The proposal for a 28th regime for companies and the creation of EU Inc. (see EUROPE 13831/8) respond “meaningfully on several core priorities: fully digital 48-hour incorporation, no minimum share capital, flexible share structures for venture capital, an EU Employee Stock Option Plan (EU-ESOP) with deferred taxation, and use of a Regulation as the legal basis for uniform application”, as welcomed on Tuesday 7 April by the organisation ACT (The App Association), which champions start-ups and SMEs in the digital sector.
However, “significant gaps remain”, with ACT citing, among other things, “tax harmonisation, cross-border hiring, employee participation rules, and dispute resolution [which] are all left to Member States”.
“If left unaddressed through the legislative process and national implementation, these gaps risk turning EU Inc. into another layer of complexity on top of existing national regimes rather than a simplification”, warns ACT.
While the proposal introduces a simplified winding-up procedure for innovative start-ups - a “positive measure”, according to ACT - this simplified procedure is currently limited to companies that qualify as “innovative start-ups”. ACT “encourages policymakers to consider extending these simplified insolvency mechanisms to all EU companies”.
On taxation, “the absence of provisions on tax harmonisation and social security is also a major gap in the framework”.
Without a minimum level of tax harmonisation, particularly for cross-border organisations, EU companies will still have to rely on specialist advisers in each jurisdiction.
Link to position: https://aeur.eu/f/lga (Original version in French by Solenn Paulic)