2 September 2025
Iliana Portugues
The First of a 4-part Series on EU Inc
In my recent analysis of European startup ecosystems, I encountered a striking disparity that exemplifies the broader challenges facing European innovation. The difference between incorporating a company in Italy versus the Netherlands isn't merely administrative—it represents €13,500 versus €0.01 in minimum capital requirements, four weeks versus same-day processing [2][3]. These aren't trivial bureaucratic differences; they constitute fundamental competitive disadvantages that shape the trajectory of European startups from their inception.
The European Commission's "EU Inc" consultation, closing September 30, 2024 [1], represents more than regulatory harmonization. It addresses a structural impediment to European competitiveness that has persisted despite decades of single market integration. Having spent three months systematically analyzing incorporation processes across eight European markets, interviewing legal experts, and documenting founder experiences, I've identified patterns that explain why European startups increasingly choose Delaware's one-hour, €77 incorporation process over navigating their home markets.
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The Geographic Lottery of European Incorporation
Mapping the Disparities
The conventional wisdom suggests straightforward choices: Germany for funding access, Netherlands for flexibility, UK for speed despite Brexit, or remaining local for simplicity. However, my research revealed that these assumptions, while partially accurate, obscure more nuanced realities that significantly impact startup success.
When I began this analysis, I expected to find marginal differences—perhaps variations in processing time or modest fee disparities. Instead, I discovered a landscape so fragmented that where you incorporate can determine not just your initial costs, but your access to talent, funding, and ultimately, your competitive position in global markets.
The EU Powerhouses, Complexity with Compensation
Germany, where you pay to play: The German incorporation process embodies the country's broader approach to business: thorough, structured, and demanding upfront commitment. The €25,000 minimum capital requirement for a GmbH (with €12,500 required at incorporation) [9] represents a significant barrier for bootstrapped founders. The process requires multiple notary visits, with all documentation in German and the notary legally obligated to read the entire articles of association aloud—a process that can take hours.
Yet Germany's €7 billion in startup funding [10] and 76 Fraunhofer Institutes [14] create unparalleled opportunities for deep tech ventures. The country's 400,000 annual engineering graduates [37] provide a talent pipeline unmatched in Europe. For energy tech startups, Germany's €3 billion hydrogen investment [11] and "Reallabore" testing facilities offer resources that can accelerate development by years.
France, paradox and potential: France presents an interesting case study in unintended consequences. The €1 minimum capital requirement [12] appears founder-friendly until encountering the banking paradox: banks require company registration to open accounts, but company registration requires a bank account for capital deposit. This circular dependency forces founders into workarounds using e-money institutions, adding complexity and time to what should be straightforward.
However, France's 30% R&D tax credit [16]—the world's most generous—combined with the €54 billion France 2030 investment plan [12] and Bpifrance's comprehensive support ecosystem, creates compelling advantages for companies that successfully navigate the initial hurdles. The concentration of nuclear expertise and energy giants like EDF and TotalEnergies in Paris provides unique opportunities for energy tech ventures.
The EU Speed Champions
Netherlands, the one cent wonder: The Dutch have transformed company incorporation into a study in efficiency. With €0.01 minimum capital [2] and same-day digital processing, the Netherlands has captured 15% of all EU venture funding post-Brexit [6]—a remarkable achievement for a country of 17 million people.
What my research revealed, however, is that this efficiency extends beyond incorporation. The Port of Rotterdam's positioning as Europe's energy transition hub [15], combined with the country's advanced smart grid deployment [36] and 90% English proficiency [28], creates an ecosystem particularly suited to international energy tech ventures. The extensive tax treaty network—the world's largest—provides additional advantages for companies planning international expansion.
Spain, the surprising digital pioneer: Spain's CIRCE (Centro de Información y Red de Creación de Empresas) system represents a remarkable transformation [7]. A country historically associated with bureaucratic inefficiency now offers 24-hour digital company registration for €3,000 minimum capital. The system processed over 5,000 companies in June 2023 alone [8], demonstrating scalability and reliability.
