Stéphane Séjourné has told EU governments that a proposed European company regime would lose much of its purpose if they strip out a common framework for employee stock options — a warning that turns a technical tax dispute into a test of Europe’s ambitions for its startups. The Commission’s executive vice-president for prosperity and industrial strategy made the intervention in Brussels on September 24, as member states pushed back against a central feature of the proposed “EU Inc” framework, also known as the 28th regime. The proposal would offer founders an optional corporate form operating alongside national company laws, rather than replacing them.
Its promise is deliberately simple: a company could be registered fully online within 48 hours, for no more than €100 and without a minimum share-capital requirement. But its political difficulty lies in what comes after incorporation. The Commission wants companies using the regime to offer employees EU-wide stock options that would be taxed only when the underlying shares are sold.
“I do not see the 28th regime working without stock option harmonisation,” Séjourné said, warning that removing it would erase “a large part of the scheme’s utility.” That is the fault line now running through the proposal.
Brussels sees stock options as a practical weapon in the fight for engineers, researchers and executives who might otherwise take better-paid jobs at established companies or move to American-backed ventures. A large group of governments sees harmonised treatment of those options as a step too far into an area bound tightly to national tax systems.
A company form with a competitiveness argument The
Commission presented its EU Inc proposal on March 18, after promising a 28th regime in its Competitiveness Compass in January 2025. The idea is to give a startup a single legal vehicle that can operate across the bloc without forcing founders to navigate a separate corporate system in every country where they expand. The measure is voluntary.
An entrepreneur could still establish a company under French, German or any other national law. But the Commission’s case rests on the proposition that an optional European route must be more than a faster online registration service if it is to change how startups scale. That is why the stock-option provision matters so much.
Young companies commonly lack the cash to match salaries offered by larger employers. Equity can bridge some of that gap, but the value of an option becomes less useful if employees face tax before they have realised cash from selling shares. Under the proposed EU employee-stock-option scheme, taxation would arise on disposal of the underlying shares, avoiding tax on income that has not yet materialised.
For Séjourné and the governments backing him, that feature is not an accessory. France, Germany, Italy, Spain and Romania have argued that it supplies the proposal’s principal added value. French Industry Minister Sébastien Martin has also supported keeping the scheme, alongside Germany.
Without it, supporters fear EU Inc would be reduced to a digitalisation exercise: useful, perhaps, but unlikely to alter the incentives facing a founder choosing where to build a company or a specialist deciding whether to accept startup equity.
A growing bloc against harmonisation
The resistance is substantial. At a Council working-party meeting on September 10, more than 15 member states reportedly opposed harmonising the EU stock-option scheme; accounts of the meeting put the number at between 16 and 19 countries. The scale matters because the Commission is not arguing over a drafting detail.
It is trying to attach a common treatment of employee equity to a corporate-law initiative at the point where national governments are most protective: taxation. A subsequent discussion among EU ambassadors at Coreper on September 30 did not settle the issue. The Irish Council presidency was unable to secure agreement on whether the stock-option element should remain or be removed, according to accounts of the meeting.
It is seeking a Council negotiating mandate by mid-October. The coalition lines are not fixed by geography or ideology alone. Alongside supporters such as France and Germany, a broad list of potential opponents has emerged, including Hungary, Malta, Luxembourg, Belgium, Austria, Bulgaria, Czechia, Estonia, Slovakia, Sweden, Croatia, Slovenia, Poland and Portugal.
Their resistance could leave the presidency confronting an unpalatable choice: preserve the feature that gives EU Inc its distinctive appeal, or remove it to rescue agreement on the wider corporate framework.
The decision Brussels cannot postpone
Séjourné has urged capitals not to add fresh administrative layers while they examine the proposal. That plea reflects the Commission’s larger calculation. Europe has long produced technical talent and research, yet startups attempting to grow across borders confront a patchwork of company rules and incentives.
EU Inc is intended as a narrow answer to that fragmentation, not a replacement for national corporate law.