Merz and Macron Confirm Pan-European Legal Entity Initiative for Startup Growth

Paris, France – German Chancellor Friedrich Merz and French President Emmanuel Macron have confirmed their commitment to establishing a pan-European legal entity, a move widely anticipated to address the fragmentation hindering the growth of European startups. The announcement signals a significant political alignment between the two economic powerhouses, aiming to streamline the regulatory landscape for emerging businesses across the European Union. This initiative is expected to pave the way for a more unified and competitive European startup ecosystem.

The confirmation comes amidst a concerted effort by organizations like EU–INC, a grassroots initiative advocating for a standardized, digital-first legal entity tailored for startups. According to a recent tweet from EU-INC, "🤯 MERZ AND MACRON JUST CONFIRMED A PAN-EUROPEAN LEGAL ENTITY IS COMING." The organization emphasizes the critical need for a solution "fit for purpose for European startups," specifically advocating for the "EU–INC" model. This model proposes a new pan-European legal entity with a central EU-level registry, standardized investment documents, and harmonized stock options, while retaining local taxes and employment laws.

The current fragmented legal environment in Europe presents significant challenges for startups seeking to scale across borders. Founders often face complexities in raising capital, hiring talent, and navigating diverse national corporate laws, which can deter pan-European investment and limit growth potential. The proposed pan-European legal entity aims to mitigate these issues by offering a single, recognizable corporate structure that simplifies operations and attracts international investment.

The political backing from Merz and Macron is a crucial step for the initiative, which has gained traction among European startup leaders and investors. The European Commission is expected to release a legislative proposal for such an entity in Q1 2026, with the ambitious goal of full implementation by 2027 or 2028. This timeline, while rapid for EU legislative processes, underscores the urgency felt by policymakers and the startup community to create a more integrated single market for innovation.

Proponents argue that a standardized legal framework, akin to the Delaware C-Corp in the United States, would foster greater confidence among investors and allow startups to scale more efficiently. By reducing legal friction and administrative burdens, the pan-European entity could unlock significant capital and talent flows, enabling European companies to compete more effectively on a global stage. The success of this initiative hinges on ensuring the final legislative framework truly meets the practical needs of the dynamic startup sector.