estonia is often mentioned in electronic government etc.
Those requirements should include "estimated setup & recurring administrative costs for businesses of size x to comply should be lower than y" in some way.
Dissolving an LLC is a in ideal case a multi month process. It's often easier and cheaper to just keep the LLC as zombie instead of trying to dissolve it.
> It's inordinately difficult and expensive to start an LLC or SA in some EU countries.
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.
All this "know your customer" stuff is fallout from 911. We in the US went bonkers as a result of 911 and what used to be tinfoil hat conspiracy thinking ended up becoming national policy.
As a reminder, KYC/AML is imposed by the USA on every other country in order to access the USD banking system, and the USA uses any excuse to cut off entities it doesn't like.
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?
My Dear German friends, please accept that EU-inc is a massive boost for EU competitiveness. Continuing to block progress here only proves that the EU is good at making promises on paper but fails to deliver real change.
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.
> This idea was made by French and German government
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.
> Reading this thread, I do not get Germany's worship of notaries and notarizations.
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.
What I find funny is that in Germany, you can only buy a house with a notary to prevent shady things (reasonable), but up until 2023, you could literally buy the entire thing with cash, without having to provide any proof of the origin of the funds.
The last time pan-European private companies (SPEs) were seriously proposed (2008) opposition from the German government blocked the proposals, the idea limped along until finally being ditched in 2014 after disputes in the European Parliament about worker representation on boards.
SPEs were supposed to follow on from SEs (public companies, introduced in 2004) and SCEs (cooperative societies, introduced in 2006).
National sovereignty is not national pride. Paying company taxes to the 28th regime evicts tax contributions to the company's home nation. Massive German tax money is already today used for non-national interests. EU-inc makes this only worse.
I don't understand the tax objection. The 28th regime changes corporate law, not fiscal law. A Berlin-based "EU-Inc" still pays full taxes (Körperschaftsteuer, Gewerbesteuer, etc.) to the local Finanzamt. It isn't a disembodied tax haven - it just standardizes the legal wrapper.
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.
This is wrong on so many levels. The German economy profits _a lot_ from the membership.
You can't just look at the monetary in/out flows to/from EU accounts but to the system as a whole.
For example, decades of pegging the value of the currency down, thus facilitating exports on a massive scale and thus pushing up the performance of whole industries, without other member states that would have had their currency devaluated being able to compete on prize.
They probably didn't list any because estimating the upsides versus the downsides is what it's about, and that's very hard to quantify. Suggesting, like you seem to, that there are no upsides to the German economy whatsoever, is just not a serious argument so doesn't actually deserve a serious answer.
I agree with your characterisation of what is going on, and at some point, the EU states will have to decide for full fiscal integration or for removing the common currency. You can't have a common currency without a common fiscal union. So we either have to integrate more or desintegrate more, this inbetween we have now is not working very well. Speaking as a European, not sure what is better.
Not related to the comment, but in general I agree with you.
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.
Even more centralized than the USA? That must be an outsider's view. You are aware that each state has its own tax laws? Corporate laws? Even criminal laws and traffic laws? And so on? Obviously there is federal law, too, but that's more of an umbrella covering all states in addition to local laws. The USA is a federation, just like Germany, Switzerland, or Austria are federations, and one common complaint you get out of these nations all the time is that they are not centralized enough!
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.
I recently became much more pro-total-unification, so let me give you this counterpoint: individually, European nations are no match to the major superpowers, neither economically nor militarily. We'll get gutted by divide-and-conquer approach. In contrast, bound much closer together (particularly with some form of pan-european armed forces), the EU would become a proper global superpower and a counterbalance for the USA and China.
There is not a single example of a multiethnic or culturally diverse empire or state that was successful after the rise of nation-states at the end of the 19th century.
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.
You cant really believe any of the EU countries actually want to work together? The EU was only possible with the premise of countries keeping their autonomy. Believe me when I say that us Germans would rather go to war than merge with France, just as an example.
>> - 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.
That's the same fallacy as claiming that rich people save money by donating to charity.
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.
This calculation is flawed. German state collects much more than 5€, because there is VAT etc and, of course, employees of that company pay income tax from their share of that 100€ they just got back.
What people like you dont understand is what we get back from investing into foreign countries. We dont just build bicycle lanes there because we are such nice people.
This can happen without putting the most part of intensive payload in a form of external dependencies that can be cut at any point by many factors, while losing all the skills and knowledge on how to effectively plant and harvest. Qualified farmers don’t appear magically over night, let alone people with the passion required to invest their own life into it.
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?
I've asked before - I am not clear what the massive boost is other than saving a few days or weeks at the beginning. I believe all taxation, labor compliance and other such regulation is still the same as the status quo. The one time ease of setup doesn't seem to be worth the ongoing hassle of dealing with the same crap, just with the added friction of a new and unfamiliar entity structure. What am I missing?
Its important to understand the context. Germany, and Europe in general, is basically like a falling empire. It will be less and less significant and life won't get any better than it is relatively speaking. The same will almost certainly happen with the US, but first goes Europe.
Unfortunately citizens and therefore ruling elites of empires fueled by relatively extremely high standard of living for decades in comparison to the rest of the World always have very hard time swallowing their national pride. They have built very elaborate conceptual framework of linking their nationality to the level of relative success, fueled by politicians who want to make people feel good again about their nationality.
Just look at the news, almost everything directly or indirectly is linked to the concept "nation".
And in almost all cases of empires a natural consequence of their fall is war. So, it is very important to set expectations right.
Are you foretelling the dissolution of the British Empire which happened many decades ago? Are you saying Algeria will soon be free of French colonial rule? Is your middle name Nostradamus?
It isn't prophecy. The Harvard Belfer Center study (Thucydides's Trap) analyzed 16 cases in the last 500 years where a rising power challenged a ruling empire: 12 of them ended in war.
The UK is actually the perfect example of this danger. The British Empire didn't dissolve peacefully - it was effectively destroyed by WWI and WWII while trying to suppress a rising Germany.
The subsequent transfer of hegemony to the US was a rare statistical anomaly (a "special case" driven by shared culture and total British exhaustion), but the Empire’s fall itself was catastrophic.
The pattern is violence, not peace. And remember that other aspiring nations to maintain it's position as Empire actively acting to destabilize situation in other states. The reason is simple - it is easiest way to maintain their status.
Brexit for instance was a boon for everybody but UK and EU. There is clear data already about Russian intervention. Recent overt US intervention into ensuring UK remaining separate and EU becoming separate. Think about it.
Sure, but my point is that all that is in the past. The British Empire already fell, and so did all the other European colonial powers. These days, when I think of empire, countries like the US, China or Russia fit the bill much more than the EU, which is struggling to reach that level of integration and influence.
> These days, when I think of empire, countries like the US, China or Russia fit the bill much more than the EU, which is struggling to reach that level of integration and influence.
Of course! Especially because there is no unified army control.
But this requires giving more context. We can't forget that there are ways, especially ways made by empires, to force other nations to go to war not only as an ally but also to make them less relevant and take a hit also.
One of the main factors which makes this more probable, is what op mentioned, the raise of fascism and combatant militaristic attitudes exacerbated by the fact that their own nation / empire is a falling empire. And EU didn't fell yet, it is huge economy with more people than the US.
As a Dutch person I never understood this push until someone told me (and this is true in 2026!!!) that if you open a LLC (Gmbh?) in Germany you have to physically go to the notary and have a person READ OUT all the statutes to you.
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.
This is true of all contract notarization in Germany (even when buying a house, jesus that is a slog), and although it is a bendy-banana level silly thing that people focus on, isn't actually the biggest problem in company founding here. MUCH more problematic is unfavorable tax rules making equity compensation difficult, capital requirements, legal/notary fees, and an investor class that is notoriously skittish.
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.
This here is the problem for most of EU countries.
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..
These trade unions are notorious for that. I worked as a labor legal advisor and especially the unions for temporary employment agency start 'barking' and demand loads of money (even from years back). Sometimes it's not even clear which union is applicable.
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.
Yeah our case was strange because we develop chips and design software related to it. Belastingdienst categorized us wrongly as metalelektro, and we got this guys (Cometec) within two weeks of that. In the meantime we have applied this sector assignment to be corrected, which eventually happened while we were getting threatened into bankruptcy by these guys.
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.
Yeah, that stuff can be scary, I understand. It might almost feel extortionate. You had labor lawyers look at the applicable CAO and pension rules?
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?
> The Netherlands does not want entrepreneurs, they want everybody cozy at their jobs at some big company.
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.
Individuals pay like 25-30 Euronth contribution, which is tax deductible. Employers can pay a lot, like 10% or more, which is often going to a social security fund.
That's crazy. Notarization in Estonia can be done entirely online using a digital signature, just like everything else here is done (including voting, getting married, getting divorced, filing taxes, opening/closing a company, etc). From all I hear Germany is still stuck in the 90s for some reason.
More like no one is willing to stick their neck out politically to argue for the positive public policy changes, or challenge regulatory interpretation needed to make real change. Plenty of people see the problems, and even want to fix them, and get stymied by political processes that abhor actually having to argue for change to electorate.
Germany is incredibly under developed in the digitalization plus the amount of red tape to do even basic things is also very large as well. Getting rid of these things takes a lot of will power and at the moment there is very little.
Germany never thought it would be in the current situation - decaying health care, pension system, cornerstone industry in decline, lack of digitalization, the list goes on. Massive reforms are needed, action is needed, but there is too much inertia in the system to change anything quickly.
Smaller countries like Estonia have the ability to be much more nimble.
Fun fact, the Bundestag is one of the most representative parliaments in the world thanks to MMP. Is the executive dysfunctional? Is it the federal split into 16 tiny states causing this?
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?
Yes somehow they believed the 90s continue despite zero public investment. They talk about the dangers of debt for future generations, but they are silent about the infrastructure debt they are saddling their children with by not investing on any serious scale.
Lots of systems are stuck in very old ways of working and using humans as cogs. My American utility bill has a typo in my name that is not there in the online system through which I opened my account; a human in a back office read text from one app and typed it into another. Maybe there was even a piece of paper involved.
I agree. The notary process is a bit annoying, but it only costs 500-1,000 euros. Yes, that's not ideal, but if you're building a proper business, that shouldn't be an issue. You can typically get an appointment within a week, no matter where you are or where your company is registered. However, once the notary sends your documents off, it can take days or weeks for the registry courts to handle them. You have to register with ten other places yourselves, and there's no guidance. There are different forms and requirements, and the yearly costs just for a basic tax declaration are in the thousands. They can be 5-10% of early startup expenses for no good reason.
There are also some shady setups, such as a private company handling the company registry for the state. You have to pay this company each year to publish your books. Accessing that data still costs money, except for the largest companies. It doesn't help with transparency, but it is a public-private rent-seeking nightmare that (possibly) arose due to conflicts of interest among certain politicians (the company's CEO has a higher-level position in political party) and lobbying.
I founded a UG and a GmbH in 2024. It took me 3 months total including visits to the notary (who charges a non-insignificant sum for their services).
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.
The bank issues/refusals may have something to do with FATCA. If you have anything to do with the US in terms of taxes, many EU banks don’t want you as their customer. If it’s a subsidiary of a foreign company, then a lot of paperwork is required to prove that the foreign owners actually exist.
With experience and optimal prerequisites (good connections to a notary, single founder with default bylaws and no asset transfer into the company) you can do it in ~4 days, e.g. for a holding company.
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 never understood why people focus on this "reading aloud" so much.
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")
What does reading it aloud make a difference to you reading it yourself? You can still claim that they misspoke or had an accent and you misheard or any of a dozen other excuses.
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.
> Personally I would not create "EU-INC" but just make all local entities legal in every country.
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.
I'm surprised that Germany never relaxed the in-person notarization requirements during COVID. A lot of jurisdictions around the world did change their rules to allow remote notarization.
Interesting, thanks! Apparently it requires a German eID-enabled ID card (or compatible EU ID) and doesn't include transactions involving real estate, but still it's progress.
All of the heavy BV requirements changed in 2012. You can now start a BV very quickly, if you want you can do it online, and without any minimum capital requirement.
If only it were that. You have to put up 25000€ in capital and pay absurd amount of fees to the notary for essentially being a text to speech translator.
The minimum capital requirement is the whole point of a GmbH. If you don't want it, you can found a UG, which is the same thing with no capital requirement.
Trustworthiness. You know a GmbH has at least 25000€ you can sue them for. And a UG has to put parts of their profits into becoming a GmbH, so eventually everyone big enough is a GmbH.
> 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.
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.
Yes please! I tripped over this recently. It's a bigger deal than it might seem.
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.
> 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 :)
Finally something that feel like removing some borders. On the long term it could bring a lot of positives changes, even breaking or displacing nationalism.
And here I am picturing what could look like the new European far right and far left...
What issue? VAT is paid by the user (collected and remitted by you) and differs by country (used to be hassle, easy today), but the taxes you pay in your country for your company is the same regardless of where the users who paid you are based (assuming there isn't something country-specific about that), it's more about where your company is tax-resident.
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.
Yes the issue is i form company in Estonia because i like their non distribution taxes. Or in czechia because i live there. Then move to spain. And they decide to tax the company in spain… with high taxes.
I mean if you now live in Spain, then you need to pay taxes in Spain, because that's where you live. This makes sense, does it not? Or is the expectation that you shouldn't pay taxes where you live, only where your company that you work for/in is based?
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 :)
I think they mean that the Estonian company they run now has to file tax returns and pay taxes not only to Estonia but also Spain.
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!
Indeed, the current state of affairs is rather sad.
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, but some companies need employees on paper. When they do custom based software and want to apply for a job, there is often a number of heads you need to employ.
Yeah, you should pay taxes from where the company is run. Basically if you have one person company. In a place it “does” business. But i want estonian company for the ease of doing business and for to hold profit, for reinvestment later. I dont want to deal with spanish/german authorities if i move around and want to grow business. No government competition is what they want. Because they cant win in square fight.
> the Estonian company they run now has to file tax returns and pay taxes not only to Estonia but also Spain.
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.
> As long as I don't get taxed on the same money in both countries, 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.
The Estonian company pays the Spanish resident money to them personally. Indeed it is normal that the Spanish resident has to deal with the Spanish taxes on this money only.
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.
> 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.
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?
For labour - the laws of where that labour is actually being conducted are the ones that are followed. Spanish prosecutors can for sure bring a case against an Estonian company if they are not. In theory at least.
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?
> where that labour is actually being conducted are the ones that are followed.
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.
> So in that particular case, would be in both Estonia and Spain, just so we're on the same side?
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.
I really looking forward to this! I love being in the EU and I really like living in Germany. But creating and operating a small company in Germany is a nightmare, I hope this can give smaller EU companies agility and frictionless setup and operation so they can focus on building products and providing services to their customers.
Sounds like a German problem. When I last set up a company in Sweden I literally went to web UI and clicked "Create Company" basically, filled in some details and it was done. Similar experience in Spain, fill out 2-3 forms and it's done. How much more process could the German government really add here? Reviews and interviews, or what exactly is the bureaucracy you're complaining about here?
It takes 8 weeks from start to finish to be able to get paid for your first sale as a German limited liability company.
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.
You can bill, but the company owners are completely liable until the process is completed. Then the liability goes over to the company. Quite the risk if you ask me.
As soon as you talk to a notary to prove that you're really opening a company you can get the provisional business license, or whatever they call it, to open a bank account. After you open that bank account you need to talk to the notary again to start registering the real company. Then you need to transfer the bank account from the place holder company to the real company.
I may be misremembering the exact steps because I tried drilling all those memories out of my head as soon as I left Germany.
That's great to know! In Germany it involves a lot of physical paperwork, going to a notary to certify the creation, taxes are a nightmare, every change you need to make again you need a notary. It's so frustrating!
> Similar experience in Spain, fill out 2-3 forms and it's done.
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).
Company formation in Germany requires identity and statute checks by a notary. You can nowadays do that remotely via video appointment but it’s still a bit of a hassle and delay. It’s not as bad as people claim, or rather: if people already have difficulties with that step I wonder how much fun they will have with “bureaucracy” later on.
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.
Friction is a death by 1000 cuts. Its a week here, an in person appointment there, another 2 weeks to send in a different ID - all of that adds up to an environment where people are reluctant to do anything new.
I have personally founded multiple successful German companies and non-profits, and have advised dozens in doing so, and yeah I really don’t mind if those that are reluctant because of one appointment to not start whatever grand business idea they might have, and doubt that they will make it elsewhere. Not everyone with (maybe) good ideas is made to run a business.
Unfortunately it's likely that Germany will reject this change. Incorporation in Germany is highly bureaucratic and it requires physical notarisation. Its not a mistake, Germany has an incredibly powerful notary lobby that has already announced its opposition to this.
> creating and operating a small company in Germany is a nightmare
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.
Can you elaborate more? I am self employed electrician in Bavaria using simple Gewerbe. It is straightforward at the beginning. Literally hundreds of webpages describe the procedure. It is obvious, that growing the company into GmbH with own VAT number increases the complexity. But I haven’t seen it other way in Europe.
I had my experience with bootstrapping a self founded UG (Unternehmergesellschaft), and the process was long (about 8 weeks), involving me getting support from a company (firma.de) to help me prepare all the documentation which involved a lot of physical paperwork, then there's the visit to the notary which is required. After you do that, you need to register with the Finanzamt, and then you start finding out about all this other registries you need to pay and register to, or that you're automatically registered, but you receive separate invoices.
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 :(
The question is always the same: do you really need UG/GmbH at the beginning? It’s typical rookie mistake. I did it too, sold the company for 1€ to some shady people at the end. Gewerbe with 40000€ in the company’s account does not have the problems anymore. And the expensive tax consultants are just another cost of doing business in Germany. Ok, the quality of Finanzamt clerks varies heavily depending on location. Current town has nice ones.
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.
Agreed. In case you do not have big investors, just register as an individual entrepreneur, get a bank account and get going! It can be turned into a LLC/GmbH later if business goes well.
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?
It's a good price because the yearly statements for an LLC/GmbH are costly. We pay about 200/mo for accounting - with some more invoices :) -, 100/mo for payrolls but also the yearly statement alone is more than 2k. You can save that by not having an LLC - I personally think the risk in many software businesses is quite low. And some risks must be accepted as an entrepreneur...
Maybe I should have taken another road considering the size of my operations, unfortunately I was wrongly advised when starting up, I spent 1k with a Steuerberatung for advice on what was the proper structure for me, and still… I think they just adviced me the option that was gonna cost me the most to operate.
I visited many lectures about business at the university, participated at Munich business plan competitions and all the time holding structure GmbH owning other GmbH was the best solution. The reality is that this is best solution for medium enterprises, for the bootstrapped start it does not matter. If I can’t take off as crappy Gewerbe the expensive holding will not help me either. Learning was not free.
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.
Some tax consultants are very shady, and some are really arrogant. I'm currently looking for one as we had some disagreements on pricing with my previous one, and many won't even take me due to my volume, or maybe because I ask to speak English, idk...
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.
> I had my experience with bootstrapping a self founded UG (Unternehmergesellschaft), and the process was long (about 8 weeks)
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.
But that’s the thing, even though it took weeks I spent a non insignificant amount of euros to set it up, I think it was nearly 2k at the end; and to make it quick would probably be another K or so?
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.
In the UK, it took me half an hour and 30£ to open a Ltd, which I think is the equivalent of a GmbH.
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.
In Germany you also have the UG which is like a small GmbH, with 1 eur minimum capital requirement, that is if you like like the 1k (and up to 2k) it cost to set up.
Yeah, I think there is some confusion in this thread. eu-inc.org isn't an official source or anything, though von der Leyen did say "EU Inc" in her speech at Davos. The European Parliament specifically mentioned not liking "incorporated" because it was American terminology preferring "Societas Europaea Unificata" instead which is pretty funny.
Reminds me of all the official sounding websites with short domain names purporting to explain the purpose and mechanisms of the GDPR, which were almost all operated by advertising companies or industry groups representing them.