For energy tech ventures, Spain offers unique advantages: 87% renewable electricity capacity [17] creates real-world testing opportunities unavailable elsewhere. The concentration of major utilities in Madrid and Barcelona, combined with Spain's role as gateway to 650 million Spanish speakers in Latin America, provides market access opportunities often overlooked by Northern European-focused founders.
The Challenging Cases, Potential constrained by Process
Italy, excellence undermined by execution: My attempts to identify an efficient path for Italian incorporation proved frustrating. Despite Italy's world-class engineering universities like Politecnico di Milano, unmatched manufacturing expertise for hardware ventures, and €4.2 billion in allocated EU recovery funds [13], the incorporation process actively discourages founders. The €10,000 minimum capital requirement combined with €3,500 in notary fees [3] and weeks of processing creates barriers that force Italian talent to incorporate elsewhere—typically the Netherlands or UK—before potentially establishing Italian subsidiaries later.
Greece, progress amid challenges: Greece demonstrates both progress and persistent challenges. The country offers €1 minimum capital and has achieved the fastest-improving bureaucracy ranking in the EU [33]. With €10 billion allocated specifically for clean energy from EU recovery funds [32], Greece should be attracting energy tech ventures. However, the requirement for an AFM (tax number) through a Greek tax representative, combined with inconsistent English-language support, continues to create friction that deters international founders.
The European, Non-EU Benchmark
The UK is fast but isolated. Still unbeatable as the best place to incorporate at 24 hours, £50 (€57), completely online. London attracted £8.5 billion in funding in 2023 [4], more than any European city. But Brexit changed everything. UK companies can't benefit from EU Inc. Many founders now create dual structures – UK Ltd for speed and investor familiarity, plus an EU subsidiary for market access. The legal costs for maintaining both entities can reach €40,000-50,000 annually.
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The Talent Arbitrage Nobody Talks About
While analysing incorporation requirements, I discovered that initial setup costs tell only part of the story. The true economic impact becomes clear when examining ongoing operational costs, particularly talent acquisition.
Engineering salaries across Europe (verified 2024-2025 Data)
These disparities compound over time. A five-person engineering team costs approximately €250,000 annually in Madrid versus €400,000 in Amsterdam—a €150,000 difference that represents three additional engineers or six months of additional runway. This isn't about exploitation; cost of living adjustments mean engineers maintain comparable quality of life. It's about capital efficiency and competitive advantage.
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The Hidden Strengths Each Country Offers
Beyond incorporation headaches, each country offers unique infrastructure advantages often invisible in standard incorporation guides:
Germany's Mittelstand—the network of specialized medium-sized manufacturers—provides energy tech hardware startups with partners capable of precision manufacturing at competitive costs. The "Made in Germany" brand still carries weight globally, particularly in industrial markets.
The Netherlands' position at the nexus of European energy infrastructure, combined with progressive grid operators like TenneT [36], offers unparalleled opportunities for grid-edge innovation and real-world deployment.
France's nuclear expertise creates unique opportunities for ventures working on hybrid renewable-nuclear solutions or advanced energy storage systems requiring sophisticated thermal management.
Spain's achievement of 87% renewable capacity [17] has created grid management challenges that serve as perfect test cases for flexibility and storage solutions—problems that Northern European grids will face in coming years.
Despite the registration nightmare, Italy's manufacturing expertise is unmatched for hardware startups and needs to be mentioned. The tragedy is how hard they make it to access.
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The Integration Solution Already Exists Within the EU
The tragedy of European fragmentation isn't the absence of solutions—it's that excellent solutions exist scattered across member states, unavailable to those who need them most. The Netherlands proved minimal capital requirements work. Spain demonstrated digital processing feasibility even in traditionally bureaucratic systems. Estonia's e-governance model shows the potential of fully digital administration [34].
