What is EU Inc.? The European Commission proposal aims to make it easier to start, grow and expand a business across the EU with simpler rules, digital registration and fewer barriers.
Backed by the European Commission under President Ursula von der Leyen, EU Inc. could allow companies to register within 48 hours for less than €100, attract investment more easily and operate across the EU under a more standardised framework, while national tax, labour and social rules continue to apply.
In this video:
00:00 Why expanding across the EU is complicated
00:16 What is EU Inc.?
01:02 Register a company in 48 hours for less than €100
01:20 Funding and investment
01:37 Tax, labour and social rules
02:07 What happens next
02:22 A simpler EU Single Market
Arguably the main problem is national taxes and social contributions. It’s extremely expensive to operate and disproportionately affects small business. Getting started isn’t really the problem, staying afloat is. I suspect lowering the entry barriers will largely result in more insolvencies.
I can only speak for Germany from experience but it really feels like everything you get, you don’t get. It’s just working for the tax department with extra steps and terrible pay.
A small shop will turnover about 30k per month, 10k will go on taxes and non-optional non-taxes like GEMA, GEZ, IHK, BGN, etc. 3 full time staff will absorb 10k in minimum wages and social contributions. The remaining 10k have to cover 2k rent, 1k insurances, stock purchases, packaging purchases, advertising, legal and administrative services, energy costs, some liquidity savings (machines need service, sometimes replacing). There’s nothing left for the owner-operator to live off and they also have rents, social security, energy and taxes to pay. It’s not really viable to do a small business unless it’s something with huge value addition to beat the curve.
The administrative start up cost isn’t the hurdle, it’s macro economics. The money is sucked out of small enterprises because the big corporations aren’t taxable, they have the resources and political backing to avoid being taxed the same way.
Its better to work a bullshit job.
They should get rid of the income tax and just have a wealth tax. And also a national gains tax for companies: you make money in the country = you pay tax on that money in the country you made it. Then companies like Goolag and Macroslop can’t just send the money to another country and pay taxes there.
But social contributions… nah. That has to stay. That’s definitely worth it. Just because you’re a small business doesn’t mean your employees should work in precarious conditions.
The data is very clear. See in particular in terms of how people need to be relieved:
- Lower the value added tax, 0% for staple foods.
- Lower social contributions.
- Lower the income tax.
In that order. Note that lower social contributions can (and should) just be balanced via the federal budget.
But since people vote for parties that will never do this and all but ignore parties that would, people will continue to get screwed.
I’m not suggesting social contributions should go. But that’s the cost of doing business and as such a lot of smaller enterprises simply can’t afford to do business. It becomes a bigger money game. Which I think is problematic.
Starting is easy. Getting help in the long run is much much harder and costly. You basically need to have connections and a good amount of money stashed up before doing anything, which limits the amount of people who can even start a business substantially.
Edit: this video is for existing businesses aiming to grow, not for real startups from small people.
This is not only for ‘scale-ups’ but also for start-ups that seek a single regime designed to cut the cross-border red tapes of 27 EU member countries.
As a EU citizen you can set up a business even as a sole-trader in any EU country as well as in Iceland, Norway and Liechtenstein within within 3 days for less than 100 euros.
If some likes reading more than watching videos, here is a good start: https://europa.eu/youreurope/business/lifecycle/starting/startups/index_en.htm
This would be a lifesaver in Germany. Currently you have to put up 25.000 Euro in a cash account to start a business here. That’s intended to ensure a business has both commitment by the founders and seed funding for operations. The goal seems to be to make government approval of a business venture a more solid beginning for everyone, but a serious side effect is that small businesses are very expensive to begin. All too many ventures in Germany are under the legal radar due to complex and expensive incorporation rules, which also means workers often lack protections and the ventures don’t pay taxes like they should.
Germany is currently faced with a lack of small businesses starting up, and having something like EU Inc. could make the barrier lower, which would hopefully help get more small (legal) ventures underway.
No. Firstly, the 25k is for a GmbH, and another comment already said there needs to be “only” 12.5k at the start. Secondly, in theory, you don’t need to put in cash, could be some other value.
Thirdly, if you need a limited, you can also start an UG, where the base amount is 1€. Your only obligation is that you have to stock up to 25k over the course of time.
Fourthly, you can also start as non-limited (e.g. GbR or eK or anything else), where there is none of that anyway.
My personal gripe with starting (and ending) a company (limited) in Germany is this shitty notary system: like those leeches get thousands just for reading back the contracts I wrote myself to me. What is this nonsense? And then, if it doesn’t work out, I need to wait years before I can close shop again?!
Thats misleading 25k is for a GmbH == “limited” Which is not really intended for a solo new business
You can absolutely open business in your own name with much less, but if it goes sideways your personal money is not off limits - as it should be
Honorable mention: uG “1€ gmbh”
Just a remark: When you found a company in Germany (a “GmbH”) it is possible to pay only half of the capital (EUR 12,500), even without guarantee by the founder(s) afaik.
If it is the same as Belgium then I think you’re still personally liable for the other half (but not more than that).