> The ultimate aim is to create a new truly European company structure. We call it EU Inc., with a single and simple set of rules that will apply seamlessly all over our Union. So that business can operate across Member States much more easily. Our entrepreneurs, the innovative companies, will be able to register a company in any Member State within 48 hours – fully online. They will enjoy the same capital regime all across the EU. Ultimately, we need a system where companies can do business and raise financing seamlessly across Europe – just as easily as in uniform markets like the US or China. If we get this right – and if we move fast enough – this will not only help EU companies grow. But it will attract investment from across the world.
> 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.
As a Swede the third one is terrifying, unifying the energy market has been catastrophic for us, both price and environment wise.
The latest is added taxes due to choke points designed by EU from the first place..
As a Swede(working in the energy sector no less), Sweden has only themselves to blame for their catastrophic decisions, like killing a world leading nuclear industry. Don’t blame Germany for Swedens incredibly stupid decision to shut down functioning nuclear reactors prematurely.
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.
It's the Euro all over again, mostly because of this:
> 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?
Well it didn’t work for the Euro, and that didn’t require building massive on demand infrastructure that degrades over distance.
Socialism for people only work within the confines of a society, 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.
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.
Equal in that hey suffer together? When even the SEK outperforms the EUR in times of distress you know it’s incredibly bad. Is it better that all of Europe sinks, maybe, but I’m happy I’m not losing my job because of pension plans in France or financial neglect in Greece, and I’m sure they would say the same if roles were reversed. And to be clear, it’s not about the people, but how governing is done.
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).
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.
I may tell from Polish perspective - loosely speaking: Germany and Austria used to share single bidding zone: electricity was produced by wind at the north and then consumed by factories at the south. The problem: no sufficient grid connection - Polish and Czech grids were used instead, what caused major problems - loop flows. It lasted from 2001 to 2018.
Unification needs to be real, including grids, not on paper only.
Sweden has plenty of cheap hydropower. But as prices are now tied to countries like Germany which made catastrophic decisions around energy, Swedes have to pay much more than if Sweden had an independent energy market.
Presumably because Sweden is selling some of that cheap power to Germany.
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.
That has nothing to do with the EU, it's just capitalism. Even if the EU wouldn't exist, the energy companies would have found a way to sell the cheap Swedish hydropower to Germany.
In that case it sounds like "unification was bad" is an unfair characterization. Unification was bad by proxy, due to the bad decisions of Germany. If Germany had made better decisions, unification would've been good as Sweden would've had lower prices on a larger market.
”Bad or good by proxy” is how all policy plays out though, your ideas mean nothing if reality says otherwise. And Germany going coal was well known by time of unification (one might think it was because of that, tinfoil hat on).
Having to pay more because of Germany going fossil fuel like crazy. When there’s no wind and it’s dark they cause most of EU to suffer since the cost of their coal plants are so high.
We also send a lot of green energy out of the country only to import coal powered from Denmark (not as major, mostly happens due to high consumptions)
And we’re also getting a price spike fee, don’t dare to put on the dish washer when your neighbor is!
All this in a country where electricity was almost free (to be fair, our dismantling of nuclear doesn’t help here)
Energy is expensive because burning fossil fuels is expensive due to taxes. A coal power plant pays around two times more for emissions than for the coal itself. They're trying to solve a problem which they have created themselves in the first place.
So you suggestion is to remove the taxes and go back to mostly using coal for power? Or what's the suggestion here? Because those taxes are there because of the pollution, so unless you have better way of getting rid of the pollution yet using coal for power, I'm not sure there is something better than trying to tax it away so other source can be focused by business and industry instead.
that is simply untrue. China, for as bad as it has historically been in terms of environment, it has invested waaaay more than anybody else in clean energy [1]. It's a game we are all in together and things are moving forward, albeit too slowly.
That is good, because it is a lie that others are not following.
People love to point to China for their emissions, completely avoiding that China, as the workbench of the world, essentially is burdened with the emissions of the world.
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
It does matter to follow through with your values though. Humanity isn't supposed to be just minmaxing economical output, a common set of values that we strive for is much more inspiring than burning everything to the ground, and leaving a world of ashes for future generations to capture maximum economical output right now.
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.
If Europe cooperates and the RoW cooperates, nobody gains a relative economic advantage and our world doesn't burn.
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.
Indeed, but if everyone starts thinking "No one else is lowering their emissions so why would I?", how are we supposed to ever make any sort of progress?
Someone doing something is always better than no one doing anything, can we at least agree on that?
Fair point, I agree, that isn't obvious. What is obvious to both of us (I assume?) is that pollution has to be lower, not just in the EU, but across the world. But we (Europeans) can mostly just influence what happens inside of Europe, EU and our countries. Hence, we do what we can to reduce it, where taxing it is one approach.
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 :)
> But it is by no means obvious that carbon taxes are the right path.
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.
Energy is expensive because fossil fuels are destroying the only planet we have.
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"...
Europe is energy poor. We will never be able to compete on raw cost with the US, China and similar.
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.
That is a dubious claim of the accounting chain for expense of fossil fuels, which also ignores defensive tariffs for energy sources like Chines manufactured solar, wind and batteries. Though maybe it speaks to more beaucratic process around the energy not the core energy costs itself.
Unfortunately this does not override employment and tax laws - so you still cannot hire someone as an FTE in Paris, from a startup in Berlin for example (without them being a freelancer, or you opening a payroll / tax office in France).
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.
Deel is one of the reasons why my policy for working for foreign companies is "B2B or I'm fucking off". Everyone I know (employees/contractors using it, not the other side) who went for it hated and regretted it.
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.
How certain are you of this? I only have anecdata, but when I tried to use a 3rd party agency to hire someone in France, from Ireland I got the process through several layers of management, up to and including the CEO and COO of my American employer, and HR, and legal counsel, only to be warned away in the most emphatic terms by external counsel. They told us of the risk of large fines and jail time in France for executives of companies doing this.
I’m from Croatia, and starting and running a company here is expensive. Estonia makes it much easier, so you might think: why not open a company in Estonia?
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.
Estonian fiscal law doesn’t apply if your company operates from Croatia. The only reason you can’t do this in practice is because you’ll have a hard time finding a Croatian accountant willing to work with your Estonian company. That’s something EU-inc aims to address.
EU like making new regulation.
There are simpler steps to make doing business here easier:
-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.
This submission originally did link to https://ec.europa.eu/commission/presscorner/detail/da/speech..., but was later changed to this. Or two submissions (one for each URL) was linked/merged. But something used to link to the press release rather than this website, FWIW.
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.
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?
How can you maintain the rest of your argument when the entire basis for said argument been proven wrong? It's not "profiting from an ongoing news story" when they literally created what this news story is about!
That's not someone profiting from the news story. It's the website of the group of people who were pushing that, talking to the EU and lobbying for it for a while.
This is a great initiative that I've been following, but the stumbling block is still 'local taxes [and employment]' - that's still 27 different tax codes to deal with, submitting returns to in 27 different languages.
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 think it should be stupid simple to create a small company, Sorry, "stupid" is important here, anything lesser would not convey the meaning against the EU background. Something like a proof of identity, a one sheet stating the structure of the company (a sole proprietorship or a small LLC with limited funds and employees), the nature of the business (e.g. "software development"), and a moderate processing fee. The process should be serving a notification, not obtaining a permission.
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.
I always heard that the issue with startup investment in Europe was the general lack of capital investors willing to take Hail Mary risks on founders with a wild idea and maybe little experience. The market is far too risk-averse for a grassroots early-stage startup scene.
How would this organization address that fundamental psychological block?
> How would this organization address that fundamental psychological block?
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.
How is that in the US right now though? Years ago there was a wacky startup of the week on HN raising X amount of funds, nowadays it feels like there's... nothing. Or it's just underreported on HN. Or the billions that funded a hundred startups have all gone down the AI drain.
I acted as a technical advisor on a raise in Q2 2025 and saw figures from the EI Market Research Centre that Q1 Series As & Bs totalled ~$35 BN USD vs ~€4.5 for the EU as a bloc, so very roughly an order of magnitude greater. 2025 was considered a mid year for US VC capital deployment but a good year for the EU.
this is not the only blocker for European startup success. We need to address each blocker separately.
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.
> The market is far too risk-averse for a grassroots early-stage startup scene.
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".
The US continues to produce "most valuable companies" by the absolute non-sensical value called "market share" and "market capitalization".
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)
UK founder here in cybersecurity. I’ve bootstrapped and exited twice.
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.
"proper" probably means backed by a member state, founder is a former gov worker, product is being co-developed by a local university, is based on academic research, founding team has PhDs and has 15 large enterprise customers lined up
I think a big issue is that Europeans who want to invest in early stage VC do so in the States, because everything is geared towards entrepreneurial success there. Changing the business environment across the EU is necessary but definitely not sufficient to kick start the VC-backed startup scene in the EU.
> big issue is that Europeans who want to invest in early stage VC do so in the States
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.
> This seems like a tautology - the VCs you've worked with in Europe invest in Europe.
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?
> 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?
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.
> because the capital deployment from EU HNW is overwhelming deployed outside the bloc, largely in the US.
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.
As politely as possible, your experience is simply wrong, I'm afraid to say. US angel/seed round investing by EU-resident HNWs alone exceeds all angel/seed investing in the EU, by quite some margin.
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.
I think the big issue is that this is what Americans want to believe because it reinforces their exceptionalism. And of course there are Europeans who would choose to believe it because it absolves them of failure.
The incentives change once you get access to the entire EU market, either diminishing the risk or increasing the attractiveness of the the market to the point of that risk becoming acceptable
I don't think the VC-based start-up system with pure profit in mind and an exit at some point and then who-cares-about-the-product is something I want to see more of.
It wouldn't. I read this as "we gotta try something" but let's be honest, no amount of work on incorporation rules or employee options schemes or whatever they make up next, is going to meaningfully change the culture and attitude of European capital markets.
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.
It's not going to change overnight, no. But it's an important step.
"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.
People are completely overreacting how much regulation there is in Europe here. There is more regulations against monopolies and USA BigTech is always crying about that and spreading propaganda about that. But starting a startup is way cheaper in Europe you won't need funding like in the USA even.
It's pretty funny. Europeans get so angry at US people claiming to have seen "Europe" when they've been in London, Paris and Rome, and yet they (we) do the same thing on lots of other topics.
Then why do you think virtually all of the most successful tech startups are U.S. companies? (Excluding Asia, for the purposes of this discussion.) Is it just Silicon Valley network effects?
OK, but how is this going to be taxed? That's where the problem is. Maybe it will be cheaper to incorporate but then what, are individual countries going to lose on their expected taxes?
This would help a lot. Many European startups are strongly local (also in talent search), because while moving is simple, share distribution and ownership structures are anything but, and investors usually don't want to bother with local regulation on that they don't even know.
> On Saturday, I was in Asunción, in Paraguay, to sign the EU-Mercosur trade agreement. It was a breakthrough after 25 years of negotiations. And with it, the EU and Latin America have created the largest free trade zone in the world. A market worth over 20% of global GDP. 31 countries with over 700 million consumers. Aligned with the Paris Agreement. This agreement sends a powerful message to the world. That we are choosing fair trade over tariffs.
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.
> 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 issue is this sends a negative message to Mercosur member states like Brazil, who are actively being wooed by the US such as by creating a US-Brazil Rare Earths Deal [0] and wooing Brazilian oligarch Batista brothers [1] (the oligarchs who owns much of Brazil's and North+South American agricultural capacity [2] and are the power behind the throne in Brazil) to get near-exclusive rights on distributing Venezuelan oil [3].
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.
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.
Er, what exactly is this? It's not mentioned anywhere for laypeople like me. Perhaps they should focus on explaining what this project is, before asking for people to spread awareness. How can you spread awareness about something you don't even know what it is?
I agree. It looks very unprofessional. No contact adress. No representative person. No explanation of the acronym "EU-INC". Big buzzwords, visions, clichés and self congratulation.
Which isn't to say that "making commerce cheaper in Europe" isn't a worthwhile goal, it is- but at face value this attempt looks comically inept. "We wrote an email to a politician! Progress due any moment! Like and share!"
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".
Thanks, but from a quick glance I couldn't find it on the homepage. Also, it's a Notion document, they could instead just write all of these points on their landing page?
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.
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”.
I would like to see the details on this. The EU has alredy jurisdictions that make it "too easy" to run a company and others that make it exceedingly difficult, and the two are in competition. It's one thing to start a company in cyprus, another to start in Germany.
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'd also like to see the details, it seems to be a difficult undertaking but something the EU really needs. As an example, when I incorporate a company outside of Portugal then the tax authority can classify it as a CFC (controlled foreign company) and tax it very high, and it can lead to double taxation. AFAIK, the rules are quite complex. A EU-wide registry should prevent that, but that might require a EU-wide harmonization of 27 tax systems (plus potential associated countries like Switzerland and the UK).
Wow, I was writing about something like having an easy way to create EU legal entity (all be it from India) on a different thread.
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?
Seems like a broader version of what Estonia are already doing with e-residency[1]. Registering a company online in a few hours is already easy in a few jurisdictions around the world (e.g: the U.K.[2]) so this isn’t a particularly revolutionary but the intent it signals is good.
> 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?
There's a reason I rarely see local subsidiaries of cool small companies from other EU countries - it's too complicated to open them, have a couple of local employees on a payroll, handle notarization, translations of documents, not to mention labor laws etc.
The bottleneck is having a standardized SAFE for Europe. Global investors must be able to invest without having to understand Italian and Polish corporate law
That's a different thing all together, but a good point nonetheless. Always been dealing with local investors when building startups, because of that.
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?
Glad to finally see 28th getting more traction, I was thinking about it just the other day. Personally, I'd love for EU to introduce more institutions that cut at member state sovereignty in favor of tighter integration. What comes to mind immediately is a 28th regime for employment and personal taxes, so companies don't have to resort to workarounds like employee of record or fake "contractors". It seems that EU late binds making big decisions until all options collapse, current events will probably result in more push for federalization overall.
> with a single and simple set of rules that will apply seamlessly all over our Union
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.
> 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.
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.
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.
Remember the attempted EU constitution? They discovered at that point that looking too much like a government made the nationalists _very_ upset, so it was recast as the Lisbon treaty (not a constitution, we promise!). A lot of the can't-believe-it's-not-a-government stuff stems from that debacle.
The integrated taxes would be a very big step for the EEA, so would common company law and governance for these entities.
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 headline statements say “… EU-level …” rather than European, unless the smaller print explicitly mentions non-EU countries such as the UK I would assume that we aren't included.
It is pretty common, when discussing matters of law and business - not geography, to read "Europe" as "the union of Europe" and not "the continent of Europe".
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.
I think you can see from this thread that there is a lot more ambiguity when talking of "Europe", and also pushback against using "Europe" to mean "EU". It's not obvious, that's why I asked the question. I'm not stupid but just living in a different context to you, apparently, and have reasons to push back against this misuse of the word "European".
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 agree that it's "misuse". it's a use, a common use. No pushback is called for. You asked a question about the title that was answered in the title - "EU–INC" means "EU" in this case. It's clear from context, and if that fails from the article. Others have said the same.
I don't "live in that context", I'm aware of it can can use it when appropriate.
>The ultimate aim is to create a new truly European company structure. We call it EU Inc., with a single and simple set of rules that will apply seamlessly all over our Union.
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.
I read through the speech, I'm still not sure if this is adopted or not. I found https://www.eu-inc.org/ which seems to be the origin of the proposal, but mentions a final implementation for 2027.
Just heard about this initiative as a European, I don't have an opinion yet.
> 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.
The SE has a minimum capital requirement of 120k € so is not within reach for most people. I think this EU-Inc would be a simple structure with a lower threshold.
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.
Per the Wikipedia article, an SE cannot be incorporated directly. It must be created out of one or more national, public (!) companies already formed under the law of a member state.
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 think your partners were mistaken - the requirement for having a company seal and paper company register / minute book went away in both England & Wales and Scotland with the Companies Act 1985, and company formation has been done online UK-wide since the Companies Act 2006.
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.
This is good, but don't think it will change much. The EU suffers from bureaucracy and disparate rules for each country, which is a pain in the ass for startups, it really needs unification on taxes, and less rules.
> Current EU company structures like the European Company (SE) are made for public companies and ill-suited for startups due to high capital requirements, complex formation processes, and heavy administrative burdens. A flexible, tailored EU-wide entity for startups will solve these issues.
This doesn't solve any issue. Registering a company is already usually pretty simple in most European countries. It's running the company which is difficult due to regulations and stuff.
It was pretty complicated in the Netherlands. I had to pay a few thousand Euro to a notary and do a lot of paperwork. I've heard its worse in Germany.
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.
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.
Thx. Am I taxable in my country of residence even when the money is kept on the LLC's bank account in the US?
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).
I'm not a tax advisor and most of my knowledge is about Germany, but if you have no physical business in the US, like office and proper residency (decision-making process), you have to tax in your own country. Tax evasion would be easy if that would not be the case. It's not only about profits but even the expenses need to be taxed/settled under e.g. German law.
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.
I would love to be able to setup in Europe a non-profit equivalent to the Zig Software Foundation.
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 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.
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.
Sure we have non profit companies also in Europe, the question if it's possible to create one to support an Open Source project, and which tax benefits donors can get.
My experience with the US tax system is that you need to get approval to get non-profit status, and more in general I do think this has something to do with the price of eggs in the sense that you should obviously be prevented from being able to setup a non-profit company if what you're doing has nothing charitable about it.
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.
> My experience with the US tax system is that you need to get approval to get non-profit status,
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.
> EU's strength is in diversity, and von der Leyen is set on killing that.
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.
IMO Europe will lose its soul if it tries to be too competitive. Once it becomes too easy to start a business or raise capital, it becomes easy to spiral into workaholism. Gone will be the days of month long holidays and leisurely pace.
The way I check for duplicates is to just try to submit it. If it's a duplicate, it'll count as an upvote to the existing one, otherwise I end up submitting it, it's a win-win :)
Germany is your problem. If you’re open to looking outside Germany, there are many options. You can open a U.K. company same day, an Estonian company with e-residency in a couple of days. Germany is uniquely nightmarish.
The problem isn’t incorporation - it’s having accountants in your jurisdiction familiar with the structure. You can incorporate in the UK for £50 instantly but you might have trouble finding an accountant in Italy that is willing to sort your accounts out.
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.
So if it is a european legal entity why they host it on .org which is only controlled by USA instead of using a .eu domain which is a ccTLD controlled by European Union?
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.
This is exactly how its going to go. But the reason is not lazy bureaucrats but that a lot of countries fear they will lose out on taxes from corporations currently domiciled in their country. Of course another big source of friction is different labour laws in different countries. And there's no way these are going to be touched. And of course banks will also oppose the unified capital market because they fear losing fees from their domestic customers to better banks in other countries.
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.
Of all the challenges you face as a startup, the legal entity you choose is possibly the least consequential. 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.
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!
> investors understand how the legals work (Delaware C-corp, UK Ltd is OK too)
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.
And yet I'm not seeing an awful lot of advantage of registering in the EU then if this campaign has to exist - clearly there's a big enough friction to registering / running a company within the EU itself.
> Of all the challenges you face as a startup, the legal entity you choose is possibly the least consequential.
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.
This is a EU initiative. Confusingly, EU is often called Europe in spoken/non-official speech. Sort of the same way it is said that Washington does something, when it is the US gov doing something.
You also need portability. As I understand it there's no problem with having a Delaware corp but all your staff and operations being in California, for example. I do not believe this is the case all across the EU! And some localities can have quite onerous formation requirements for no good reason (anything involving notaries, for example - 19th century solution to 19th century problems).
I started a limited company in Spain about 15 years ago. Just the 48h online is huge. It took maybe 15-20 days and visits to the notary, etc. (notaries are usually not available next day, for example). I think Estonia and UK have similar quick ways, but if this is as quick it is definitely an advantage over the status quo. It will affect companies without investors as well, which adds up.
IMO this is half-measures. You wanna a strong EU? Merge the salaries and living standards from the north the south and west to east. Germans workers shouldn't blackmailed by auto-motive companies leaving for Poland unless they accept smaller salaries and vice-versa polish workers shouldn't emigrate to Germany to find a decent salary, pension, etc.
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...)
It's probably the most complex and impossible to solve take, it's not even true in the US or any other place in the world.
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?