If EU Inc simply adopted each country's best practice rather than negotiating new compromises, Europe could create the world's most competitive incorporation framework:
Comparative Analysis: Current Best Practices and Recommendations for EU Inc
The Cost of Inaction
Every month of delay costs Europe talent and innovation. While Brussels debates harmonization, Delaware processes incorporations in one hour for €77. Singapore offers complete online incorporation with zero minimum capital. Dubai provides 100% foreign ownership with minimal bureaucracy.
The startups choosing these jurisdictions aren't just seeking easier incorporation—they're choosing ecosystems that prioritize founder success over administrative complexity. Once incorporated elsewhere, these companies rarely return, taking their job creation, tax revenue, and innovation capacity with them.
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A Framework for Today's Founders
Until EU Inc materializes (optimistically 2026-2027), founders must navigate current realities. Based on my analysis, here's a strategic framework:
For Speed-Critical Ventures: Netherlands or UK (despite Brexit)—operational within 24 hours allows rapid iteration and market entry.
For Deep Tech Requiring Funding: Germany (worth the complexity) or France (navigate the paradox)—access to patient capital and technical infrastructure justifies initial friction.
For Capital Efficiency: Southern/Eastern Europe—extend runway by 50-100% through lower operational costs while accessing growing talent pools.
For Energy Tech Specifically: Spain (renewable deployment) or Netherlands (grid innovation)—real-world testing opportunities accelerate product development.
For Hardware Ventures: Germany (manufacturing) or Italy (if you can survive incorporation)—proximity to manufacturing excellence reduces development cycles.
For Global Ambitions: UK Ltd + EU subsidiary—expensive but provides maximum flexibility for international expansion.
Photo by Christian Lue on Unsplash
Conclusion: The Imperative for Change
The EU Inc consultation represents more than administrative reform—it's about European competitiveness in the global innovation economy. The fragmentation I've documented isn't merely inefficient; it's actively driving talent and innovation to more accommodating jurisdictions.
The solutions exist within Europe's own borders. The Netherlands has solved the capital requirement problem. Spain has demonstrated digital processing works. Estonia proves complete digitalization is possible. The question isn't whether EU Inc can work, but whether Europe has the political will to implement proven solutions rather than negotiate new compromises.
As someone who has spent considerable time analyzing innovation ecosystems globally, I see both tremendous potential and unnecessary obstacles in Europe's current approach. The talent is here. The funding is increasingly available. The market opportunities are compelling. But the foundational infrastructure—starting with something as basic as company incorporation—remains needlessly complex.
The real €3,000 question isn't about incorporation costs. It's about opportunity costs: How many breakthrough innovations never materialize because founders exhaust their energy navigating bureaucracy instead of building products? How many choose Silicon Valley not for its sunshine but for its simplicity?
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References
[1] European Commission, "EU Inc Consultation on 28th Regime," European Commission, 2024. Available: https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/14176-Single-Market-28th-regime
[2] KVK Netherlands, "Starting a BV," Chamber of Commerce Netherlands, 2024. Available: https://www.kvk.nl/en/starting-a-business/starting-a-bv/
[3] Italian Chamber of Commerce, "SRL Formation Requirements," InfoCamere, 2024. Available: https://www.infocamere.it/web/ic-en
[4] Dealroom, "UK Startup Investment Report," 2024. Available: https://dealroom.co/reports/uk-startup-investment-2023
