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European entrepreneurs and investors have long complained about the EU’s fragmented regulatory landscape. While a real entrepreneur will always find ways to clear hurdles, this way of doing business adds unnecessary red tape and makes growth for companies and investments more complicated and costly. This has prompted a group of European founders, investors and legal experts to launch EU-INC, an initiative that aims to simplify everything and allow startups to grow.
EU-INC is a pan-European solution designed to unify and simplify how startups operate across the continent. It envisions a single new legal entity that is recognized across all EU member states, supported by a central EU-level registry. With standardized investment documents, EU-wide stock options and locally adapted taxes and employment rules, EU-INC can empower every founder to build and scale across Europe without unnecessary regulatory barriers.
EU-INC’s goal is to make this a reality and it has gained momentum and support from a large base of startup founders, funds and legal firms. Following this push, the proposal is now being discussed in Brussels.
There is no doubt this would be a great achievement and a game-changer. It would unleash Europe’s talent and ambition to create world-leading companies instead of being slowed and sometimes stopped by the fragmentation between nations. Its creators often remind European policymakers that even European Commission President Ursula von der Leyen noted in October 2024: “A startup from California can expand and raise money all across the United States. But a startup in Europe has to deal with 27 different national barriers. We need to make it easier to grow in Europe.”
The EU-INC initiative addresses this by creating a unified framework for startups. And while this only concerns startups, it would ultimately make it easier to raise funds and invest across borders and expand startups’ presence across Europe.
EU-INC has gained momentum and support from a large base of startup founders, funds and legal firms
Khaled Abou Zahr
The team behind this proposal announced that it has been submitted to Justice Commissioner Michael McGrath, Startup Commissioner Ekaterina Zaharieva and a dedicated working group within the European Commission. The European Council and European Parliament have expressed interest in what Brussels calls the “28th regime.” The community is now shaping the legislative proposal, expected in the first quarter of next year, with implementation projected for 2027.
While the outcome for Europe is still uncertain, it is a plan the Gulf Cooperation Council can use to support the development of its regional startup environment and strongly diversify its member states’ economies.
In the Gulf, there is an ease of doing business that is quite exceptional, with impeccable infrastructure. You can set up a company and get a residency permit in or Bahrain faster than anywhere else in the world. But the creation of a platform that would allow a company to operate directly or fundraise within a single framework and without additional regulatory measures across the Gulf should be considered. This would allow for the creation of regional giants ready to conquer the rest of the world.
This would become a platform for global expansion. It is supported by the fact the Gulf has built a brand name. It is attracting talent, tourists and capital from all over the world, something we could not have imagined only a decade ago. A company succeeding in the competitive environment of the GCC has the capacity to become a global giant. Hence, this is an added value for the entire region and a virtuous circle.
Many of my friends in Europe have been either moving to or pursuing opportunities in the Gulf. Their unshakable point of view is that leaders in the Gulf are much more aware, lend their ears to what businesses need to grow and are pragmatic about how to bring support. There is a real will to streamline processes, support companies and develop a dynamic and engaging environment.
In the Gulf, there is a real will to streamline processes, support companies and develop a dynamic environment
Khaled Abou Zahr
Perhaps the missing piece of the puzzle is a unique regional framework to empower the birth of more regional giants. This would allow for a blend of regional capital and support for new enterprises. It would solve the bottlenecks currently faced by companies and funds alike.
While it is true that the environment in the Gulf is dynamic, startups currently face issues that are similar to those faced by their European counterparts. As a quick explanation, investors invest in funds that, in turn, invest in startups. For the cycle to work properly, these funds (whether private equity or venture capital) need to exit these investments after seven to 10 years. This means they need to be able to sell these participations, whether to another company or through an initial public offering on the stock exchange.
This process allows the business to return money — and hopefully gains — to the original investor, who in turn can reinvest and repeat the cycle. In the current market conditions, funds are facing an issue of exits, meaning they are unable to sell their stakes. This means the original investor is not receiving their money back, which makes it difficult to justify additional investments.
The US is where the cycle works perfectly and where the different local markets are easily accessible. In short, this ease of access contributes to the creation of bigger markets, expanded companies and investment transactions. This is why a unique regional standard would facilitate cross-border exits, making it easier for investors to sell their stakes and recycle capital, thus restoring confidence and encouraging further investment. A regional stock exchange should also be included.
Now is the time for the Gulf to take this bold step. Having a common standard for businesses and how they operate would help companies grow and operate without friction across markets. It is time we saw a Gulf-based startup become a global giant. I believe this would be the key steppingstone.
- Khaled Abou Zahr is the founder of SpaceQuest Ventures, a space-focused investment platform. He is CEO of EurabiaMedia and editor of Al-Watan Al-Arabi.