> 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 have seen promotion of this idea multiple times but every time I read about it I fail to understand the gains.
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.
Have you started a company that took investment from funds located in other countries within the EU? That is the main focus of this idea. Lowering the barrier to investing in startups across EU nation states.
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.
I think starting and investing per-se really isn't the major issue for some time (at least in Sweden and probably Denmark), we've gotten many small business friendly laws over the past 15-20 years.
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.
Yep, same feeling as a Swede with so much being streamlined online, but at the same time I can see how it'd be a nightmare for someone without a BankID (or in Denmark MitID).
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By the time they've figured out how to properly document and annotate the process of removing their collective head from their ass, the US and China will have moved well past completion of several cycles of the AI revolution. The EU is fundamentally broken because they are led by people who have never accomplished things, with credentials from institutions that have forgotten how to teach and train and prepare for the real world. They have fully embraced the credentialism and pompous titles in lieu of competence and effectiveness, have leeched off of their wealthy and successful citizens, and made progress or dynamic change impossible.
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.
Can you guys please somehow involve Switzerland too? I'm thinkng about moving there and my German employer is like, "No! Even France would be extremely hard, Switzerland is plain impossible for payroll!".
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 :)
Last I heard of it this was proposed as a directive as opposed to regulation, meaning every single member state would have to interpret it and create their own national implementation. Just like with GDPR.
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
I mean, Denmark used to have LLC's and outlawed them some years ago (a thing that my accountant said, paraphrasing "look at all these thieving lawyers getting rich"), so this will mean that LLC's would be allowed again in Denmark?
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.
Europe need to open the pipe to free markets, simply said buy and sell with no damn taxes or restrictions. People is afraid to start a business because of many bullsh.t regulations and taxes, uncertainty and intentional lack of transparency.
Doing business shouldn´t be so damn hard, it should not require so many licenses, permissions, burocracy. It should be instead given priority and treated like gold as it is business that move the economy, employ people, create jobs, give you a reason to wake up motivated in the morning and even an incentive and right condition for population growth.
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.
Sorry, but I'm not convinced that the EU is actually capable of reducing regulation.
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.
There is nothing hindering European startups to raise money from all over Europe. Except that Europeans hate to invest in real businesses and love investing in real estate.
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.
> In Europe it is hostility mostly all the way, from banks to regulators to governments, and so on
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.
There might be a cultural component, but as a matter of fact if you want to expand to other countries within Europe you will have to create a local entity or hire through an EOR. EU-inc will solve this.
> American startups and businesses get investor money from all over the world, including from Europe.
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.
Since it's inception in 1993, not a single global top 100 company have been created by any of the EU countries so the struggle is real.
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.
That's not the issue. If your business is dependent on slave labor and offloading your externalities on the society to make a profit it simply means your business should not exist.
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.
Cost of labour i meant work taxation. You can see the waste everywhere. We could have half income tax, half social security and half health. Instead of taking 50% you your income. We could give 25%. And have more to boost the economy or save for future. EU is in slow death. Dying out, pyramid scheme retirement system mostly.
I'm not so sure about that. Elon Musk and Trump promised something of this sort, created the DOGE department and ended up not saving anything despite claiming to uncover waste.
> 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.
Well the slovak goverment alone stole billions of euros. Stole. Imagine if we didnt have to pay all the farm subsidies to keep 5 goats in mountains. Or to pay hungary for lookout towers in the middle of nowhere.
Well, isn’t the EU supposed to watch out for this? Taxe frauds with VAT are a big deal. And nothing gets done. But people making peanuts will get taxed to the tits…
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.
EU doesn't actually have power to tax people, each government does its own taxation. They come up with agreements like minimum tax levels to prevent things like pretending to be in Ireland to avoid taxes in France but that's about it.
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.
The assumption that a company can pay US tax rates while selling into the EU is perhaps one that should be questioned, like the ability to pay Chinese tax rates while selling into the US.
I haven't come across a single list of problem from business orgs that lists EU or local taxes, even if particularly high (California, Canada?), as a problem.
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.
Every list of problems I see from economists of all brands explaining why e.g. the UK has such poor economic performance and such a severe cost of living crisis mention the complexity and scale of taxation in the country first as a barrier to economic growth and cause of inflation.
> majority of population of any given country doesn't emigrate ever, even inside EU where it would be extremely easy
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...
Yes, they might, but in practice and with the exception of multinational corporations and some start-ups, everyone speaks their own language. And it's all fun and games that you can speak english in restaurants, cafes, train stations and the like, and then when you want to find a job in an EU country you get hit with "do you speak our language? no? ah, we're sorry then."
There's a big difference between being a tourist in Europe and actually living here.
Well, if you insist on not learning a non-English European language, last time I checked Ireland was still in the EU and they speak English.
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.
Common language works for employment and business, but then you go to government bureau (or want to fill government form) and they will insist on official language.
That is why english as secondary official language would be beneficial.
But evidence shows that they do emigrate in mass when there's a reason, it's one of the core issues of the last decade and the reason why fascists gained power all over the world. If fact its the reason why masked people in USA are hunting down immigrants.
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.
> But evidence shows that they do emigrate in mass when there's a reason
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.
California’s taxes and cost of labor combined are surely up there.
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.
While that’s also true, the EU varies widely. The tax wedge is very low in places like Czechia or Lithuania and very high in France and Germany. If you add other European countries you get some of the lowest taxes on earth in places like the Isle of Man or Switzerland.
Having said that, the lack of proper integration is a huge problem, like imposing tarrifs of over 100% on ourselves.
Labor cost has many aspects. One big and key difference between the EU and the US is that due to socialist policies in the EU, it is much much harder to fire people when the business takes a downturn. And this is why companies are not that eager to hire as fast as needed because it is very hard for them to downsize.
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.
I don’t know about other countries but e.g. in germany the law all but forces you to fire higher performing people before lower performing folks, with additional protections for especially unproductive employees. And that’s for when your business is sufficiently struggling to justify layoffs under the law.
The US hire-and-fire approach is then the other extreme.
The optimal amount of worker protection is somewhere in-between.
The optimal amount of protection provided by businesses is none. Employees are like any other costs, that may need to change based on supply and demand.
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.
In practice you can hire people for at least 6 months in Europe on a "fire-at-will" contract. But yes, you're probably right. Down-sizing is not a problem in Europe, but you can't easily choose which people you want to let go, which is a problem.
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.
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).
the proposal itself, and my comments, say no tax will be on country basis, that doesn't block standardized stock options. It just means that on monetization events taxes you pay on stocks might differ (they anyway will depending on where you live independent on anything on the company side).
I hope someone talked with lawyers that know what can be done.
I would love a (more) unified system (tax, rules, etc.). Multiple organizations/think-tanks recommended more unified systems for the EU on this topics.
The problem is if it does not fall under the EU competences it will be hard to implement at that level. To quote:
> While the businesses and objectives targeted by the 28th regime are specified to some extent, it is
unclear which firms would specifically have access to it, and which aspects of the business code
would be covered. The competences of the EU are likely to constitute boundaries in this respect.
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.
> violation of the free movement of banking services
Isn't the same as freely moving the jurisdiction under which a company exist.
It also mostly applies to cash/legal tender but most wealthy peoples wealth is
only in small amounts in cash.
Technically relevant laws are also often not classified as "capital flight" laws per-se, but are very close to it.
E.g. in Germany there is a "Wegzugsteuer" (~moving away from Germany Tax), which only applies to "hidden/unrealized reserves". When you leave Germany (~for good, kinda, it's complicated) the tax treats them as if you sold them, i.e. you have to any tax you would have to pay if you had sold them. "Hidden reserves" include stuff like you owning more then 1% of a company, certain investment founds, crypto currency, etc.. So while it's not a capital flight law as it doesn't affect cash (weather digital or physical) it is very similar to it.
(clarifications: yes in EU crypto currency is not a legal tender, i.e. it's treated more like gold. You still can use them to buy things as you can buy things based on an exchange of goods if all involved parties agree to it. Similar for a lot of the things covered by the law it's possible to sell them for very low taxes under the right circumstances, so if you don't move very spontaneously you have a lot of ways to largely reduce this tax.)
Weird. Seems to work for Airbus, Allianz, BASF, E.ON, Fresenius, LVMH Moët Hennessy Louis Vuitton (and its subsidiary Dior), SAP, Schneider Electric, TotalEnergies, Unibail-Rodamco-Westfield and Vonovia.
Of course, that's the existing pan-European SE which is a public company. Needs like a few sentences changed in the existing regulation to extend that to private companies. https://en.wikipedia.org/wiki/Societas_Europaea
This is very different. In a SE these are incorporated and sponsored by the member state. It is like each country making an equivalent copy of the same thing.
The EU-INC is EU designated without a sponsor, which is not permissible under EU law other than for the EU institutions themselves. This is one of the red lines for the design of the EU legally speaking
An SE is incorporated under EU law, and it has a headoffice registered in a member state - and that registration can be moved to another member state. Like GDPR, the relevant law is an EU "regulation" and not a directive. Directives need to be implemented in local laws, regulations apply directly (local laws may fill in details as long as they don't contradict or restrict the regulation, except of course where the regulation explicitely allows derogation).
https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CEL...
What do you mean by "sponsored by the member state"? Can you point to the exact regulation, treaty or directive that imposes this requirement?
This is the basic Maastricht treaty. You cannot make EU law in France without France creating it not as EU law, but as French law. A SE or EU-INC would have to exist within this construct.
The only exception to a legal entity are the EU entities themselves which are supranational.
This is what most people don't understand with the EU, that there is a very specific process to create law and limitations on what it can do. It isn't like the US and the EU isn't a country. I may appreciate you might be European but even within Europe the detail with it is where it matters.
Article 288 of the Treaty on the Functioning of the European Union "A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States." - for example, GDPR.
But even if this were implemented using a Directive (note: the SE is created in a Regulation, that's the link in my previous comment), this still would not mean that the law or the directive would necessarily need to require a company to be "sponsored" by a specific state - whatever that means. (Again, it would help if you'd define "sponsor" with a specific legal reference.)
And even then, Von der Leyen could have been talking about changing the TFEU treaty itself, which is ambitious but certainly not impossible. But again, I see no reason why this can't be done in a regular fashion, just like the already extant SE Regulation.
And if the authors of the proposal had thought a bit more about their idea, they would have realized that the situation is exactly the same in the USA:
You have to select a state to incorporate in. You can't incorporate "federally". All states have different laws and regulations relating to business. Just like in Europe.
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.
> The design of the EU is based on a foundation where other than the EU institutions themselves the founding legal entity must sit within a member state.
You don't get it.
You're arguing it's not possible on the basis of the law. I'm saying the people you make the law are saying they'll make it happen. Get it?
The EU in a nutshell. It's never about achieving anything through actual work - it's all about the illusion of progress through buying domain names, custom fonts, padding: 200px, marketing, and more paperwork.
I scrolled it high level but it does not look to me like this is solving any real problem and probably its creating new ones. Sure if you are cash strapped startup and can't afford getting a tax advice or an investor that does not want to pay for a due diligence this could save some money on paper. Most of the supposed benefit of this pan European legal entity seems problem that has been already solved in the real world. The same type of entity works more or less the same through out of Europe with mostly marginal difference, and sounds more like an excuse than anything. Of course each jurisdiction has is own jurisprudence which make the landscape more complex, but once you get a new type of "inc" you are going to get new jurisprudence, only that in this case you are going to be a lot of jurisdictions conflicts and potentially you might have to take into account multi-jurisdictions jurisprudence making everything even more complex. Also I would remove as second point an "EU-central registry", it's not exactly a killer feature considering that all the European registries are currently accessible from a single web page already.
It's inordinately difficult and expensive to start an LLC or SA in some EU countries. It's even difficult and expensive to _stop_ an LLC and dissolve it. Huge amount of risk and cost on founders and a huge distraction from running a business.
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").
> a company should be able to register in x days
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".
Companies are treated like persons legally and while I'm sure there is too much bureaucracy in many places, I'm also sure that there are important documents that should be required.
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.
> For example to make sure that a company can be held responsible when it breaks the law.
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's not a hack, if you operate the entity from Germany, it must be registered in Germany. It's often touted as a tax loophole, but it's not. Tax authorities do not care about you unless you actually make money, then they will come after you.
Would the liability shield not generally apply to a foreign entity registered in Germany? Sure there may be special rules for non-compliance with specific tax obligations, but I'm talking about for general liability for other purposes, like a contract signed by the entity where no personal guarantee was given, or a harm caused by the corporation where the owner was not personally involved or negligent in causing the harm.
Which law says it must be registered in Germany?
It must be seated where the business happens for compliance with tax laws. But you may have a French S.a.r.l. in Germany and thus fall under their company law (with impact on publication responsibilities, company governance etc.)
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.
Specifically, it must be seated where the principal management of the business occurs.
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.
It's not that easy if you want European integration and support the idea of "freedom of settlement" also for companies, which to me makes sense and it is known that some countries try to pull companies to register in their legislation with sometimes improper means. I would prefer to focus on Irish taxation, which extracts value produced elsewhere to Irish benefit.
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.
>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
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 is complicated and has multiple dimensions. For example it also leads to workers not switching Job away from an employer as quickly.
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.
Unfortunately your comment still doesn't address my concerns on how this model is supposed to be sustainable to work in the future given the new economic realities of Germany's faltering industry, and especially the existing intra-EU disparity between german labor and eastern European labor, let alone international labor.
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.
It's not that it must be registered (incorporated) in Germany. It's that for tax purposes if the company is run from Germany it will be considered "permanently established" and treated as resident there. Permanent establishment laws are often quite surprising to people doing business across different territories.
Piercing the corporate veil is a very common practice across countries, both in civil and statutory cases as well as administrative cases. It’s a very fragile shell.
There is a huge spectrum between "require impossible documentation" and "require none". Germany and EU are heading towards the former.
German here. That's not true. What crazy documentation do you require? An ID, proof of residence, and a business plan? (edit: you don't even need a business plan)
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.
> ... and a business plan?
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.
> It's none of their business what you want to do with your company
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
> it seems particularly the German-speaking countries are borderline obsessed with a) titles
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.
I like that you know what an Engineer is in German, and not the 1000 BS Meanings it has in the US
Actually I think I might be mistaken that you are even required to make a business plan. It's listed as one of the steps on the states portal about founding. But it goes on to say that it's not technically required, just highlights its importance.
https://www.existenzgruendungsportal.de/Navigation/DE/So-geh...
Several sectors of economic activities have the potential for atrocious externalities and it's absolutely the government's business to know about these and make sure that you're following regulation to minimize these externalities. When you make your employees the neighbours sick (or straight up kill them) it's an enormous failure on the part of government. It's easy to be oblivious to that when you only think about software.
Exhibit A: https://www.ctvnews.ca/montreal/article/battery-facility-acc...
Except it seems that it's often large companies - typically those with lots of lawyers - who seem to get away with what I can only describe as "corporate misdeads" most regularly.
"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.
It’s interesting how people can apply thinking like “there are problems, it’s not perfect, better not to try” to government, but also be pro starting businesses
I don't know much about corporations, but why business plans are needed at all? I mean, for EU citizens.
bank (loans), immigration and investors can be interested, but their interests are not covering every corporation out there.
There’s absolutely no need to have a business plan to start a company in Germany. You articles of incorporation and they state a company purpose, but this can be something as simple as “do IT consulting”.
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.
It's basically a proof of "most basic effort" that you're serious. You could probably note down some stuff on a single A4 and get it approved, it doesn't have to be a 40 page dossier.
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.
That doesn't really sound like a barrier to the easy scams at all. It just sounds like something someone once thought would be a good idea and now everyone has to do it because that's the process.
ChatGPT, give me a convincing sounding business plans for starting a bussiness in Germany.
Done.
How would this get rid of easy scams?
Previous HN discussion about setting up a GmbH.
https://news.ycombinator.com/item?id=39959368
> business plan
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.
There is no problem, because no business plan is required.
Literally the whole effort this submission, is about is moving a tiny step towards "require none" but not go all the way, compared to how it is today. You chose the wrong submission to comment that on, in any "new regulation in EU" submission that might have been appropriate, but this move is quite the opposite of what you say is happening.
> this move
My point is that this move will not happen. I don't believe EU can overcome a huge and extremely motivated army of bureaucrats.
This isn't an EU move, is it?
> This isn't an EU move, is it?
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.
> For example to make sure that a company can be held responsible when it breaks the law.
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.
Is that actually how corporations work in the EU?
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.
Syngenta got sued over paraquat and has already agreed to pay more than $100M to one set of defendants while still being actively sued by others. Corteva is paying in excess of a billion dollars over PFAS. Bayer/Monsanto is paying in excess of ten billion over glyphosate. That's only what they've already agreed to pay; others can still sue them for more.
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?
> In Germany, the government recently decided that some minor applications to local governments must be answered within X days or else are automatically approved.
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.
In most (all?) US states, you can just start a company. You file a form, usually online, with the state, and you ask the IRS, online, for an ID number called an EIN. Technically you have a valid company after just step 1, but good luck getting any sort of bank account without doing step 2.
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.
> Why should it be harder?
Marx won. You should learn how easy it is to fire an employee in a software development company in Germany.
(spoiler: almost impossible)
This is admirable but the process in Germany right now is overly burdensome. It probably does weed out some bad actors (and good actors) not because of the documents required or any sort of checks performed, but because it takes months and costs thousands of euros.
Which in itself wouldn't even be a problem if lack of said documents caused your submission to automatically fail validation right at the start. Instead, a real, live person will need to review your request to verify that it indeed includes a full set of documents, said documents are genuine and "correct" (despite most of them already being issued by the government!) before approving your request.
And given the founding principles of bureaucracy, no set of documents is ever correct because there are at least two contradictory regulations on any given topic.
I think what's even more important is that the costs for founding and maintaining such an LLC should scale with revenue, including scaling to 0.
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.
Social security gets paid on wages. Revenue doesn’t play into it.
In Portugal (for example) is is mandatory for an Lda (limited company) to have an employee, and they must be paid minimum monthly amount. In practice this means a few hundred euros a month go to the government in taxes. Then on top of that is another hundred or so in accountancy fees.
As someone who had a company in Portugal I do not understand what you meant about requiring an employee to have limited liability company. You may be referring to the need for one of the owners needing to pay social security but it only needs to do so if it does not pay in any other form. It hurts but it is not unreasonable and may provide unemployment benefits.
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.
Not quite true. In Finland YEL (yrittäjän eläkevakuutus, pension insurance for entrepreneurs) is required and it's based on estimated value of the entrepreneur's work input. Even if you pay yourself 0 euros your YEL income is likely higher. The models that insurance companies use take revenue in account.
If they were being pragmatic about it, the more universal healthcare systems offered by many EU nations should be a massive advantage for startups vs nations like the US, but the wrong regulations around company operations negates it or worse.
I didn't want to start a healthcare discussion but employer costs with healthcare in the US can be lower than Europe labor taxes. EmployEE costs is a different thing but many startups have young employees who don't need a whole lot of healthcare in general.
The employee healthcare costs don't count, so we can pretend that healthcare costs doesn't detract from performance or the ability to hire talent?
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.
I'm not arguing which system is best. I'm just saying this isn't a big advantage for a lot of startups from a purely financial perspective, which was the original point.
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.
Startups but definition have no revenue.
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
>> Startups but definition have no revenue
"Having no revenue" is definitely not the definition of a startup. There are plenty of startups with revenue (and even profit!)
> Its also a chicken and egg problem. Having a revenue means having a company and vice versa.
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.
In the US, it is common for a small startup company to have no employees. Your role and title with a company is separate from your official employment status. This is where concepts like "sweat equity" come from. You can be an owner and work on a company without being an employee or receiving any compensation. Creating a company in the US comes with no real obligations to do something with it.
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.
In the USA California, Texas, Delaware etc all have different company registration and compliance processes. This has not damaged the business environment.
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.
Well yes and no.
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.
Its almost impossible for a fund from Germany to invest in a company from France and vice-versa. It is a significant problem!
That sounds like a significant problem ... for either the Germans or the French to resolve. The only thing stopping foreign investors is law enforcement officers telling them to stop. The Germans can, literally, just not do anything except enforce basic property laws and foreign investment would pour money in.