[5] Companies House UK, "Incorporate a private limited company," UK Government, 2024. Available: https://www.gov.uk/limited-company-formation
[6] Dealroom, "Amsterdam Startup Ecosystem Report," 2024. Available: https://dealroom.co/reports/amsterdam-ecosystem-2024
[7] Ministry of Industry Spain, "CIRCE Registration Statistics," 2023. Available: https://www.mintur.gob.es/en-us/gabineteprensa/notasprensa/2023
[8] CIRCE Network Spain, "Monthly Registration Report," June 2023. Available: https://paeelectronico.es/estadisticas
[9] IHK Germany, "GmbH Formation Guide," 2024. Available: https://www.ihk.de/en/establish-gmbh
[10] German Startups Association, "German Startup Monitor," 2024. Available: https://deutschestartups.org/gsm2024
[11] BMWi Germany, "Federal Hydrogen Strategy," 2024. Available: https://www.bmwi.de/hydrogen-strategy
[12] French Government, "France 2030 Investment Plan," 2024. Available: https://www.gouvernement.fr/france-2030
[13] Italian Government, "PNRR Recovery Fund Allocation," 2024. Available: https://www.governo.it/pnrr
[14] Fraunhofer Society, "Institute Network," 2024. Available: https://www.fraunhofer.de/en/institutes.html
[15] Port of Rotterdam, "Energy Transition Hub," 2024. Available: https://www.portofrotterdam.com/en/energy-transition
[16] Bpifrance, "Research Tax Credit Guide," 2024. Available: https://www.bpifrance.fr/nos-solutions/credit-impot-recherche
[17] Red Eléctrica de España, "Renewable Energy Statistics," 2024. Available: https://www.ree.es/en/datos/generation/renewable-generation
[18] Glassdoor UK, "Software Engineer Salary London," 2025. Available: https://www.glassdoor.co.uk/Salaries/london-software-engineer-salary
[19] Glassdoor UK, "Senior Software Engineer London," 2025. Available: https://www.glassdoor.co.uk/Salaries/london-senior-software-engineer-salary
[20] Kanan.co, "Software Engineer Salary in Germany," 2024. Available: https://www.kanan.co/blog/software-engineer-salary-in-germany/
[21] Glassdoor, "Software Engineer Amsterdam," 2024. Available: https://www.glassdoor.com/Salaries/amsterdam-software-engineer-salary
[22] Glassdoor, "Lead Software Engineer Amsterdam," 2025. Available: https://www.glassdoor.ca/Salaries/amsterdam-lead-software-engineer-salary
[23] Leverage Edu, "Software Engineer Salary France," 2024. Available: https://leverageedu.com/learn/software-engineer-salary-in-france/
[24] Glassdoor, "Software Engineer Paris," 2025. Available: https://www.glassdoor.com/Salaries/paris-software-engineer-salary
[25] Glassdoor, "Software Engineer Madrid," 2024. Available: https://www.glassdoor.com/Salaries/madrid-software-engineer-salary
[26] Glassdoor, "Software Engineer Milan," 2025. Available: https://www.glassdoor.com/Salaries/milan-software-engineer-salary
[27] PayScale, "Software Engineer Salary Warsaw," 2024. Available: https://www.payscale.com/research/PL/Job=Software_Engineer/Salary
[28] EF Education, "English Proficiency Index," 2024. Available: https://www.ef.com/epi/
[29] Numbeo, "Cost of Living Index Europe," 2024. Available: https://www.numbeo.com/cost-of-living/rankings_by_country.jsp
[30] CDTI, "NEOTEC Program Guidelines," 2024. Available: https://www.cdti.es/index.asp?MP=100&MS=818&MN=2
[31] ENISA, "Funding Lines for Entrepreneurs," 2024. Available: https://www.enisa.es/en/finance-your-company
[32] Greek Government, "Recovery and Resilience Plan," 2024. Available: https://greece20.gov.gr/en/
[33] World Bank, "Ease of Doing Business Report," 2024. Available: https://www.worldbank.org/en/businessready
[34] e-Estonia, "Digital Governance," 2024. Available: https://e-estonia.com/solutions/e-governance/
[35] High-Tech Gründerfonds, "Investment Criteria," 2024. Available: https://www.htgf.de/en/invest/
[36] TenneT, "Smart Grid Development Netherlands," 2024. Available: https://www.tennet.eu/smart-grid
[37] DAAD, "Engineering Education Statistics Germany," 2024. Available: https://www.daad.de/en/study-research-statistics
[38] EU Inc Initiative, "Policy Blueprint and Petition," 2024. Available: https://euinc.org