Unlocking the potential of the single EU market - A single EU company for the single EU market
- Google docs version with option to comment: http://bit.ly/1JLNJZl
EU has a population of 508 million people, by GDP it is the single largest economy in the world. So then why doesn’t EU have so many successful e.g. internet companies that haven’t existed 10-15 years ago, like e.g. US or Asia have? It should, doesn’t it!?
Image source: What Would You Do With $600B In Cash?
Based on that premises we started a trip deeper into the matter. Unlike US, EU is made from 28 different countries. Every country has its own history, culture, language, main city, centers of industry, problems, web portals, newspapers, preferences politics, president, etc… not to say issues between themselves. Also every market protects itself by preferring domestic company. So it is not only that you have to localize your operations, but you are selling your product to the local companies. Even multinational companies’ subsidiaries in every state probably have their own local partners. So when you “enter” EU market you are not entering the EU market, you are entering one of the states/local markets of the EU. And for the every state you want to enter you might need to adopt/localize your product and be locally present. And even if you do everything right, some of them might be skeptical because of your origins. It is old news that central and eastern European startups are opening virtual offices in the UK so they could present themselves as UK companies.
Some things we won’t ever be able to solve, so it will always be harder to scale across the EU, for some it will take next 20 years. But actually, European Commission could help some companies. If startup could employ someone from the other EU country without opening new company in that country, it would be a start. If tomorrow we could penetrate new EU country’s market just by employing someone from that market, that would be a real benefit. So our first idea was to propose to the EC a new type of a company, let’s call it “limited liability startup company”. This is not something original. There was several initiatives which proposed something like this - Nellie Kroes has passionately advocated this idea and she still does, but it didn’t happen yet. So we are trying to revive that idea together with our predecessors and everybody else who is pushing it.
We were positively surprised when we have read Andrus Ansip blog post where he stated "One idea might be to establish a new type of pan-European small tech company licence or statute. Anyone could set it up in under 24 hours, with unified requirements across all EU countries, possibly simplified business rules at least for its early days."
So we know that you are already working on this, and we support you completely!
We will now explain in more details how we see it and why:
Unlocking the potential of the single EU market
One EU startup company e.g. Limited Liability Startup Company for the whole EU. Or at least for countries which decide to participate. In that case, if some country don’t want to participate then their startup founders won’t be able to get benefits, and will have to push their government for a change. Our idea for that company is to look like this:
- In all of the EU countries, with same regulations, taxes, easy accounting etc. (changed 31.3.2015).
- In that company we can employ anybody from EU (even if their residence is in different country)
- All employees will be taxed by same employee tax, no matter where they live in EU (added 31.3.2015)
- Employees from outside EU can obtain special 'startup visa' (added 31.3.2015)
- Easy to open, and easy to close!
- Easy for shareholders to invest in it, with all possible options for them.
- Easy to transfer IP rights in and out of that company
- Cheaper patent applications on EU ground.
- Company can benefit all local country startup incentives (added 31.3.2015)
- We can even agree that when incomes in that company grow to more than €10 M yearly we will open “classical” company/ies and transfer operations and IP rights to that company/ies. We think that this would be a step back and that EU should pursue the idea of the single company for the EU market. But if it is necessary, we are willing to agree. Even if we know that it will require at least one year of preparation for transfer and it will be expensive. With that we will lose time and money.
- We would also agree that there are limitation for opening such a company, e.g. it can be opened only with working prototype which has growth potential.
- Official language would be any of the official languages of the EU (changed 31.3.2015.)
- It would be governed by "EU startup law"
- And that company would have status of EU Company!
It can be same for all countries or countries can compete who will give better terms to startups. But we would like that the same amount of money collected from “LLSCs” goes to underdeveloped EU countries for development of their startup ecosystem.
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