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.
> That sounds like a significant problem ... for either the Germans or the French to resolve.
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?
> 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)
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.
> 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".
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.
Each of those places (besides Delaware, kinda) has economies larger than a large chunk of the EU.
Yeah, we've realized that, that's why we keep iterating on the union :)
Has it been effective though? The EU used to have a bigger GDP than the USA in 2008 now the USA is over 50% larger. Member nations are still dragging their feet on doing much of anything in the Draghi report and it's unclear if that will ever change.
> Has it been effective though?
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?
> USA keeps getting a larger GDP you say, yet the population at large seems to be getting poorer
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.
"Poor" isn't just "doesn't have N USD", purchasing power as just one example, matters so much more. But maybe it was a poor choice of words on my part, sorry.
Many people in the US have a huge problem with affordability, and can't afford healthcare and medication, education, housing, and sometimes food.
That's what government social programs like Medicaid and SNAP/EBT are for, accounting for about 800 billion in gov spending in 2025, and a total of 1,2 Trillion the US gov spend on welfare in 2025. That's exactly the opposite of being poor. If you want to see real poverty, go to countries that don't have any government welfare programs.
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 what government social programs like Medicaid and SNAP/EBT are for
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.
>Many people intend those programs to work that way, but they don't
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.
This is a commonly cited stat but it is mostly an exchange rate phenomenon that disappears when you adjust for purchase power. If you go by comparing GDP in dollars the EU recovered almost half this gap last year simply from the dollar dropping in value.
I was about to say... give dedollarization spurred by the current administration a couple more years and then compare GDP.
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.
My point is rather than almost anything can be made smooth if you have enough $$ pointed at making it so. One of the biggest issues with small economies is that they don’t have the capital spent to make it easy to do things yet; which is friction that helps keep them small.
This is so ridiculously contrary to a Northern European existence that it's just funny. US is ridiculously more bureaucratic with lots of back office papers shuffled around by humans. US tax filing is hard to even describe to someone who never lived there.
Official procedures can be made smooth by valuing them being smooth.
You just pay. All the problems are known and have workarounds, it just involves money.
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.
That's a very American approach. Just enable a grift economy existing purely because the original thing was bad. The Nordic approach is to make the original thing better. The end result is less wasteful.
Also smaller. The ‘waste’ also counts towards GDP, as long as the money keeps moving.
Lots of people have built homes and families off it.
What really slows an economy down is when money stops moving.
> The ‘waste’ also counts towards GDP, as long as the money keeps moving.
Honestly, that explains a lot. Vastly different perspective from what I'm used to, but useful insight into the US.
Yup. It can be pretty brutal living it too. But most places are, frankly, in their own ways.
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.
That's an argument for U.S. healthcare insurance industry being a good thing. Uhh.. no?
It certainly pads a lot of people’s wallets! Like anything, it’s about what trade offs, when, by whom, etc.
> My worry is that the end result will require
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?!
You know that EU bureaucrats do what each country want them to do right?
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.
https://en.wikipedia.org/wiki/Euromyth
http://news.bbc.co.uk/2/hi/europe/6481969.stm
> You know that EU bureaucrats do what each country want them to do right?
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.
You said
> 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
> hard pressed to think of a more regulated country than Germany.
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.
>Which is just German culture as much as food is Italian.
https://www.bbc.com/travel/article/20250227-is-there-no-such...
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This is the same as saying that Russians are wild boars who only care about vodka, stupid wars, money and women.
Source: Dostoyevsky
Stereotypes exist for a reason. It would be stupid to argue that every single Russian is exactly like that. But at the same time you'll find those traits exhibited in a lot of Russians at various levels of seriousness.
Being bigoted is also pretending that tribes/cultures do not share patterns and behavior. Individuals are unique, but they exist as part of a group. When you talk about the group, you necessarily need to make shortcuts and synthesize.
I'm pretty sure that when you talk about dogs, you'll attribute specific behaviors to specific races. But now it is not politically correct to think humans are the same, even though it is scientifically provable.
> The EU was supposed to bring countries together, but I think it did quite the contrary
What are some concrete examples of how Europeans countries are now further away from each other, since the start of EU and because of EU?
As someone who enjoyed the ability of freely moving across the continent to find a country I'm actually comfortable living in, it's hard for me to imagine EU made countries more distant to each other, but I'm not all-seeing and would love to understand more from another perspective.
Well, in the logistics department there is definitely more freedom. But it's not as much as you would think. You can ship stuff easily, travel easily, and send money easily, but at the end of the day, you'll have to submit to the government bureaucracy of each specific country with no real unifying logic and not even a shared language. Technically, English is used everywhere (even though, ironically, the English are not even part of the EU anymore), but you can't really rely on it to get anything done locally in small cities. If you want to move in the middle of France, good luck trying to deal with the bureaucrats in English for example.
Then the freedom was a pretext to do a lot of social dumping. If you ask the workers of the Renault plant that got displaced in the east because of lower labor costs, they won't have a lot of good things to say about this freedom. I know a trucker who somewhat hates Poles, not because he has anything against them particularly but because they engage in social dumping by competing for work in France while only following laws from Poland. A Frenchman living in France can never be competitive with that because he has to pay a lot more in taxes and follows the French laws.
Germany engages in regulatory warfare for electricity. They are ideologically against nuclear and imposed renewables as the only solution (while burning a shit ton of coal/gas). Since their approach is very costly and not reliable, they imposed regulation on the European electricity to make the cheaper French nuclear electricity less competitive. That wasn't enough, so even though they don't have nuclear anymore, they forced themselves into the Flamanville project and imposed their insane regulation (via Siemens), which is the major reason it took so long. This is industrial sabotage and engaging in bad-faith collaboration. And now we have to sell them winter electricity on the cheap while they offload their summer electricity that literally nobody wants. It's impossible to not hate them for it, since electricity prices have risen tremendously for the end consumer. The crazy part is that it completely undermined the supposed goal of lowering emission (people went back to heating with wood-burning and paraffin/kerosene stoves).
Spain floods the market with cheap fruits/vegetables that are much cheaper not only because of geographical comparative advantages but also because they import cheap seasonal labor from North Africa, often not respecting labor rules (that much became obvious in the COVID crisis).
Italy wants to leave because they are going down the fascist path they already took a while ago.
Lidl, a German supermarket chain, sells cheap Chinese-made tools in their stores under the pretense of German quality. But since the rise of platforms like AliExpress/Temu, consumers have had access to similar items for even cheaper because they allow cutting out the middleman. Unsurprisingly, the EU ruled that now consumers have to pay taxes on the items they buy directly from China. Freedom is OK only when it is the powerful that can fill their pocket after engaging in rampant social dumping. For now, China has settled on shipping stuff to a warehouse located in Eastern Europe and dispatching it from here, basically using a regulatory loophole that allows them to pay the cheapest amount of taxes.
I could go on and on, but the reality is that the EU has largely impoverished and weakened most of its constituent countries. It doesn't look that way for now, because everything has been paid for with unsustainable debt. But now the invoice is being presented to the young generations. The EU can't even manage to make a common army or apply regulation uniformly across countries (look at the labels on products).
All it has done is create unfair competition that benefits the powerful first and foremost. So yeah, you can travel freely, but who cares? In my youth I traveled in many EU countries before it was open like that. Stopping at customs and having to exchange currency was inconvenient, but improving those mild problems is definitely not worth the massive amount of exploitation and dissent that has resulted.
The EU is the same ideological enterprise as the USSR, and the same problems that are linked to a massive bureaucracy are now showing up. You just cannot force different groups to adopt the same rules/behaviors because there are too many cultural differences. Values are too far apart, and the environment/advantages are too different. Germany likes the EU a lot because they have outsized political power in it and are the ones who profit the most: they get access to cheap eastern labor/resources while being able to sell in the rich markets of their neighbors on the other side.
We may enjoy the freedom while it lasts, because the EU is under attack from all fronts. Russia is waging a real war, China is engaging in economic warfare and the US is pulling out military support to gain resources. The constituent countries are not any stronger, and in fact, they have weakened their position on many fronts. Fighting together is illusory because the interests/incentives are more often opposed than aligned.
That's a lot of words to skip around the actual question at hand here:
> What are some concrete examples of how Europeans countries are now further away from each other, since the start of EU and because of EU?
Are you claiming that France and Poland are "further away" from each other today than before, because of those issues about the trucker?
Are you saying that Germany is now further away from the countries in Europe than before EU?
You're going on a wild tangent, and I gave you the benefit of the doubt to read all of it, hoping that eventually you'd get to the point. But it's all tangents, nothing about the topic at hand.
So again, the initial claim was "The EU was supposed to bring countries together, but I think it did quite the contrary", do you have any concrete instances of this happening? Not theoretical, not how one Frenchman now hates Poles, but actual instances of the countries not getting closer together, but further apart, because of the EU?
Because currently, your non-answer makes it seem like you don't actually have any concrete examples here, leaving your original comment looking like ramblings without any rationality.
This is possibly the greatest bullshit I've read today. Greetings from Germany!
You should bear in mind that thinking of an IT specialist or a software developer is very much uncommon among population. As developers we tend to think alike worldwide. But walk out the door and ask ten (older) German people whether they would prefer to use government email-like service instead of paper mails, and see what answer comes to the top.
Read so far*
You haven't read all the 280 comments in this submission yet ;)
Not sure it's worth the time. ;-)
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> Certainly no one wants any of this. Yet somehow the rules pile up.
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.
> precisely defined bureaucratic process for everything
Which is extremely similar to communism. As in: perfect in theory, impossible in real life.
Bureaucracy is a beast with its own life, it doesn't care what regular people want. In fact most folks' requirements go directly against objectives of this beast, since people want it as small and as weak as possible, while beast need to be fed and feels internally it needs to be strong. Anything not related to gaining or maintaining strength is antagonist.
And even if that's not the case, the group of "entrepreneurs" is so small compared to the voting population at large, that they won't even notice if they crush it entirely into paste.
Exactly this. Common folks like "tough on crime" postures of politicians and never consider nuance, which is everything. Yeah, crush them, those white-collared fraudsters.
It's the same in Belgium where it takes weeks to start a business, but as a French said to me some time ago, it's better than in France.
> It's even difficult and expensive to _stop_ an LLC and dissolve it.
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.
I've been told by a lawyer that a common sensible step in closing companies in Germany is to first...reseat the company in the UK ... (at least pre-brexit - not sure if things have changed). Think of how bad and expensive the process has to be for this extra step to be worthwhile.
I have been trying to close a UK company for the past 2 years (created post brexit).
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.
>Hence you gain nothing
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.
I am a European living in the US and my god I am tired of hearing this over and over again. If your biggest hurdle to start a company is the paperwork you’ll have to do for one week, you better think of something else.
And yes, there are other way bigger issues in my opinion, such as financing and even social support.
If the paperwork ended after one week, it wouldn’t be so bad, but it’s just the tip of the iceberg.
I don’t understand why people pretend there’s no paperwork to do in the US. Not only that, but different states have different processes.
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.
I agree that paperwork requirements exist on a spectrum, and I am only familiar with the requirements in a few different jurisdictions (though I've read a few comparisons with a wider variety).
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.
Having a startup in the US is a huge mess due to all the states and taxes, if Europe can make everything digital AND easier, it's a no brainer for us to move our company there.
Why would moving to the EU mean you don't have to deal with states and taxes? Would you abandon the US market completely?
We have clients all over the world
There are many companies that deal with this complexity for you. Online payment processors and e-store services for instance. Source: I have an US company, sell products to all states and don't deal with this.
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"...
> Having a startup in the US is a huge mess due to all the states and taxes
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.
> Having a startup in the US is a huge mess due to all the states and taxes
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.
>>Having a startup in the US is a huge mess due to all the states and taxes,
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.
If dealing with VAT is a large problem for your business today, running a business might just not be for you, it's very trivial today to get it right and there are even platforms who basically does all the "hard" work for you. 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.
>>If dealing with VAT is a large problem for your business today
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.
> 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.
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.
For me it's very stressful to not comply with the regulation on purpose hoping I am too small to not get punished by the authority. It would be easier to just ignore the regulation. I get this makes me not well predisposed to do business in EU. Thank you for your advice.
> It would be easier to just ignore the regulation.
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.
Dealing with anything from day 1 is harder than doing it later when you have predictable money and growth.
Hence most countries has a threshold for when you need to charge the country-specific VAT and let you use the local one until you reach there. It differs by the country as far as I know.
At least in Germany, this is not correct. You do not have to pay that unless: You earned more than €100,000 this year or more than €25,000 last year.
But there is no threshold for cross-border selling in the EU.
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)
Following US sales tax has way more complexity. In my county alone there are many different rates depending on the city in which the sale is made. Even just finding out authoritatively which jurisdiction to pay taxes to is nontrivial, practically impossible to solve without dedicated software.
> 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.
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.
>>Kinda, but misinterprets the VAT itself.
>>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.
I think they're referring to this https://europa.eu/youreurope/citizens/consumers/shopping/vat...
You can just use a service for that if you find that too much work to do yourself. There are MoR services that do that for you for EU, AU, US states where it is required etc. It is more that most people outside the EU find it bullshit and just don't do it and complain about it anyway.
They won't be able to solve the problem. The only reason all those roadblocks exist is to control/regulate everything in a way to ensure the maximum possible taxation. At the same time, bureaucrats get to justify their existence, pretending to do meaningful work while they only take from productive people.
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.
> 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").
It was announced you will be able to create company fully online and will have it ready in max 48h.
Agreed. The one bastion of sanity in all this is (/was) the UK. I formed my first company there, 18 years ago, online, in 30 minutes, for around £20.
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.
> 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.
Is this a true problem in EU (or indeed anywhere)? I don't think starting a company is the bottleneck, it's mostly the inordinate amount of regulations one has to comply with, as well as the strenuous laws around letting workers go, while making people work as contractors being also frowned upon.
I'm not sure how any one these is going to change.
Those things are as designed. This is good. We don't want "at-will" employment like in the US. We want to have rights as employees. We want to have social welfare. We want our free healthcare.
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.
Free healthcare and social welfare I'm in agreement on. But why does at will employment need to conflict with that? The problems of wage values, food and shelter, and healthcare can be handled completely independently of employment. If someone feels it is too easy to do nothing without requiring employment to gain some of those benefits, you can have the government as an employer of last resort. But making it easy for anyone and everyone to start and maintain a business is a societal good. We are asking why doesn't a person have guaranteed employment, when we should ask why do they need it. If a person was let go and could with empty pockets be assured of food shelter and healthcare, and also be able to start their own company on the way home from being let go, that is the society I'd want to live in.
At will employment is something we'll never accept here. We don't need the threat of having nothing from one day to the next.
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.
I agree with everything you said except for the cowboys bit. I don't think business owners should be a separate class of people. It shouldn't be unusual to meet people that own their business. I don't want to do it, it would stress me. But we can let random people try random ideas without having to start out wealthy, and we shouldn't have the failure of that business and the loss of those employees' jobs, risk the health and well-being of those let go. If getting fired just meant you had to do with fewer luxuries until you found another, we wouldn't need to protect those jobs to the detriment of a business. By tying employment to safety and well-being, we complicate the whole matter.
Most people in the US own stocks the USA is "fixing" this by making everyone part of the owner class. Especially now with childhood investment accounts by the federal government (the "trump accounts").
By cowboys I mean the people starting businesses left right and center and just collapsing them when they don't get the desired result straight away. E.g. US venture capitalism. I think it's a really good thing that we don't have that here in Europe. Sure it prevents the googles and metas but those would never have made it that big here anyway because we regulate big businesses before they become uncontrollable. And now that we are breaking off ties with the US we will have to build our own anyway, just with sustainable and fair business models.
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.
Various places in Europe already have what amounts to at-will employment. There are exemptions for companies under a certain number of employees (e.g. 25 in Italy). There's a wide use of fixed-term contracts (6/12 months). Many work through agencies, which means they can be "fired" with a few weeks' notice.
Depends a lot on what country, but I think you'll find that the ratio of full-time employee vs contractor/at-will employee in most European countries will look very different from how that ratio looks like in the US (or other similar countries).
Sure, but that's very different from saying that Europeans have would never accept it. It's already happening quite extensively, though not as much as in the US. Europe seems to be 20-40 years behind the US in various economic and social developments, but it's not immune from them.
I don't read "we'll never accept here" as "it's be impossible", more like "we won't base our entire economy on that, it's not what the average person wants", because obviously Europe has various staffing companies already, and if you add a tiny bit of nuance into what they said, I'd agree with it too.
> 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.
> 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 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.
> That's one perspective, another is that US is 20-40 years behind Europe [...]
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...
Differences once you break the 0.9 range are more noticeable at the bottom end, particularly in the context of the OP's claim about people in the US "struggling to stay alive". There's also an "inequality weighted" HDI (accessible from your HDR link above by drilling down to the individual country data) which puts the US a fair way behind many of the EU countries the sheer weight of its per capita GDP puts it ahead of (on that index the US is even marginally worse than some of the wealthier Eastern Bloc countries, but interestingly on dead level pegging with France for the last decade)
Even then the US is comparable to France - the only European country that comes even remotely close to America's power projection capabilities - and significantly above Italy, a fellow G7 member and large EU member that also has power projections capabilities.
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.
Interesting segue from claiming Europe is 20-40 years behind the US to claiming if Europe's policy choices have resulted in any better outcomes than the US its because they're enriching themselves by taking advantage of the "peace dividend"! I guess I'd have to agree that in the current diplomatic crisis of America's making, there is literally nothing some Americans won't use to "justify" blaming it on Europe....
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.
> Interesting segue from claiming Europe is 20-40 years behind the US to claiming if Europe's policy choices have resulted in any better outcomes than the US its because they're enriching themselves by taking advantage of the "peace dividend"!
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.
Not really. Fixed-term contracts can not be used indefinitely. A worker must be permanently hired after the first extension. Agencies can not be used indefinitely, and also, the agency is required to support the employee after the client lets them go. So the company just pays to shift that responsibility but the responsibility towards the employee is there. A company is also not allowed to make an employee 'self-employed' by making them start their own company. They must always have multiple clients, if they have just one the government will consider it permanent employment with all strings attached and will apply all relevant restrictions and taxation retroactively.
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.
> A worker must be permanently hired after the first extension.
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.
> 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.
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.
The EU is not a state.
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.
> And no, wealth inequality is much higher in the US
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.
It really matters which state you look at. Wealth inequality, gdp per capita, and median wage are all better in several eu members than in the US, and that still holds if you factor in housing and cpi in general. There are other states where that is really not the case. Its mostly the Scandinavian countries outperforming the us on these metrics and they are relatively low population in comparison so its kind of an odd one to make. If the goal is total gdp, who cares about the median wage, then the us/china plan does make more sense, but neither of those plans work without the other existing and cooperating.
The EU has a borderline stagnant economy, couldn't defend itself from Russia, facing population collapse, totally whiffed on the tech scene explosion in the last 25 years, now also missing out on AI. European social obligations are expensive, yet nobody seems to really want to stress about creating new sources of wealth.
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 can defend ourselves, it's just that the US didn't want a too-powerful Europe until trump. In particular nuclear. They heavily pushed against that.
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.
"In particular nuclear. They heavily pushed against that."
Saw this yesterday related to nuclear deterrence in Italy.
https://x.com/NichoConcu/status/2012882747434426605
> Population collapse is a good thing.
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.
We should definitely go all in on a perpetually growing population, what could possibly go wrong.
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.
This "greed" and lack of foresight underpins a lot of the welfare states of Europe. Many member states are doing nothing at all to account for this population shrinkage, much less plan for a world with less people.
Europe didn't want a too powerful Europe until Trump.
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.
No, but back then the US was a trusted partner. They wanted to provide military protection in return for geopolitical influence. Both are gone now of course.
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.
Refusal to learn and change, even if it means learning from people you disagree with, is simply arrogant and stupid. The US is the biggest economy in the world with the strongest tech sector in the world, they are obviously doing something right. And many personal accounts from people doing business in the EU in this thread show that the EU is doing at least some things wrong.
We don't care only about money. We're doing pretty great, we have some issues like housing cost but the US has those too. I'm happy with my life and I don't feel like there's something missing that having more money would fix. Less employment and welfare rights would cause a lot of worry and uncertainty though.
