EU-INC: A Game-Changer for Scaling D2C Brands Across Europe?

Standing in front of the Davos World Economic Forum on January 20th, Ursula von der Leyen, European Commission President unveiled EU-INC – a single, pan-European legal entity under what Brussels is calling the “28th regime” that could fundamentally reshape how D2C brands scale across Europe – and it has massive implications for UK businesses building the next generation of unicorns.

And it’s backed by 22,000+ signatures from the people who’ve actually built Europe’s tech ecosystem: Patrick Collison (Stripe), Paul Graham (Y Combinator), Taavet Hinrikus (Wise), Sebastian Siemiatkowski (Klarna), and even Nico Rosberg. Entire VC firms – Index Ventures, Sequoia, Atomico, Seedcamp – have thrown their weight behind it.

This started as a proposal that has gained significant momentum.

Here’s what von der Leyen committed to:

“We call it EU Inc. with a single and simple set of rules that will apply seamlessly over our union so that businesses can operate across member states much more easily. Entrepreneurs will be able to register a company in any member state within 48 hours, fully online.”

One legal framework instead of 27. One registry. One set of rules. Standardised investment documents. And crucially – harmonised EU-wide stock options (EU-ESOP) that don’t trigger unexpected tax events when one of your senior leadership team moves between EU member states.

For D2C brands scaling across Europe – and for UK founders eyeing the continent – the potential is massive.

Why This Matters for UK Businesses and Creating Unicorns

The UK creates unicorns at nearly the same rate as the US: 12% of our startups with £100M-£250M in funding reach billion-dollar valuations, compared to 14% in America. We’ve minted 163 unicorns, with 149 still headquartered here. Our tech sector is worth $1.2 trillion.

But the reality is: we create 3.08 unicorns per $1 billion in seed and early-stage VC, versus just 1 unicorn per $1 billion in the US. Our capital efficiency is exceptional because we have a unified legal framework – Companies Act 2006, common law tradition, straightforward incorporation at Companies House.

The problem? Post-Brexit, that efficiency stops at our borders.

Right now, a UK D2C brand scaling into Europe faces the same fragmentation that’s been killing European startups for decades:

Illustrative costs:

Multiply that across Germany, France, Spain, and Italy, and you’re looking at six figures before you’ve shipped a single order.

Whether you’re launching a beauty brand with hero SKUs, scaling a wellness supplement line, building premium haircare, or running subscription replenishment – the barrier is identical. You’re treated as a “third-country” entity requiring separate registrations in each Member State.

EU-INC would change this equation dramatically – if UK businesses can access it.

The EU-INC team has been clear: “There is no successful Europe without the UK, Switzerland, Norway and the many other countries outside the EU. This is about Europe not the EU.” Andreas Klinger from Prototype Capital hopes it “will be valid across the EU as well as in additional countries such as the UK, Norway and Switzerland”.

But there’s no confirmation yet. Third-country access to EU frameworks is typically restrictive and requires bilateral negotiation – look at Switzerland’s 100+ treaties or Norway’s EEA arrangement.

The Unicorn Equation

Here’s what’s at stake: only 18% of first-round investments in Europe are pan-European today, compared to routine coast-to-coast fundraising in the US.

When a Berlin-based D2C brand wants to hire a growth lead in Dublin or expand to Paris, they face 27 different employment laws, stock option regimes, and tax systems. This fragmentation is why 30% of European unicorns relocate outside the EU – with the majority moving to America.

If EU-INC delivers a regulation (not a directive) that genuinely harmonises incorporation, investment docs, and equity frameworks across 450 million people, it replicates the UK’s competitive advantage at 7x our market size.

For UK founders, this creates both opportunity and risk:

The opportunity:If UK businesses gain access to EU-INC – either through the framework itself or a separate UK-EU agreement – we get a 48-hour online path to the entire European market. One setup. One compliance burden. Standardised investment documents that make pan-European fundraising viable.

Combined with the UK’s track record (57 unicorns from $18.5 billion in VC since 2014), access to EU-INC could position British founders as the bridge between a unified European market and global capital.

The risk:If EU-INC is EU-only and successfully removes the fragmentation that’s been Europe’s achilles heel, the continent suddenly becomes far more competitive. Brussels replicates Delaware’s effectiveness across 27 countries. Capital that currently flows to London because of our unified framework starts flowing to Amsterdam, Paris, Berlin, Stockholm.

We’ve already seen the warning signs. Some UK D2C brands exploring European expansion are setting up Estonian e-Residency companies to access EU incorporation frameworks. If EU-INC makes that path dramatically easier, the UK’s structural advantage erodes.

The Reality Check

This isn’t law yet. It’s a commitment to table legislation in Q1 2026, with implementation targeted for 2027. The critical question:regulationordirective?

Early signals suggest the Commission may table this as a directive – which would require 27 separate national implementations. That’s precisely the fragmentation EU-INC is supposed to solve.

The startup community is pushing hard for a regulation under Article 352 TFEU, which would deliver direct application across all member states. One rulebook. No national interpretation layers.

If Brussels goes the directive route, we’ll end up with another well-intentioned framework that gets diluted through national politics – like the Societas Europaea (SE), which promised pan-European incorporation but remains underutilised because it’s not simpler than national alternatives.

Tax and labour law will still be national. EU-INC standardises the legal entity, but you’re still dealing with different VAT rates (17% in Luxembourg vs 27% in Hungary) and local employment regulations. The complexity doesn’t vanish – it just shifts.

For UK D2C Brands – The Strategic Play

If you’re a £2M-£50M D2C brand planning European expansion, this is worth monitoring closely – and potentially engaging with.

The EU-INC proposal is open for community input right now. If you’re a UK founder who’s lived the pain of multi-country VAT registration, fragmented investment documentation, or the impossibility of offering meaningful equity across borders, Brussels needs to hear from you.

The difference between EU-INC that includes third-country access (UK, Switzerland, Norway) versus an EU-only framework could determine whether London remains Europe’s leading tech ecosystem or becomes one option among many.

The optimal scenario: a regulation that delivers genuine harmonisation with explicit provisions for UK businesses to opt in, either directly or through a streamlined bilateral arrangement. This preserves our unicorn creation efficiency while removing the friction that currently makes European expansion prohibitively expensive.

The risk scenario: an EU-only directive that creates a 28th layer of bureaucracy for member states while UK businesses remain locked out, watching as the competitive advantage we’ve built through unified frameworks gets replicated at continental scale.

My take:

Europe has the talent, the capital, and the market. The UK has proven we can create unicorns at world-class efficiency when the legal infrastructure supports it. EU-INC could finally give the continent the same foundation – and if UK businesses have access, it’s transformational for both sides.

But if we’re excluded, we’re watching a 450-million-person market solve the fragmentation problem that’s been our competitive moat.

The next few months are critical. The Commission’s Q1 2026 proposal will reveal whether this becomes infrastructure that unlocks European innovation – or whether it creates a new dividing line between UK businesses and continental markets.

What’s your experience scaling across European markets post-Brexit? Are you seeing the same barriers, or have you found workarounds that actually work?

Find out more about the EU-INC proposal and sign the petition.