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.
> 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?
> We don't want "at-will" employment like in the US.
Only lazy people want to be employed for life somewhere. All the benefits, no responsibility.
No, we still work. Just want some continuity. Not working for a company without direction chasing the latest fad and dumping everyone if it doesn't work out, but a good company with a decent business plan.
Is someone forcing you to work at a company chasing the latest fad? You go and choose the type of company you want. The keyword here being "Choice".
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.
You are thinking of the continuity of work, colleagues, and responsibilities. Those are of course good to have, especially from the perspective of the company.
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.
No, What i'm thinking is Having the option to choose Salary Stability or Salary Risk. In that scenario if the employee is fired after just 2 years (worse case) because the project does not work, he is still financially better (compared to what he was getting at the "stable salary") even if it takes him 2 full years to find another job (something very unlikely if there is a dynamic employment market).
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)
You are free to choose opening a consultancy yourself and take on the salary risk as well as reap the rewards.
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.
Then go be an entrepreneur and create a company with no risk of failing. And let us know how that works out for you.
I don't want to be an entrepreneur. And it doesn't have to be riskless. Just to have a good business (plan).
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.
> Companies exist to provide jobs. Not only to make money for the owner and externalise all the negative effects on society.
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.
Good thing then that there's a range of options between being let go immediately for no reason and companies being forced to employ bad employees for life.
Yes and that's basically what we have in most of Europe.
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.
In NL I guess that is similar to France; in our case we always started a binder on a new employee so after their trial period/temp contract, we continue collecting info. If that person just waited for the trial to be over to just do nothing, we go to the court with the binder and get them out. We stopped after a certain period depending on what we collected so far: most binders are empty anyway. Also, you can fire someone without that if you have economic cause (which should be the reason for firing someone good) or you can fire them without that by paying them some months in the future.
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).
AUstria (and especially Switzerland) has virtually at-will employment. No need to show anything to any court, just the notice period. Job security is virtually non existent.
> a complete application should be no longer than y pages
The monkey’s finger curls. All contract text is now sized at 2 points.
There really is no reason for it to be longer, more expensive, and more complicated than what exists today in, say, the UK where you can do it all online for about £20 (or is it £50 now?) and complete in a matter of hours.
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.
Truly, this is one of the greatest losses of the UK leaving. For both parties. Advising EU startups on where to incorporate that isn’t London could be so much simpler.
What about Luxembourg?
If you have to setup a company today, and want the easiest path to EU-wide SaaS, probably Estonia is the way to go, very easy for EU citizens (don't know how the experience would be from outside, if it's even possible).
It seems easy enough for US residents as well: https://www.e-resident.gov.ee/nomadvisa/
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).
Interesting https://eurosaasedge.substack.com/p/the-estonian-saas-formul...
Too bad that Estonia won't exist after 2027...Russia will gobble it up alongside Latvia and Lithuania.
Yeah, such a shame Estonia isn't in NATO nor the defense clauses of the EU, so they're sitting there all alone at the border...
Avoid Luxembourg like the plague unless you are a company like Amazon. And even them are making a massive mistake form a governance and risk management point of view of being based there. But they have their tax deal...
Can you explain why?
Where should I start... :-)
- 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.
Wow thanks for the long reply, unfortunately many if not most of your points are common in all of Europe. I asked you to clarify because I am not only curious about the topic but I strongly believe that these issues should be talked about way more frequently and reach when possible the general population.
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.
> 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.
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.
You don't need business plans and all that stuff. The problem in Germany for instance is that a GmbH needs 25k of capital + expensive notarization. These are the only two things that need improvement.
You can start an Unternehmergesellschaft (UG) within days with a template. However tax filing burdens will costs you around 2000€ baseline a year without having a single Euro of revenue let alone profit.
In NL at least some of that changed; no more payment. It used to be 19k guilders and after about half in euros. Now nothing. The rest still the same.
Came here to say the same. Founding a company in Germany is way to complicated and expensive... same for dismantling a company. I don't understand why you need a notary for everything.
Clear right? Because of notaries? They are powerful as everything official goes through them. They also do nothing usually; their underpaid underling presses a few buttons, enters a few names (often wrong the first time), prints and so on and then notary reads and signs. Money made. Luckily this has been changing a lot that some notaries smelled a rat coming and started to go for mass market, heavily undercutting all others for standard contracts; in some cities I have seen these type of places eating all the other ones. They are fast and cheap until you need custom stuff.
I agree on application costs to be less but I believe a company needs to bring some capital. In Switzerland you need to pony up 20k in startup capital for a GmbH or 100k for an AG (ignoring the 50k work around), it belongs to the company but guarantees some security for customers and vendors that you aren't just going to take their money and run.
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.
You can pony up however much money you want and show customers the founding document that says the amount the company was started with. I believe it's usually publically available even.
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.
>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.
That sounds like a really good use for AI.
It is, it is what I used in my PhD for dealing with the Spanish bureaucracy and university.
You mean to process it or to make up stuff to satisfy the regulators?
"It is a mistake to optimise something that should not exist in the first place." - Elon Musk (apparently, although I would be astonished if Deming or Ohno hadn't said something similar)
I agree, but us individuals cannot change the system that easily. But we can use these tools.
>That sounds like a really good use for AI.
No, it is not a really good use for a word prediction engine.
In Europe, there are two parallel realities which coexist, have some influence over one another, but are ultimately somewhat separate.
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.
In the European countries (yes, plural) in which I have lived, _most_ (admittedly not all) employees would decline such a request as abusive and illegal, and employers which insisted would be on the hook for damages were they to insist.
This is the truth.
Everything else is much more expensive so AI is actually the cheapest and only viable option. I mmm
You can start a business in Estonia in 2-3 days and get e-residency there. Sample incorporation business (no affiliation): https://enty.io/en/incorporate-estonia
Go Estonia!
UK has been the easiest place to form a LTD
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
What's bad about requiring IDs for directors? Surely you'd want to verify their identity?
Yeah, since there's lots of countries and some are very dynamic and modern, maybe they could act as early adopters. But don't stop there: if it works for the early adopters, others could also apply their lessons. For example Estonia is often mentioned in electronic government etc.
In my experience it is very easy and pretty cheap to start a LLC in Poland.
Those requirements should include "estimated setup & recurring administrative costs for businesses of size x to comply should be lower than y" in some way.
Dissolving an LLC is a in ideal case a multi month process. It's often easier and cheaper to just keep the LLC as zombie instead of trying to dissolve it.
Didn't Estonia solve this problem?
> It's inordinately difficult and expensive to start an LLC or SA in some EU countries.
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.
All this "know your customer" stuff is fallout from 911. We in the US went bonkers as a result of 911 and what used to be tinfoil hat conspiracy thinking ended up becoming national policy.
As a reminder, KYC/AML is imposed by the USA on every other country in order to access the USD banking system, and the USA uses any excuse to cut off entities it doesn't like.
> Huge amount of risk and cost on founders
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.
> 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?
My Dear German friends, please accept that EU-inc is a massive boost for EU competitiveness. Continuing to block progress here only proves that the EU is good at making promises on paper but fails to deliver real change.
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.
This idea was made by French and German government . I'm not sure why do you think the German government is against it.
> This idea was made by French and German government
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.
Reading this thread, I do not get Germany's worship of notaries and notarizations.
> Reading this thread, I do not get Germany's worship of notaries and notarizations.
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.
I assure you American politicians and lobbyists do worship those malign traits.
What I find funny is that in Germany, you can only buy a house with a notary to prevent shady things (reasonable), but up until 2023, you could literally buy the entire thing with cash, without having to provide any proof of the origin of the funds.
Isn't the notary there to take note of the shadiness of buying in cash and, if shady enough, abolish the transfer?
The last time pan-European private companies (SPEs) were seriously proposed (2008) opposition from the German government blocked the proposals, the idea limped along until finally being ditched in 2014 after disputes in the European Parliament about worker representation on boards.
SPEs were supposed to follow on from SEs (public companies, introduced in 2004) and SCEs (cooperative societies, introduced in 2006).
National sovereignty is not national pride. Paying company taxes to the 28th regime evicts tax contributions to the company's home nation. Massive German tax money is already today used for non-national interests. EU-inc makes this only worse.
This is incorrect. Taxes, pensions and labour laws apply according to the country where the EU Inc is operating.
I don't understand the tax objection. The 28th regime changes corporate law, not fiscal law. A Berlin-based "EU-Inc" still pays full taxes (Körperschaftsteuer, Gewerbesteuer, etc.) to the local Finanzamt. It isn't a disembodied tax haven - it just standardizes the legal wrapper.
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).
National sovereignty in Europe is not possible without international collaboration.
> Massive German tax money is already today used for non-national interests.
Please elaborate. You're complaining that DE tax funds go to the EU? Very curious what you're talking about and your rational.
> You're complaining that DE tax funds go to the EU? Very curious what you're talking about and your rational.
Germany is the biggest net contributor to the EU. The money comes from German taxpayers, who receive disproportionately little value in return.
This is wrong on so many levels. The German economy profits _a lot_ from the membership. You can't just look at the monetary in/out flows to/from EU accounts but to the system as a whole.
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For example, decades of pegging the value of the currency down, thus facilitating exports on a massive scale and thus pushing up the performance of whole industries, without other member states that would have had their currency devaluated being able to compete on prize.
They probably didn't list any because estimating the upsides versus the downsides is what it's about, and that's very hard to quantify. Suggesting, like you seem to, that there are no upsides to the German economy whatsoever, is just not a serious argument so doesn't actually deserve a serious answer.
Tariffs on Chinese EV cars that would obliterate the German automotive industry and economy?
That sounds an awful lot like the Trump whining about being taking advantage of while bullying countries around the world to do his bidding.
This is the same argument Trump is using to blow up America's position in NATO.
Maybe they're talking about the protection of Israel
It's one of the idiotic "our tax money is spent for bicycle lanes in foreign countries" mindsets many right wingers share in Germany.
Just because you accusse people to be "right wingers" because they don't want to fund bicycle lanes in foreign countries doesn't make them wrong.
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"?
I agree with your characterisation of what is going on, and at some point, the EU states will have to decide for full fiscal integration or for removing the common currency. You can't have a common currency without a common fiscal union. So we either have to integrate more or desintegrate more, this inbetween we have now is not working very well. Speaking as a European, not sure what is better.
Not related to the comment, but in general I agree with you.
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.
Even more centralized than the USA? That must be an outsider's view. You are aware that each state has its own tax laws? Corporate laws? Even criminal laws and traffic laws? And so on? Obviously there is federal law, too, but that's more of an umbrella covering all states in addition to local laws. The USA is a federation, just like Germany, Switzerland, or Austria are federations, and one common complaint you get out of these nations all the time is that they are not centralized enough!
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.
I recently became much more pro-total-unification, so let me give you this counterpoint: individually, European nations are no match to the major superpowers, neither economically nor militarily. We'll get gutted by divide-and-conquer approach. In contrast, bound much closer together (particularly with some form of pan-european armed forces), the EU would become a proper global superpower and a counterbalance for the USA and China.
There is not a single example of a multiethnic or culturally diverse empire or state that was successful after the rise of nation-states at the end of the 19th century.
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.
You cant really believe any of the EU countries actually want to work together? The EU was only possible with the premise of countries keeping their autonomy. Believe me when I say that us Germans would rather go to war than merge with France, just as an example.
>> For the people that don't know the topic:
>> - 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.
Funding other member states to be able to grow may be labeled waste, or investment on creating new markets for Germany.
That's the same fallacy as claiming that rich people save money by donating to charity.
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 seems that in your worldview value and wealth does not increase, just changes hands.
This calculation is flawed. German state collects much more than 5€, because there is VAT etc and, of course, employees of that company pay income tax from their share of that 100€ they just got back.
What people like you dont understand is what we get back from investing into foreign countries. We dont just build bicycle lanes there because we are such nice people.
Can you please explain (ELI style) the great benefits German taxpayers have from the bicycle lanes in Peru?
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National sovereignty, like "we are able to feed people with food grown on our soils?"
Mercosur anyone?
To be fair: our soil would greatly benefit from being allowed to rest for a decade.
In parts of Europe, our soil essentially depleted. I recommend reading.” 100 harvests.”
This can happen without putting the most part of intensive payload in a form of external dependencies that can be cut at any point by many factors, while losing all the skills and knowledge on how to effectively plant and harvest. Qualified farmers don’t appear magically over night, let alone people with the passion required to invest their own life into it.
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?
I've asked before - I am not clear what the massive boost is other than saving a few days or weeks at the beginning. I believe all taxation, labor compliance and other such regulation is still the same as the status quo. The one time ease of setup doesn't seem to be worth the ongoing hassle of dealing with the same crap, just with the added friction of a new and unfamiliar entity structure. What am I missing?
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Its important to understand the context. Germany, and Europe in general, is basically like a falling empire. It will be less and less significant and life won't get any better than it is relatively speaking. The same will almost certainly happen with the US, but first goes Europe.
Unfortunately citizens and therefore ruling elites of empires fueled by relatively extremely high standard of living for decades in comparison to the rest of the World always have very hard time swallowing their national pride. They have built very elaborate conceptual framework of linking their nationality to the level of relative success, fueled by politicians who want to make people feel good again about their nationality.
Just look at the news, almost everything directly or indirectly is linked to the concept "nation".
And in almost all cases of empires a natural consequence of their fall is war. So, it is very important to set expectations right.
Are you foretelling the dissolution of the British Empire which happened many decades ago? Are you saying Algeria will soon be free of French colonial rule? Is your middle name Nostradamus?
It isn't prophecy. The Harvard Belfer Center study (Thucydides's Trap) analyzed 16 cases in the last 500 years where a rising power challenged a ruling empire: 12 of them ended in war.
The UK is actually the perfect example of this danger. The British Empire didn't dissolve peacefully - it was effectively destroyed by WWI and WWII while trying to suppress a rising Germany.
The subsequent transfer of hegemony to the US was a rare statistical anomaly (a "special case" driven by shared culture and total British exhaustion), but the Empire’s fall itself was catastrophic.
The pattern is violence, not peace. And remember that other aspiring nations to maintain it's position as Empire actively acting to destabilize situation in other states. The reason is simple - it is easiest way to maintain their status.
Brexit for instance was a boon for everybody but UK and EU. There is clear data already about Russian intervention. Recent overt US intervention into ensuring UK remaining separate and EU becoming separate. Think about it.
Sure, but my point is that all that is in the past. The British Empire already fell, and so did all the other European colonial powers. These days, when I think of empire, countries like the US, China or Russia fit the bill much more than the EU, which is struggling to reach that level of integration and influence.
> These days, when I think of empire, countries like the US, China or Russia fit the bill much more than the EU, which is struggling to reach that level of integration and influence.
Of course! Especially because there is no unified army control.
But this requires giving more context. We can't forget that there are ways, especially ways made by empires, to force other nations to go to war not only as an ally but also to make them less relevant and take a hit also.
One of the main factors which makes this more probable, is what op mentioned, the raise of fascism and combatant militaristic attitudes exacerbated by the fact that their own nation / empire is a falling empire. And EU didn't fell yet, it is huge economy with more people than the US.
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As a Dutch person I never understood this push until someone told me (and this is true in 2026!!!) that if you open a LLC (Gmbh?) in Germany you have to physically go to the notary and have a person READ OUT all the statutes to you.
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.
This is true of all contract notarization in Germany (even when buying a house, jesus that is a slog), and although it is a bendy-banana level silly thing that people focus on, isn't actually the biggest problem in company founding here. MUCH more problematic is unfavorable tax rules making equity compensation difficult, capital requirements, legal/notary fees, and an investor class that is notoriously skittish.
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.
This here is the problem for most of EU countries.
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..
These trade unions are notorious for that. I worked as a labor legal advisor and especially the unions for temporary employment agency start 'barking' and demand loads of money (even from years back). Sometimes it's not even clear which union is applicable.
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.
Yeah our case was strange because we develop chips and design software related to it. Belastingdienst categorized us wrongly as metalelektro, and we got this guys (Cometec) within two weeks of that. In the meantime we have applied this sector assignment to be corrected, which eventually happened while we were getting threatened into bankruptcy by these guys.
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.
Yeah, that stuff can be scary, I understand. It might almost feel extortionate. You had labor lawyers look at the applicable CAO and pension rules?
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?
> The Netherlands does not want entrepreneurs, they want everybody cozy at their jobs at some big company.
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.
> finding a representative of a trade union
> 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?
> Isn't it the employees' responsibility pay for their union membership?
No, contributions are handled by the employer/company
Individuals pay like 25-30 Euronth contribution, which is tax deductible. Employers can pay a lot, like 10% or more, which is often going to a social security fund.
That's crazy. Notarization in Estonia can be done entirely online using a digital signature, just like everything else here is done (including voting, getting married, getting divorced, filing taxes, opening/closing a company, etc). From all I hear Germany is still stuck in the 90s for some reason.
90s is charitable. Most important thing here is that nothing changes. Everything new is considered suspicious.
More like no one is willing to stick their neck out politically to argue for the positive public policy changes, or challenge regulatory interpretation needed to make real change. Plenty of people see the problems, and even want to fix them, and get stymied by political processes that abhor actually having to argue for change to electorate.
The weird thing is that, at least as an Estonian, I would've never expected this from Germany. Italy, Spain? Sure. Germany? That just feels weird.
Germany is incredibly under developed in the digitalization plus the amount of red tape to do even basic things is also very large as well. Getting rid of these things takes a lot of will power and at the moment there is very little.
Germany never thought it would be in the current situation - decaying health care, pension system, cornerstone industry in decline, lack of digitalization, the list goes on. Massive reforms are needed, action is needed, but there is too much inertia in the system to change anything quickly.
Smaller countries like Estonia have the ability to be much more nimble.
Fun fact, the Bundestag is one of the most representative parliaments in the world thanks to MMP. Is the executive dysfunctional? Is it the federal split into 16 tiny states causing this?
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?
Yes somehow they believed the 90s continue despite zero public investment. They talk about the dangers of debt for future generations, but they are silent about the infrastructure debt they are saddling their children with by not investing on any serious scale.
Just wait until you try to use their trains
Lots of systems are stuck in very old ways of working and using humans as cogs. My American utility bill has a typo in my name that is not there in the online system through which I opened my account; a human in a back office read text from one app and typed it into another. Maybe there was even a piece of paper involved.
I can also listen to a notary online in Austria. I just absolutely do not want to have the notary involved in the first place.
I agree. The notary process is a bit annoying, but it only costs 500-1,000 euros. Yes, that's not ideal, but if you're building a proper business, that shouldn't be an issue. You can typically get an appointment within a week, no matter where you are or where your company is registered. However, once the notary sends your documents off, it can take days or weeks for the registry courts to handle them. You have to register with ten other places yourselves, and there's no guidance. There are different forms and requirements, and the yearly costs just for a basic tax declaration are in the thousands. They can be 5-10% of early startup expenses for no good reason. There are also some shady setups, such as a private company handling the company registry for the state. You have to pay this company each year to publish your books. Accessing that data still costs money, except for the largest companies. It doesn't help with transparency, but it is a public-private rent-seeking nightmare that (possibly) arose due to conflicts of interest among certain politicians (the company's CEO has a higher-level position in political party) and lobbying.
In the UK there's an API https://developer.company-information.service.gov.uk/overvie... and it costs £50. https://www.gov.uk/government/publications/companies-house-f...
Why is Germany ten times less efficient?
Germany really wants you to be a sole trader with unlimited liability, and treats a liability shield as something you shouldn't have.
> but it only costs 500-1,000 euros. Yes, that's not ideal, but if you're building a proper business, that shouldn't be an issue.
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€.
Looks like as per 2022 it is possible to register a GMBH in Germany fully online https://www.brak.de/newsroom/news/gmbh-und-ug-koennen-ab-1-a... also https://www.ihk.de/stuttgart/fuer-unternehmen/recht-und-steu... here are the online notaries: https://online.notar.de/
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 founded a UG and a GmbH in 2024. It took me 3 months total including visits to the notary (who charges a non-insignificant sum for their services).
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.
The bank issues/refusals may have something to do with FATCA. If you have anything to do with the US in terms of taxes, many EU banks don’t want you as their customer. If it’s a subsidiary of a foreign company, then a lot of paperwork is required to prove that the foreign owners actually exist.
With experience and optimal prerequisites (good connections to a notary, single founder with default bylaws and no asset transfer into the company) you can do it in ~4 days, e.g. for a holding company.
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.)
> you have to physically go to the notary and have a person READ OUT all the statutes to you.
I guess, you've never bought a house in the Netherlands then, because it's the same exact process
That is beyond hilarious lol. Finally found something the UK does better than the Netherlands ;)
I never understood why people focus on this "reading aloud" so much.
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")
What does reading it aloud make a difference to you reading it yourself? You can still claim that they misspoke or had an accent and you misheard or any of a dozen other excuses.
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.
I am living in my second house I bought and they absolutely did not.
They just confirmed I was buying a house for X.
They did not read the whole thing.
A reading is mandatory (art. 43 WNA), but a party may opt for a limited reading if it declares that it has read and understood the content.
So it is not mandatory then, lol.
> Personally I would not create "EU-INC" but just make all local entities legal in every country.
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.
I'm surprised that Germany never relaxed the in-person notarization requirements during COVID. A lot of jurisdictions around the world did change their rules to allow remote notarization.
They did. This can be done online since August 2022.
Interesting, thanks! Apparently it requires a German eID-enabled ID card (or compatible EU ID) and doesn't include transactions involving real estate, but still it's progress.
The German eID system had a bad start but it works fine now.
Same in the Netherlands for BV's. At least a few years ago, maybe it changed...
All of the heavy BV requirements changed in 2012. You can now start a BV very quickly, if you want you can do it online, and without any minimum capital requirement.
It's the same in the Netherlands.
There is European legislation since 2024 that allows 'digital' notaries (Directive 2019/1151). Not many notaries support it though.
In the Netherlands it's much simpler. The notary only has to identify you for their record keeping, no mandatory reading of things etc.
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.
Not anymore, Germany has a streamlined online notarization process for creating a simple GmbH now.
I've recently managed to get everything done in <1 week, including bank account.
Progress!
If only it were that. You have to put up 25000€ in capital and pay absurd amount of fees to the notary for essentially being a text to speech translator.
The minimum capital requirement is the whole point of a GmbH. If you don't want it, you can found a UG, which is the same thing with no capital requirement.
If both are the same what’s the point of having 2?
Trustworthiness. You know a GmbH has at least 25000€ you can sue them for. And a UG has to put parts of their profits into becoming a GmbH, so eventually everyone big enough is a GmbH.
In USA, I had to get paperwork notarized to have the local water utility open an account for me.
> 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.
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.
Yes please! I tripped over this recently. It's a bigger deal than it might seem.
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.
> 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 :)
Finally something that feel like removing some borders. On the long term it could bring a lot of positives changes, even breaking or displacing nationalism.
And here I am picturing what could look like the new European far right and far left...
> This is all because the national systems still sort of assume that you'll live and work and stay inside one EU country.
It’s more because taxes and the judiciary are bound to countries.
This doesnt fix the issue with taxation right? You would stull have to figure out where to pay taxes if you have customers from different countries.
What issue? VAT is paid by the user (collected and remitted by you) and differs by country (used to be hassle, easy today), but the taxes you pay in your country for your company is the same regardless of where the users who paid you are based (assuming there isn't something country-specific about that), it's more about where your company is tax-resident.
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.
Yes the issue is i form company in Estonia because i like their non distribution taxes. Or in czechia because i live there. Then move to spain. And they decide to tax the company in spain… with high taxes.
I mean if you now live in Spain, then you need to pay taxes in Spain, because that's where you live. This makes sense, does it not? Or is the expectation that you shouldn't pay taxes where you live, only where your company that you work for/in is based?
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 :)
I think they mean that the Estonian company they run now has to file tax returns and pay taxes not only to Estonia but also Spain.
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!
Indeed, the current state of affairs is rather sad.
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.
It’s somewhat similar in Finland.
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 only practical option
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, but some companies need employees on paper. When they do custom based software and want to apply for a job, there is often a number of heads you need to employ.
Now move to an actual border area. Thanks to Schengen you can travel freely back and forth, sure, but your headaches compound.
Yeah, you should pay taxes from where the company is run. Basically if you have one person company. In a place it “does” business. But i want estonian company for the ease of doing business and for to hold profit, for reinvestment later. I dont want to deal with spanish/german authorities if i move around and want to grow business. No government competition is what they want. Because they cant win in square fight.
> the Estonian company they run now has to file tax returns and pay taxes not only to Estonia but also Spain.
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.
> As long as I don't get taxed on the same money in both countries, 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.
The Estonian company pays the Spanish resident money to them personally. Indeed it is normal that the Spanish resident has to deal with the Spanish taxes on this money only.
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.
> 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.
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?
For labour - the laws of where that labour is actually being conducted are the ones that are followed. Spanish prosecutors can for sure bring a case against an Estonian company if they are not. In theory at least.
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?
> where that labour is actually being conducted are the ones that are followed.
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.
> So in that particular case, would be in both Estonia and Spain, just so we're on the same side?
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.
I really looking forward to this! I love being in the EU and I really like living in Germany. But creating and operating a small company in Germany is a nightmare, I hope this can give smaller EU companies agility and frictionless setup and operation so they can focus on building products and providing services to their customers.
Sounds like a German problem. When I last set up a company in Sweden I literally went to web UI and clicked "Create Company" basically, filled in some details and it was done. Similar experience in Spain, fill out 2-3 forms and it's done. How much more process could the German government really add here? Reviews and interviews, or what exactly is the bureaucracy you're complaining about here?
It takes 8 weeks from start to finish to be able to get paid for your first sale as a German limited liability company.
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.
> It takes 8 weeks from start to finish to be able to get paid for your first sale as a German company.
You can bill as soon as you started the process afaik
You can bill, but the company owners are completely liable until the process is completed. Then the liability goes over to the company. Quite the risk if you ask me.
Not fucking-up in the first 8 weeks does not seem too difficult to achieve
It’s not difficult to achieve to setup a company within 15 minutes too but here we are.
If you're starting a business from scratch, that's 50% of what you do, and it lasts longer than 8 weeks.
As soon as you talk to a notary to prove that you're really opening a company you can get the provisional business license, or whatever they call it, to open a bank account. After you open that bank account you need to talk to the notary again to start registering the real company. Then you need to transfer the bank account from the place holder company to the real company.
I may be misremembering the exact steps because I tried drilling all those memories out of my head as soon as I left Germany.
What type of company structure was that?
gmbh or UG, takes about that time to set up, you can start billing before, but still... this is a lot of time of manual paperwork.
But you could choose other forms, no?
That's great to know! In Germany it involves a lot of physical paperwork, going to a notary to certify the creation, taxes are a nightmare, every change you need to make again you need a notary. It's so frustrating!
> How much more process could the German government really add here?
Hahaha, good one, little padavan...
Never underestimate the power of german bureaucracy lol
> Similar experience in Spain, fill out 2-3 forms and it's done.
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).
I'm pretty sure Sweden is the most business friendly country. its why so many people move their business from Norway to Sweden.
Company formation in Germany requires identity and statute checks by a notary. You can nowadays do that remotely via video appointment but it’s still a bit of a hassle and delay. It’s not as bad as people claim, or rather: if people already have difficulties with that step I wonder how much fun they will have with “bureaucracy” later on.
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.
Friction is a death by 1000 cuts. Its a week here, an in person appointment there, another 2 weeks to send in a different ID - all of that adds up to an environment where people are reluctant to do anything new.
I have personally founded multiple successful German companies and non-profits, and have advised dozens in doing so, and yeah I really don’t mind if those that are reluctant because of one appointment to not start whatever grand business idea they might have, and doubt that they will make it elsewhere. Not everyone with (maybe) good ideas is made to run a business.
Unfortunately it's likely that Germany will reject this change. Incorporation in Germany is highly bureaucratic and it requires physical notarisation. Its not a mistake, Germany has an incredibly powerful notary lobby that has already announced its opposition to this.
https://www.bnotk.de/en/tasks-and-activities/magazines/bnotk...
Lobbies whose only purpose is to sustain themselves even at the cost of maintaining friction should be made illegal.
Maybe you could create a ballot initiative for the next election, that would disband the lobby? See how the people vote.
You should lobby for this
> creating and operating a small company in Germany is a nightmare
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.
Can you elaborate more? I am self employed electrician in Bavaria using simple Gewerbe. It is straightforward at the beginning. Literally hundreds of webpages describe the procedure. It is obvious, that growing the company into GmbH with own VAT number increases the complexity. But I haven’t seen it other way in Europe.
I had my experience with bootstrapping a self founded UG (Unternehmergesellschaft), and the process was long (about 8 weeks), involving me getting support from a company (firma.de) to help me prepare all the documentation which involved a lot of physical paperwork, then there's the visit to the notary which is required. After you do that, you need to register with the Finanzamt, and then you start finding out about all this other registries you need to pay and register to, or that you're automatically registered, but you receive separate invoices.
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 :(
The question is always the same: do you really need UG/GmbH at the beginning? It’s typical rookie mistake. I did it too, sold the company for 1€ to some shady people at the end. Gewerbe with 40000€ in the company’s account does not have the problems anymore. And the expensive tax consultants are just another cost of doing business in Germany. Ok, the quality of Finanzamt clerks varies heavily depending on location. Current town has nice ones.
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.
Agreed. In case you do not have big investors, just register as an individual entrepreneur, get a bank account and get going! It can be turned into a LLC/GmbH later if business goes well.
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?
Can you recommend a tax consultant that charges 200 EUR/month including preparing the yearly statements?
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
It's a good price because the yearly statements for an LLC/GmbH are costly. We pay about 200/mo for accounting - with some more invoices :) -, 100/mo for payrolls but also the yearly statement alone is more than 2k. You can save that by not having an LLC - I personally think the risk in many software businesses is quite low. And some risks must be accepted as an entrepreneur...
Maybe I should have taken another road considering the size of my operations, unfortunately I was wrongly advised when starting up, I spent 1k with a Steuerberatung for advice on what was the proper structure for me, and still… I think they just adviced me the option that was gonna cost me the most to operate.
Lesson learned I guess!
I visited many lectures about business at the university, participated at Munich business plan competitions and all the time holding structure GmbH owning other GmbH was the best solution. The reality is that this is best solution for medium enterprises, for the bootstrapped start it does not matter. If I can’t take off as crappy Gewerbe the expensive holding will not help me either. Learning was not free.
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.
Some tax consultants are very shady, and some are really arrogant. I'm currently looking for one as we had some disagreements on pricing with my previous one, and many won't even take me due to my volume, or maybe because I ask to speak English, idk...
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.
> I had my experience with bootstrapping a self founded UG (Unternehmergesellschaft), and the process was long (about 8 weeks)
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.
But that’s the thing, even though it took weeks I spent a non insignificant amount of euros to set it up, I think it was nearly 2k at the end; and to make it quick would probably be another K or so?
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.
In the UK, it took me half an hour and 30£ to open a Ltd, which I think is the equivalent of a GmbH.
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.
I think GmbH's have a minimum capital requirement so not entirely the same as UK Ltd which can be opened with £1 of assets.
Possibly closer to the US Inc?
In Germany you also have the UG which is like a small GmbH, with 1 eur minimum capital requirement, that is if you like like the 1k (and up to 2k) it cost to set up.
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I wonder who owns this eu-inc.org website and is selling the merch.
In the ToS it states: >These Terms are governed by the laws of the State of California
Yeah, I think there is some confusion in this thread. eu-inc.org isn't an official source or anything, though von der Leyen did say "EU Inc" in her speech at Davos. The European Parliament specifically mentioned not liking "incorporated" because it was American terminology preferring "Societas Europaea Unificata" instead which is pretty funny.
Reminds me of all the official sounding websites with short domain names purporting to explain the purpose and mechanisms of the GDPR, which were almost all operated by advertising companies or industry groups representing them.
One of them is https://klinger.io who has been lobbying and working on this EU Inc topic for a while if you follow him on Linkedin.
The FAQ states:
> Imprint: eu-inc.org, Factory Lisbon, Av. Infante Dom Henrique 143, 1950-406 Lisboa, Portugal
Which is odd, because Germany is the country that requires the "imprint", and it absolutely must be labelled "impressum" and not "imprint".
Can you point to any law which states that it has to be Impressum? Could not find anything and I doubt that this naming is a law.
Also: Germany is by far not the only country which requires a sort of imprint.
It is by some guy on X who memed about the EU Inc for a long time.
Someone in Silicon Valley really wants this to happen :-)
> The ultimate aim is to create a new truly European company structure. We call it EU Inc., with a single and simple set of rules that will apply seamlessly all over our Union. So that business can operate across Member States much more easily. Our entrepreneurs, the innovative companies, will be able to register a company in any Member State within 48 hours – fully online. They will enjoy the same capital regime all across the EU. Ultimately, we need a system where companies can do business and raise financing seamlessly across Europe – just as easily as in uniform markets like the US or China. If we get this right – and if we move fast enough – this will not only help EU companies grow. But it will attract investment from across the world.
> 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.
As a Swede the third one is terrifying, unifying the energy market has been catastrophic for us, both price and environment wise. The latest is added taxes due to choke points designed by EU from the first place..
As a Swede(working in the energy sector no less), Sweden has only themselves to blame for their catastrophic decisions, like killing a world leading nuclear industry. Don’t blame Germany for Swedens incredibly stupid decision to shut down functioning nuclear reactors prematurely.
Why was the German shutdown premature?
I was speaking about Sweden.
I think you’re getting cause and effect wrong.
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...
It's the Euro all over again, mostly because of this:
> 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?
Well it didn’t work for the Euro, and that didn’t require building massive on demand infrastructure that degrades over distance. Socialism for people only work within the confines of a society, 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.
> Well it didn’t work for the Euro
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.
Equal in that hey suffer together? When even the SEK outperforms the EUR in times of distress you know it’s incredibly bad. Is it better that all of Europe sinks, maybe, but I’m happy I’m not losing my job because of pension plans in France or financial neglect in Greece, and I’m sure they would say the same if roles were reversed. And to be clear, it’s not about the people, but how governing is done.
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).
> Equal in that hey suffer together?
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.
> When even the SEK outperforms the EUR in times of distress you know it’s incredibly bad.
Currencies aren’t an asset. They don’t “outperform”.
If the Yuan had “outperformed” the Chinese economic system would have collapsed.
The SEK has been underperforming the Euro for years (see the massive dip against the DKK which is Euro-pegged).
Wanna tell us more? Why has unifying the energy market been catastrophic for Sweden?
I may tell from Polish perspective - loosely speaking: Germany and Austria used to share single bidding zone: electricity was produced by wind at the north and then consumed by factories at the south. The problem: no sufficient grid connection - Polish and Czech grids were used instead, what caused major problems - loop flows. It lasted from 2001 to 2018.
Unification needs to be real, including grids, not on paper only.
Sweden has plenty of cheap hydropower. But as prices are now tied to countries like Germany which made catastrophic decisions around energy, Swedes have to pay much more than if Sweden had an independent energy market.
Presumably because Sweden is selling some of that cheap power to Germany.
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.
That has nothing to do with the EU, it's just capitalism. Even if the EU wouldn't exist, the energy companies would have found a way to sell the cheap Swedish hydropower to Germany.
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In that case it sounds like "unification was bad" is an unfair characterization. Unification was bad by proxy, due to the bad decisions of Germany. If Germany had made better decisions, unification would've been good as Sweden would've had lower prices on a larger market.
”Bad or good by proxy” is how all policy plays out though, your ideas mean nothing if reality says otherwise. And Germany going coal was well known by time of unification (one might think it was because of that, tinfoil hat on).
Personally, I try to not think of the world in binary terms. I don't find "unification bad" useful.
Having to pay more because of Germany going fossil fuel like crazy. When there’s no wind and it’s dark they cause most of EU to suffer since the cost of their coal plants are so high. We also send a lot of green energy out of the country only to import coal powered from Denmark (not as major, mostly happens due to high consumptions) And we’re also getting a price spike fee, don’t dare to put on the dish washer when your neighbor is!
All this in a country where electricity was almost free (to be fair, our dismantling of nuclear doesn’t help here)
Energy is expensive because burning fossil fuels is expensive due to taxes. A coal power plant pays around two times more for emissions than for the coal itself. They're trying to solve a problem which they have created themselves in the first place.
So you suggestion is to remove the taxes and go back to mostly using coal for power? Or what's the suggestion here? Because those taxes are there because of the pollution, so unless you have better way of getting rid of the pollution yet using coal for power, I'm not sure there is something better than trying to tax it away so other source can be focused by business and industry instead.
Capping the price of CO2 emissions at a more reasonable level like 10 - 20 euro/t CO2 just like it was 10 years ago could be a decent compromise.
Decent compromise to what? The group who want to pollute the world because it's cheaper? Doesn't sound like a compromise many of us would want.
Countries outside European Union don't care about global warming anyway. It's a futile policy.
that is simply untrue. China, for as bad as it has historically been in terms of environment, it has invested waaaay more than anybody else in clean energy [1]. It's a game we are all in together and things are moving forward, albeit too slowly.
[1] https://www.iea.org/data-and-statistics/charts/annual-invest...
You might be interested to learn that both of those statements are very wrong.
So? Countries outside of EU don't always care for human rights or other things we find important.
That doesn't mean we shouldn't still aim for the values we stand for.
Global warming is ultimately a global problem. It doesn't matter if you reduce your CO2 emissions if others aren't following.
That is good, because it is a lie that others are not following. People love to point to China for their emissions, completely avoiding that China, as the workbench of the world, essentially is burdened with the emissions of the world.
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
It does matter to follow through with your values though. Humanity isn't supposed to be just minmaxing economical output, a common set of values that we strive for is much more inspiring than burning everything to the ground, and leaving a world of ashes for future generations to capture maximum economical output right now.
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.
You are right, it is a global coordination problem. There are two moves: Cooperate (i.e. reduce your CO2 emissions) or Defect (burn baby, burn).
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):
If Europe cooperates and the RoW cooperates, nobody gains a relative economic advantage and our world doesn't burn.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.
Indeed, but if everyone starts thinking "No one else is lowering their emissions so why would I?", how are we supposed to ever make any sort of progress?
Someone doing something is always better than no one doing anything, can we at least agree on that?
But it is by no means obvious that carbon taxes are the right path. Targeted investments in low-emission energy sources might work better.
Fair point, I agree, that isn't obvious. What is obvious to both of us (I assume?) is that pollution has to be lower, not just in the EU, but across the world. But we (Europeans) can mostly just influence what happens inside of Europe, EU and our countries. Hence, we do what we can to reduce it, where taxing it is one approach.
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 :)
> But it is by no means obvious that carbon taxes are the right path.
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.
Energy is expensive because fossil fuels are destroying the only planet we have.
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"...
Europe is energy poor. We will never be able to compete on raw cost with the US, China and similar.
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.
I don't believe this is true. The US has also seen a big growth of the renewables in recent years and they have managed to do it without carbon taxes.
That tells you how cheap renewables are today, especially when American energy markets generally are more monopolistic in structure.
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.
That is a dubious claim of the accounting chain for expense of fossil fuels, which also ignores defensive tariffs for energy sources like Chines manufactured solar, wind and batteries. Though maybe it speaks to more beaucratic process around the energy not the core energy costs itself.
And how pays for the healthcare that's indeed for the people downwind of that plant? How much does lung cancer treatment cost compared to coal?
Unfortunately this does not override employment and tax laws - so you still cannot hire someone as an FTE in Paris, from a startup in Berlin for example (without them being a freelancer, or you opening a payroll / tax office in France).
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.
You still need a tax accountant in France to register the FTE and file paperwork with the tax office and social insurance.
You can, Deel etc. make this pretty easy.
Deel is one of the reasons why my policy for working for foreign companies is "B2B or I'm fucking off". Everyone I know (employees/contractors using it, not the other side) who went for it hated and regretted it.
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.
How certain are you of this? I only have anecdata, but when I tried to use a 3rd party agency to hire someone in France, from Ireland I got the process through several layers of management, up to and including the CEO and COO of my American employer, and HR, and legal counsel, only to be warned away in the most emphatic terms by external counsel. They told us of the risk of large fines and jail time in France for executives of companies doing this.
As I said, anecdotal, and a few years old.
> They told us of the risk of large fines and jail time in France for executives of companies doing this.
Just for hiring someone from France?
just for hiring someone in France via a third-party employer of record.
[flagged]
"Digital signatures are a Jewish conspiracy" is not something I expected to read in this website
Correct, it is a factual conspiracy.
Ah yes the perfect scapegoat to blame for your miserable life
Jude
I’m from Croatia, and starting and running a company here is expensive. Estonia makes it much easier, so you might think: why not open a company in Estonia?
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.
Even if you incorporate in Estonia it wouldn't change anything . Because the company would still be considered tax resident in Croatia .
>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)
If the clients are cross border - there is no threshold, you have to charge the VAT rate of the country in which they are located from the start.
Estonian fiscal law doesn’t apply if your company operates from Croatia. The only reason you can’t do this in practice is because you’ll have a hard time finding a Croatian accountant willing to work with your Estonian company. That’s something EU-inc aims to address.
EU like making new regulation. There are simpler steps to make doing business here easier:
-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.
This is the way. Refactor the law.
@dang This post is an Ad for unofficial merch, profiting from an ongoing news story. Should we change the URL ?
https://ec.europa.eu/commission/presscorner/detail/da/speech... https://tech.eu/2026/01/20/the-european-commission-launches-...
This submission originally did link to https://ec.europa.eu/commission/presscorner/detail/da/speech..., but was later changed to this. Or two submissions (one for each URL) was linked/merged. But something used to link to the press release rather than this website, FWIW.
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.
[deleted]
> The grassroot movement is from https://proposal.eu-inc.org
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?
Apologies, misred that part, but I maintain the rest of my argument.
This is unofficial, pushing for merch, 5 lines of info page, and should not have replaced a post about more detailed news reports.
How can you maintain the rest of your argument when the entire basis for said argument been proven wrong? It's not "profiting from an ongoing news story" when they literally created what this news story is about!
That's not someone profiting from the news story. It's the website of the group of people who were pushing that, talking to the EU and lobbying for it for a while.
It's even linked on the website of the organizers behind it https://klinger.io and https://www.linkedin.com/company/eu-inc/about/
@dang is a no-op. You need to email him or the other main moderator to get their attention.
This is the official page of the EU-INC lobby group.
This is a great initiative that I've been following, but the stumbling block is still 'local taxes [and employment]' - that's still 27 different tax codes to deal with, submitting returns to in 27 different languages.
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)
Agreed. If the CFC (controlled foreign corporation) rules still apply for founders in EU-member states, it will fail.
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.
I think it should be stupid simple to create a small company, Sorry, "stupid" is important here, anything lesser would not convey the meaning against the EU background. Something like a proof of identity, a one sheet stating the structure of the company (a sole proprietorship or a small LLC with limited funds and employees), the nature of the business (e.g. "software development"), and a moderate processing fee. The process should be serving a notification, not obtaining a permission.
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.
So, a privately held SE? https://en.wikipedia.org/wiki/Societas_Europaea
Maybe read https://en.wikipedia.org/wiki/Societas_Europaea#Formation.
I always heard that the issue with startup investment in Europe was the general lack of capital investors willing to take Hail Mary risks on founders with a wild idea and maybe little experience. The market is far too risk-averse for a grassroots early-stage startup scene.
How would this organization address that fundamental psychological block?
> How would this organization address that fundamental psychological block?
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.
How is that in the US right now though? Years ago there was a wacky startup of the week on HN raising X amount of funds, nowadays it feels like there's... nothing. Or it's just underreported on HN. Or the billions that funded a hundred startups have all gone down the AI drain.
I acted as a technical advisor on a raise in Q2 2025 and saw figures from the EI Market Research Centre that Q1 Series As & Bs totalled ~$35 BN USD vs ~€4.5 for the EU as a bloc, so very roughly an order of magnitude greater. 2025 was considered a mid year for US VC capital deployment but a good year for the EU.
I suspect HN just got bored with reporting on stupid startups.
this is not the only blocker for European startup success. We need to address each blocker separately.
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.
> The market is far too risk-averse for a grassroots early-stage startup scene.
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".
> no expectation for companies to succeed or to turn in profit in the US, and hasn't been for over a decade.
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.
The US continues to produce "most valuable companies" by the absolute non-sensical value called "market share" and "market capitalization".
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)
UK founder here in cybersecurity. I’ve bootstrapped and exited twice.
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.
"proper" probably means backed by a member state, founder is a former gov worker, product is being co-developed by a local university, is based on academic research, founding team has PhDs and has 15 large enterprise customers lined up
This is basically just a meme at this point.
I think a big issue is that Europeans who want to invest in early stage VC do so in the States, because everything is geared towards entrepreneurial success there. Changing the business environment across the EU is necessary but definitely not sufficient to kick start the VC-backed startup scene in the EU.
> big issue is that Europeans who want to invest in early stage VC do so in the States
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.
This seems like a tautology - the VCs you've worked with in Europe invest in Europe.
However, most HNW Europeans who invest in early stage do not invest in the EU and therefore you will not have worked with them.
> This seems like a tautology - the VCs you've worked with in Europe invest in Europe.
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?
> 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?
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.
> because the capital deployment from EU HNW is overwhelming deployed outside the bloc, largely in the US.
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.
As politely as possible, your experience is simply wrong, I'm afraid to say. US angel/seed round investing by EU-resident HNWs alone exceeds all angel/seed investing in the EU, by quite some margin.
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.
I think the big issue is that this is what Americans want to believe because it reinforces their exceptionalism. And of course there are Europeans who would choose to believe it because it absolves them of failure.
It used to be the same for founders. If you wanted to raise, you went to SV. SV used to be the Schelling point for funding.
The incentives change once you get access to the entire EU market, either diminishing the risk or increasing the attractiveness of the the market to the point of that risk becoming acceptable
I don't think the VC-based start-up system with pure profit in mind and an exit at some point and then who-cares-about-the-product is something I want to see more of.
Not true. I am an LP in a number of Vc funds.
It wouldn't. I read this as "we gotta try something" but let's be honest, no amount of work on incorporation rules or employee options schemes or whatever they make up next, is going to meaningfully change the culture and attitude of European capital markets.
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.
It's not going to change overnight, no. But it's an important step.
"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...
Please Lord don't let the Austrians any where near this. The Notar system is the the closest thing to outright theft by paperwork I've ever seen.
We paid 3K on a 50K plot of land for some dingus to read a contract out loud.
People are completely overreacting how much regulation there is in Europe here. There is more regulations against monopolies and USA BigTech is always crying about that and spreading propaganda about that. But starting a startup is way cheaper in Europe you won't need funding like in the USA even.
HN users has the wildest takes on Europe. Often completely made up, or something specific to one country made out to be true on the whole continent.
It's pretty funny. Europeans get so angry at US people claiming to have seen "Europe" when they've been in London, Paris and Rome, and yet they (we) do the same thing on lots of other topics.
I think it's just human nature, tbh.
Then why do you think virtually all of the most successful tech startups are U.S. companies? (Excluding Asia, for the purposes of this discussion.) Is it just Silicon Valley network effects?
OK, but how is this going to be taxed? That's where the problem is. Maybe it will be cheaper to incorporate but then what, are individual countries going to lose on their expected taxes?
This would help a lot. Many European startups are strongly local (also in talent search), because while moving is simple, share distribution and ownership structures are anything but, and investors usually don't want to bother with local regulation on that they don't even know.
> On Saturday, I was in Asunción, in Paraguay, to sign the EU-Mercosur trade agreement. It was a breakthrough after 25 years of negotiations. And with it, the EU and Latin America have created the largest free trade zone in the world. A market worth over 20% of global GDP. 31 countries with over 700 million consumers. Aligned with the Paris Agreement. This agreement sends a powerful message to the world. That we are choosing fair trade over tariffs.
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.
The Mercosur deal is frozen now as it's just been referred to the CJEU [0], which means at least 1-2 years of litigation.
[0] - https://www.reuters.com/world/eu-lawmakers-vote-whether-laun...
Hmm, less ideal.
> 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 issue is this sends a negative message to Mercosur member states like Brazil, who are actively being wooed by the US such as by creating a US-Brazil Rare Earths Deal [0] and wooing Brazilian oligarch Batista brothers [1] (the oligarchs who owns much of Brazil's and North+South American agricultural capacity [2] and are the power behind the throne in Brazil) to get near-exclusive rights on distributing Venezuelan oil [3].
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...
The first point already exists: https://en.wikipedia.org/wiki/Societas_Europaea
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)
>The first point already exists: https://en.wikipedia.org/wiki/Societas_Europaea
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.
SE companies can be unlisted, if that's what you mean.
The capital requirements can be changed.
Er, what exactly is this? It's not mentioned anywhere for laypeople like me. Perhaps they should focus on explaining what this project is, before asking for people to spread awareness. How can you spread awareness about something you don't even know what it is?
I agree. It looks very unprofessional. No contact adress. No representative person. No explanation of the acronym "EU-INC". Big buzzwords, visions, clichés and self congratulation.
Which isn't to say that "making commerce cheaper in Europe" isn't a worthwhile goal, it is- but at face value this attempt looks comically inept. "We wrote an email to a politician! Progress due any moment! Like and share!"
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".
There is a pretty good TL;DR on their "In-Depth Proposal" site: https://proposal.eu-inc.org/TL-DR-14d076fd79c581959325c8e52d...
Thanks, but from a quick glance I couldn't find it on the homepage. Also, it's a Notion document, they could instead just write all of these points on their landing page?
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.
> couldn't find it on the homepage
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”.
I would like to see the details on this. The EU has alredy jurisdictions that make it "too easy" to run a company and others that make it exceedingly difficult, and the two are in competition. It's one thing to start a company in cyprus, another to start in Germany.
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'd also like to see the details, it seems to be a difficult undertaking but something the EU really needs. As an example, when I incorporate a company outside of Portugal then the tax authority can classify it as a CFC (controlled foreign company) and tax it very high, and it can lead to double taxation. AFAIK, the rules are quite complex. A EU-wide registry should prevent that, but that might require a EU-wide harmonization of 27 tax systems (plus potential associated countries like Switzerland and the UK).
It’s the 28th regime. Look up societas europaea.
Wow, I was writing about something like having an easy way to create EU legal entity (all be it from India) on a different thread.
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?
Seems like a broader version of what Estonia are already doing with e-residency[1]. Registering a company online in a few hours is already easy in a few jurisdictions around the world (e.g: the U.K.[2]) so this isn’t a particularly revolutionary but the intent it signals is good.
[1] https://www.e-resident.gov.ee/ [2] https://www.gov.uk/government/organisations/companies-house
Ease of incorporation is indeed not revolutionary, but is certainly a good direction.
What is revolutionary (in context of EU of course) is easier business operation across different countries, a real bottleneck for EU SMEs.
> 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?
There's a reason I rarely see local subsidiaries of cool small companies from other EU countries - it's too complicated to open them, have a couple of local employees on a payroll, handle notarization, translations of documents, not to mention labor laws etc.
The bottleneck is having a standardized SAFE for Europe. Global investors must be able to invest without having to understand Italian and Polish corporate law
That's a different thing all together, but a good point nonetheless. Always been dealing with local investors when building startups, because of that.
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?
Glad to finally see 28th getting more traction, I was thinking about it just the other day. Personally, I'd love for EU to introduce more institutions that cut at member state sovereignty in favor of tighter integration. What comes to mind immediately is a 28th regime for employment and personal taxes, so companies don't have to resort to workarounds like employee of record or fake "contractors". It seems that EU late binds making big decisions until all options collapse, current events will probably result in more push for federalization overall.
> with a single and simple set of rules that will apply seamlessly all over our Union
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.
Maybe the implementation will be challenging in one aspect or another but are there any reasons why you would you rather keep the current patchwork?
> 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.
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... )
> quick guide to the differences here
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.
Remember the attempted EU constitution? They discovered at that point that looking too much like a government made the nationalists _very_ upset, so it was recast as the Lisbon treaty (not a constitution, we promise!). A lot of the can't-believe-it's-not-a-government stuff stems from that debacle.
It says "Pan-European" everywhere, but would this include the UK?
Its obviously EU - so not the UK, or Norway or Switzerland or Russia...
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.
It's not obvious to me at all, that's why I asked, precisely because of the use of "pan-European".
EEA applicability might be less obvious than you imply however.
The integrated taxes would be a very big step for the EEA, so would common company law and governance for these entities.
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.
It says "Pan-European" everywhere, but would this include Belarus?
That's what "Pan-European" would imply, actually. Similar to what "Pan-American" means for the Americas.
As the headline statements say “… EU-level …” rather than European, unless the smaller print explicitly mentions non-EU countries such as the UK I would assume that we aren't included.
"one europe" except for all the other bits of europe
Well, isn't it the same for America? America is more than the US. I know the name Americas is used, but that is more like an afterthought.
I dont think this is the same. If you started referring to North America as a name for the USA then it would be equal
Indeed, except for the bits of Europe which chose not to be part of the main part of Europe. That's how it works.
And by "it" we mean both "free choice to be part of the union or not" and "legal jurisdictions".
I don't think you know how continents work. It's a bit like saying Canada isn't "North American".
It is pretty common, when discussing matters of law and business - not geography, to read "Europe" as "the union of Europe" and not "the continent of Europe".
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.
I think you can see from this thread that there is a lot more ambiguity when talking of "Europe", and also pushback against using "Europe" to mean "EU". It's not obvious, that's why I asked the question. I'm not stupid but just living in a different context to you, apparently, and have reasons to push back against this misuse of the word "European".
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 agree that it's "misuse". it's a use, a common use. No pushback is called for. You asked a question about the title that was answered in the title - "EU–INC" means "EU" in this case. It's clear from context, and if that fails from the article. Others have said the same.
I don't "live in that context", I'm aware of it can can use it when appropriate.
No, but the UK already has easy company formation.
Formation might be easy but the laws, regulations and planning required to do almost anything are extremely burdensome.
no :)
>The ultimate aim is to create a new truly European company structure. We call it EU Inc., with a single and simple set of rules that will apply seamlessly all over our Union.
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.
I read through the speech, I'm still not sure if this is adopted or not. I found https://www.eu-inc.org/ which seems to be the origin of the proposal, but mentions a final implementation for 2027.
Just heard about this initiative as a European, I don't have an opinion yet.
> 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.
Because Europeans never share their criticisms about the US
As a parent you have the obligation to let your child know how well you think they're doing ;)
> this is adopted or not
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 summarized all comments and prepared comprehensive discussions summary using LLM for better understanding: https://hn-discussions.top/eu-inc-pan-european-startups/
Isn't there already the SE (Societas Europaea) [0]? How does this differ? Would be good to address in the FAQ.
[0] https://en.wikipedia.org/wiki/Societas_Europaea
The SE has a minimum capital requirement of 120k € so is not within reach for most people. I think this EU-Inc would be a simple structure with a lower threshold.
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.
Per the Wikipedia article, an SE cannot be incorporated directly. It must be created out of one or more national, public (!) companies already formed under the law of a member state.
Not the EU, but the UK:
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 think your partners were mistaken - the requirement for having a company seal and paper company register / minute book went away in both England & Wales and Scotland with the Companies Act 1985, and company formation has been done online UK-wide since the Companies Act 2006.
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.
This + abolish VAT. The amount of money stolen in VAT scams is jn bilions of euros.
This + only pay taxes where the company is founded, not where you live at that moment in time.
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.
Yes please. The whole centre of interest. Form company in Estonia, move yourself to Spain. But hey lets tax the company in spain :D
That's the dumbest stuff I've heard.
This way you avoid incredibly huge amounts of taxes.
There is a reason why cfc rules found their way into atad.
Yes the reason is that the countries cant compete on business infrastructure and taxes. It is basically a cartel.
yea so annoying, and the ambiguity with which the center of business is decided...
This is good, but don't think it will change much. The EU suffers from bureaucracy and disparate rules for each country, which is a pain in the ass for startups, it really needs unification on taxes, and less rules.
How is this different from an SE, which has been existing since 2004?
https://en.wikipedia.org/wiki/Societas_Europaea
> Current EU company structures like the European Company (SE) are made for public companies and ill-suited for startups due to high capital requirements, complex formation processes, and heavy administrative burdens. A flexible, tailored EU-wide entity for startups will solve these issues.
From the FAQ https://www.eu-inc.org/faq
Thank you - it is indeed €120k minimum capital
Then I suggest they make noise to lower it to €1 - much easier than creating a new legal structure
This doesn't solve any issue. Registering a company is already usually pretty simple in most European countries. It's running the company which is difficult due to regulations and stuff.
It was pretty complicated in the Netherlands. I had to pay a few thousand Euro to a notary and do a lot of paperwork. I've heard its worse in Germany.
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.
Please please tell me it's pronounced "yoink"
https://www.youtube.com/watch?v=CJh1hmmLLzw
> Local taxes & employment
Completely and totally defeats the purpose.
This is really great news!
We also need a paneuropean banking & tax system and ideally some paneuropean telephony (plus voip) and internet providers.
Starting a company is not the issue, running costs, taxes, bureaucracy is a huge burden. Take US LLC. It‘s a bargain to operate.
Do you have any in-depth resources on how to start and operate a US LLC as a foreigner?
short: no
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.
Thx. Am I taxable in my country of residence even when the money is kept on the LLC's bank account in the US?
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).
I'm not a tax advisor and most of my knowledge is about Germany, but if you have no physical business in the US, like office and proper residency (decision-making process), you have to tax in your own country. Tax evasion would be easy if that would not be the case. It's not only about profits but even the expenses need to be taxed/settled under e.g. German law.
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.
Thx a lot. Really appreciate you taking the time for such a thorough answer.
Excellent idea. The rules should be the same throughout Europe. However, on the official site (https://www.eu-inc.org/) I see the following line:
Local taxes & employment
I guess there is hardly any incentive to open a company in, say, Sweden vs Ireland then?
I would love to be able to setup in Europe a non-profit equivalent to the Zig Software Foundation.
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.
> 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.
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.
Sure we have non profit companies also in Europe, the question if it's possible to create one to support an Open Source project, and which tax benefits donors can get.
> the question if it's possible to create one to support an Open Source project, and which tax benefits donors can get.
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.
My experience with the US tax system is that you need to get approval to get non-profit status, and more in general I do think this has something to do with the price of eggs in the sense that you should obviously be prevented from being able to setup a non-profit company if what you're doing has nothing charitable about it.
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.
> My experience with the US tax system is that you need to get approval to get non-profit status,
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.
I see, thank you for the info!
EU's strength is in diversity, and von der Leyen is set on killing that.
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".
> EU's strength is in diversity, and von der Leyen is set on killing that.
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.
Diversity of rules also. And a sane amount of inefficiency and contradictions.
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.
I'm skeptical. At least Germanic countries love their bureaucracy. It's an etatism thing.
IMO Europe will lose its soul if it tries to be too competitive. Once it becomes too easy to start a business or raise capital, it becomes easy to spiral into workaholism. Gone will be the days of month long holidays and leisurely pace.
There is a search box at the bottom of every HN page ;)
Already being discussed: https://news.ycombinator.com/item?id=46703877
The way I check for duplicates is to just try to submit it. If it's a duplicate, it'll count as an upvote to the existing one, otherwise I end up submitting it, it's a win-win :)
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.
I submitted that link. In all fairness the link in this post is more accurate. I'm glad to see people are interested. Let's see where all this goes.
I am also looking for a stripe atlas alternative.
Having a EU based one will be great.
previous: https://news.ycombinator.com/item?id=25006716
Germany is your problem. If you’re open to looking outside Germany, there are many options. You can open a U.K. company same day, an Estonian company with e-residency in a couple of days. Germany is uniquely nightmarish.
That's not good advice . If he lives in Germany he should incorporate a German company otherwise he will run into big Issues .
The problem isn’t incorporation - it’s having accountants in your jurisdiction familiar with the structure. You can incorporate in the UK for £50 instantly but you might have trouble finding an accountant in Italy that is willing to sort your accounts out.
It's not EU wide but in France we have Legalplace (https://www.legalplace.fr/) to create a company online quickly.
It's never an good idea especially in an EU country to incorporate outside your personal jurisdiction especially as single founder.
Anybody get a xkcd 927 [0] feel here?
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/
Its not that difficult to setup a company in Europe. Tedious but not impossible.
What's really difficult is setting up a compnay and opening a bank account in the company's name from abroad.
So if it is a european legal entity why they host it on .org which is only controlled by USA instead of using a .eu domain which is a ccTLD controlled by European Union?
Yes, it's in the works.
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.
This is exactly how its going to go. But the reason is not lazy bureaucrats but that a lot of countries fear they will lose out on taxes from corporations currently domiciled in their country. Of course another big source of friction is different labour laws in different countries. And there's no way these are going to be touched. And of course banks will also oppose the unified capital market because they fear losing fees from their domestic customers to better banks in other countries.
In principle this is a good idea.
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.
Can some people share why there is a need for incorparation on European level? Lobbyist fighting for it so but I don't get the problems to solve it.
Of all the challenges you face as a startup, the legal entity you choose is possibly the least consequential. 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.
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!
> investors understand how the legals work (Delaware C-corp, UK Ltd is OK too)
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.
> This is clearly about EU and Europe
UK is in Europe.
I am sorry to break the news, but UK is not in EU, so registering a company in UK is of the same effect as registering it anywhere else outside EU
However it is in Europe.
And yet I'm not seeing an awful lot of advantage of registering in the EU then if this campaign has to exist - clearly there's a big enough friction to registering / running a company within the EU itself.
Fair, probably shouldn't have added "Europe" in there, removed it.
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.
> Of all the challenges you face as a startup, the legal entity you choose is possibly the least consequential.
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.
> Delaware C-corp, UK Ltd is OK too
Neither of which is in EU, which is exactly the point. Should be an EU one which is usable...
The title says "One Europe" and "Pan-European".
This is a EU initiative. Confusingly, EU is often called Europe in spoken/non-official speech. Sort of the same way it is said that Washington does something, when it is the US gov doing something.
You also need portability. As I understand it there's no problem with having a Delaware corp but all your staff and operations being in California, for example. I do not believe this is the case all across the EU! And some localities can have quite onerous formation requirements for no good reason (anything involving notaries, for example - 19th century solution to 19th century problems).
I started a limited company in Spain about 15 years ago. Just the 48h online is huge. It took maybe 15-20 days and visits to the notary, etc. (notaries are usually not available next day, for example). I think Estonia and UK have similar quick ways, but if this is as quick it is definitely an advantage over the status quo. It will affect companies without investors as well, which adds up.
IMO this is half-measures. You wanna a strong EU? Merge the salaries and living standards from the north the south and west to east. Germans workers shouldn't blackmailed by auto-motive companies leaving for Poland unless they accept smaller salaries and vice-versa polish workers shouldn't emigrate to Germany to find a decent salary, pension, etc.
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...)
> It's very simple.
Is it? I doubt it. There isn't a large country on earth where the salaries don't differ across regions.
It's probably the most complex and impossible to solve take, it's not even true in the US or any other place in the world.
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?
This is the least simple thing. Countries aren't even flattened out within themselves, in the EU or US.
You wanna a strong US? Merge the salaries and living standards from New York to Flint Michigan.
Didn't think so.
Ah yes. The simple thing of fixing all societal issues.
Is there a comparison to the SE structure? My main issue with it personally is that it is prohibitively expensive to incorporate.
They have an answer to that in their FAQs: https://proposal.eu-inc.org/FAQ-Glossary-14d076fd79c581d18e6...
> 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.
More info here: https://www.eu-inc.org/
Builtwith reports this website is built with Framer, is this an official EU asset? If that's the case it's also a declaration of intentions.
the FAQ clearly states that it isn't an official EU website, it was used for petitioning the EU to consider this proposal.
Thanks for poiting this out
I have seen promotion of this idea multiple times but every time I read about it I fail to understand the gains.
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.
Have you started a company that took investment from funds located in other countries within the EU? That is the main focus of this idea. Lowering the barrier to investing in startups across EU nation states.
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.
I think starting and investing per-se really isn't the major issue for some time (at least in Sweden and probably Denmark), we've gotten many small business friendly laws over the past 15-20 years.
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.
Yep, same feeling as a Swede with so much being streamlined online, but at the same time I can see how it'd be a nightmare for someone without a BankID (or in Denmark MitID).
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Tell him Victoria refer you
By the time they've figured out how to properly document and annotate the process of removing their collective head from their ass, the US and China will have moved well past completion of several cycles of the AI revolution. The EU is fundamentally broken because they are led by people who have never accomplished things, with credentials from institutions that have forgotten how to teach and train and prepare for the real world. They have fully embraced the credentialism and pompous titles in lieu of competence and effectiveness, have leeched off of their wealthy and successful citizens, and made progress or dynamic change impossible.
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.
Don't forget that you have to pay the for a useless IHK in Germany...
Can you guys please somehow involve Switzerland too? I'm thinkng about moving there and my German employer is like, "No! Even France would be extremely hard, Switzerland is plain impossible for payroll!".
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 :)
Before you move there, for fun, look into what it would take to buy a house there :)
It's impossible here, triple impossible there, so still the same price from my perspective.
Note we already have European Cooperative Society (SCE), but of course its not going to make a capitalist/shareholder fond mindset really appealed.
https://single-market-economy.ec.europa.eu/sectors/proximity...
Doesn't Estonia already offer something similar?
No they don't. The most similar thing would be a SE https://en.wikipedia.org/wiki/Societas_Europaea
Last I heard of it this was proposed as a directive as opposed to regulation, meaning every single member state would have to interpret it and create their own national implementation. Just like with GDPR.
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
I mean, Denmark used to have LLC's and outlawed them some years ago (a thing that my accountant said, paraphrasing "look at all these thieving lawyers getting rich"), so this will mean that LLC's would be allowed again in Denmark?
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.
wasn't usurlla saying this was now law at her Davos address ?
This thing is dismissed because it cites Zensurla von der Leyen in its front page
Europe need to open the pipe to free markets, simply said buy and sell with no damn taxes or restrictions. People is afraid to start a business because of many bullsh.t regulations and taxes, uncertainty and intentional lack of transparency. Doing business shouldn´t be so damn hard, it should not require so many licenses, permissions, burocracy. It should be instead given priority and treated like gold as it is business that move the economy, employ people, create jobs, give you a reason to wake up motivated in the morning and even an incentive and right condition for population growth.
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.
Sorry, but I'm not convinced that the EU is actually capable of reducing regulation.
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...
There is nothing hindering European startups to raise money from all over Europe. Except that Europeans hate to invest in real businesses and love investing in real estate.
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.
> In Europe it is hostility mostly all the way, from banks to regulators to governments, and so on
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.
> They should ask themselves why European entrepreneurs should create their startup in Europe instead of in America.
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.
You don't need to physically move to America to create your startup there.
There might be a cultural component, but as a matter of fact if you want to expand to other countries within Europe you will have to create a local entity or hire through an EOR. EU-inc will solve this.
> American startups and businesses get investor money from all over the world, including from Europe.
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.
seems like a great idea
Since it's inception in 1993, not a single global top 100 company have been created by any of the EU countries so the struggle is real.
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.
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And i thought we already have the EU, Inc. (Davos, Brussles, "The Commision")
Local Taxes… the issue with EU is the taxes and cost of labour.
That's not the issue. If your business is dependent on slave labor and offloading your externalities on the society to make a profit it simply means your business should not exist.
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.
Cost of labour i meant work taxation. You can see the waste everywhere. We could have half income tax, half social security and half health. Instead of taking 50% you your income. We could give 25%. And have more to boost the economy or save for future. EU is in slow death. Dying out, pyramid scheme retirement system mostly.
I'm not so sure about that. Elon Musk and Trump promised something of this sort, created the DOGE department and ended up not saving anything despite claiming to uncover waste.
> 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.
Well the slovak goverment alone stole billions of euros. Stole. Imagine if we didnt have to pay all the farm subsidies to keep 5 goats in mountains. Or to pay hungary for lookout towers in the middle of nowhere.
Sound like you should go after the Slovak government
Well, isn’t the EU supposed to watch out for this? Taxe frauds with VAT are a big deal. And nothing gets done. But people making peanuts will get taxed to the tits…
> If your business is dependent on slave labor
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.
EU doesn't actually have power to tax people, each government does its own taxation. They come up with agreements like minimum tax levels to prevent things like pretending to be in Ireland to avoid taxes in France but that's about it.
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.
The assumption that a company can pay US tax rates while selling into the EU is perhaps one that should be questioned, like the ability to pay Chinese tax rates while selling into the US.
(see Apple Ireland)
I haven't come across a single list of problem from business orgs that lists EU or local taxes, even if particularly high (California, Canada?), as a problem.
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.
Every list of problems I see from economists of all brands explaining why e.g. the UK has such poor economic performance and such a severe cost of living crisis mention the complexity and scale of taxation in the country first as a barrier to economic growth and cause of inflation.
> the issue with EU is the taxes and cost of labour.
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 !
> 450 million and counting people would still prefer to live and work in the EU than anywhere else
majority of population of any given country doesn't emigrate ever, even inside EU where it would be extremely easy
> majority of population of any given country doesn't emigrate ever, even inside EU where it would be extremely easy
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...
> Because unlike the US, we don't speak the same language.
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.
Yes, they might, but in practice and with the exception of multinational corporations and some start-ups, everyone speaks their own language. And it's all fun and games that you can speak english in restaurants, cafes, train stations and the like, and then when you want to find a job in an EU country you get hit with "do you speak our language? no? ah, we're sorry then."
There's a big difference between being a tourist in Europe and actually living here.
Well, if you insist on not learning a non-English European language, last time I checked Ireland was still in the EU and they speak English.
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.
Common language works for employment and business, but then you go to government bureau (or want to fill government form) and they will insist on official language.
That is why english as secondary official language would be beneficial.
But evidence shows that they do emigrate in mass when there's a reason, it's one of the core issues of the last decade and the reason why fascists gained power all over the world. If fact its the reason why masked people in USA are hunting down immigrants.
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.
> But evidence shows that they do emigrate in mass when there's a reason
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. ;)
Listen i live in europe. But the amount of money wasted is huge.
California’s taxes and cost of labor combined are surely up there.
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.
Neither of which are actually an issue - companies earn money after all. Nobody complains that SF engineers earn (and thus cost) six figures.
While that’s also true, the EU varies widely. The tax wedge is very low in places like Czechia or Lithuania and very high in France and Germany. If you add other European countries you get some of the lowest taxes on earth in places like the Isle of Man or Switzerland.
Having said that, the lack of proper integration is a huge problem, like imposing tarrifs of over 100% on ourselves.
Labour is much more expensive in the USA, and other taxes are very comparable. And the USA is the startup capital of the world.
Labor cost has many aspects. One big and key difference between the EU and the US is that due to socialist policies in the EU, it is much much harder to fire people when the business takes a downturn. And this is why companies are not that eager to hire as fast as needed because it is very hard for them to downsize.
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.
I don’t know about other countries but e.g. in germany the law all but forces you to fire higher performing people before lower performing folks, with additional protections for especially unproductive employees. And that’s for when your business is sufficiently struggling to justify layoffs under the law.
The US hire-and-fire approach is then the other extreme.
The optimal amount of worker protection is somewhere in-between.
The optimal amount of protection provided by businesses is none. Employees are like any other costs, that may need to change based on supply and demand.
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.
In practice you can hire people for at least 6 months in Europe on a "fire-at-will" contract. But yes, you're probably right. Down-sizing is not a problem in Europe, but you can't easily choose which people you want to let go, which is a problem.
If I understand correctly, the plan is to add a virtual state to address this.
Can't work legally speaking. There has to be a single sponsoring member state. Just sadly how the EU is designed.
The only way would be to copy it individually so it is the same in each member state which breaks the purpose of it.
this isn't fully true
yes you company needs to be rooted in a specific country, and sure moving company roots between countries is still not always trivial (anti capital flight laws are a thing). But that isn't really in conflict with a EU INC per-se. I mean they do point out that it will have
> Local taxes & employment
and this isn't in conflict with
- the same business form being available in all EU members
- central EU registry
- Standardized investment documents ( * this is only investment documents, not e.g. tax documents)
- Standardized EU-wide stock options
- For every founder ( * with some limits)
Like there are already some "EU level" business models, e.g. you company can operate as a Societas Europaea (SE). Now a SE is for other use-cases so not really the same at all (it's more like the EU version of a German GmbH), but it shows that things "in that direction" are very much viable.
> - Standardized investment documents
All investments I took part of implied a lot of back and forth on conditions adapted to the specific case, preferences, fears, etc. I have doubts that "standardization" can be reasonable achieved here.
> - Standardized EU-wide stock options
EU does not have attributions on tax, it's the national governments that do (see https://european-union.europa.eu/priorities-and-actions/acti...).
The issue with stock options are that they are taxed, so you will have to consider each country in particular.
Maybe you would like for EU to have tax responsibilities, but I wouldn't jump to that without thinking about the implications. As an example the Euro monetary union without a fiscal union can causes issues already (for some explanations check https://en.wikipedia.org/wiki/Fiscal_union).
the proposal itself, and my comments, say no tax will be on country basis, that doesn't block standardized stock options. It just means that on monetization events taxes you pay on stocks might differ (they anyway will depending on where you live independent on anything on the company side).
I hope someone talked with lawyers that know what can be done.
I would love a (more) unified system (tax, rules, etc.). Multiple organizations/think-tanks recommended more unified systems for the EU on this topics.
The problem is if it does not fall under the EU competences it will be hard to implement at that level. To quote:
> While the businesses and objectives targeted by the 28th regime are specified to some extent, it is unclear which firms would specifically have access to it, and which aspects of the business code would be covered. The competences of the EU are likely to constitute boundaries in this respect.
source: https://www.europarl.europa.eu/RegData/etudes/BRIE/2025/7792...
In a way, it's like programming. The difficult part are the exceptions, corner cases or unplanned interactions. Countries are very reluctant to give up control over some topics (tax being one of them) and they also have lawyers.
I welcome any help entrepreneurs can receive. But after trying it a couple of times (software stuff, might be a specific case) I personally didn't find the rules for creation/tax were that of a problem, compared to the requirements that in many other instances I felt were imposed to the newly/newlish formed enterprise (ex: want to apply to a project? you have to have existed for 3 years; want that subsidy? you need to show us you are having X partners) to lower the risk for the existing (public and private) organizations.
> anti capital flight laws are a thing
Hmm - any examples of this applying intra-EU? That feels like a violation of the free movement of banking services.
> violation of the free movement of banking services
Isn't the same as freely moving the jurisdiction under which a company exist.
It also mostly applies to cash/legal tender but most wealthy peoples wealth is only in small amounts in cash.
Technically relevant laws are also often not classified as "capital flight" laws per-se, but are very close to it.
E.g. in Germany there is a "Wegzugsteuer" (~moving away from Germany Tax), which only applies to "hidden/unrealized reserves". When you leave Germany (~for good, kinda, it's complicated) the tax treats them as if you sold them, i.e. you have to any tax you would have to pay if you had sold them. "Hidden reserves" include stuff like you owning more then 1% of a company, certain investment founds, crypto currency, etc.. So while it's not a capital flight law as it doesn't affect cash (weather digital or physical) it is very similar to it.
(clarifications: yes in EU crypto currency is not a legal tender, i.e. it's treated more like gold. You still can use them to buy things as you can buy things based on an exchange of goods if all involved parties agree to it. Similar for a lot of the things covered by the law it's possible to sell them for very low taxes under the right circumstances, so if you don't move very spontaneously you have a lot of ways to largely reduce this tax.)
Weird. Seems to work for Airbus, Allianz, BASF, E.ON, Fresenius, LVMH Moët Hennessy Louis Vuitton (and its subsidiary Dior), SAP, Schneider Electric, TotalEnergies, Unibail-Rodamco-Westfield and Vonovia.
Of course, that's the existing pan-European SE which is a public company. Needs like a few sentences changed in the existing regulation to extend that to private companies. https://en.wikipedia.org/wiki/Societas_Europaea
This is very different. In a SE these are incorporated and sponsored by the member state. It is like each country making an equivalent copy of the same thing.
The EU-INC is EU designated without a sponsor, which is not permissible under EU law other than for the EU institutions themselves. This is one of the red lines for the design of the EU legally speaking
An SE is incorporated under EU law, and it has a headoffice registered in a member state - and that registration can be moved to another member state. Like GDPR, the relevant law is an EU "regulation" and not a directive. Directives need to be implemented in local laws, regulations apply directly (local laws may fill in details as long as they don't contradict or restrict the regulation, except of course where the regulation explicitely allows derogation). https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CEL...
What do you mean by "sponsored by the member state"? Can you point to the exact regulation, treaty or directive that imposes this requirement?
This is the basic Maastricht treaty. You cannot make EU law in France without France creating it not as EU law, but as French law. A SE or EU-INC would have to exist within this construct.
The only exception to a legal entity are the EU entities themselves which are supranational.
This is what most people don't understand with the EU, that there is a very specific process to create law and limitations on what it can do. It isn't like the US and the EU isn't a country. I may appreciate you might be European but even within Europe the detail with it is where it matters.
Article 288 of the Treaty on the Functioning of the European Union "A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States." - for example, GDPR.
But even if this were implemented using a Directive (note: the SE is created in a Regulation, that's the link in my previous comment), this still would not mean that the law or the directive would necessarily need to require a company to be "sponsored" by a specific state - whatever that means. (Again, it would help if you'd define "sponsor" with a specific legal reference.)
And even then, Von der Leyen could have been talking about changing the TFEU treaty itself, which is ambitious but certainly not impossible. But again, I see no reason why this can't be done in a regular fashion, just like the already extant SE Regulation.
And if the authors of the proposal had thought a bit more about their idea, they would have realized that the situation is exactly the same in the USA:
You have to select a state to incorporate in. You can't incorporate "federally". All states have different laws and regulations relating to business. Just like in Europe.
So they're chasing a false idea.
Maybe the task is to make the changes to get this to work legally speaking.
this proposal exists under the umbrella of the 28th regime[0] idea, as per their FAQ.
Which.. would be a good idea, but I am not holding my breath for it to happen in the next 10 years.
[0] https://en.wikipedia.org/wiki/28th_regime
They've already said it'll be the 28th state
If the EU is saying "we'll make it work", replying "can't work because that's how the EU is designed" doesn't seem like an intelligent response.
Looking at it on vibes is not intelligent either.
The design of the EU is based on a foundation where other than the EU institutions themselves the founding legal entity must sit within a member state. EU law that is one each country must replicate, there is no such way to have EU wide law without each and every member state replicating it entirely. An entity that is supranational cannot exist outside this construct & is a red line of the design of the EU itself.
This is one of the reasons the EU cannot easily raise debt for itself without going through a sponsoring member state.
> The design of the EU is based on a foundation where other than the EU institutions themselves the founding legal entity must sit within a member state.
You don't get it.
You're arguing it's not possible on the basis of the law. I'm saying the people you make the law are saying they'll make it happen. Get it?
The EU in a nutshell. It's never about achieving anything through actual work - it's all about the illusion of progress through buying domain names, custom fonts, padding: 200px, marketing, and more paperwork.
I scrolled it high level but it does not look to me like this is solving any real problem and probably its creating new ones. Sure if you are cash strapped startup and can't afford getting a tax advice or an investor that does not want to pay for a due diligence this could save some money on paper. Most of the supposed benefit of this pan European legal entity seems problem that has been already solved in the real world. The same type of entity works more or less the same through out of Europe with mostly marginal difference, and sounds more like an excuse than anything. Of course each jurisdiction has is own jurisprudence which make the landscape more complex, but once you get a new type of "inc" you are going to get new jurisprudence, only that in this case you are going to be a lot of jurisdictions conflicts and potentially you might have to take into account multi-jurisdictions jurisprudence making everything even more complex. Also I would remove as second point an "EU-central registry", it's not exactly a killer feature considering that all the European registries are currently accessible from a single web page already.