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Consultation EU Inc - MEP Pascal Canfin

Hello and thank you for your interest in our work on the 28th Regime. Before answering the following form, please note that the answers will only be used by my team and will not be shared publicly. You do not have to answer all the questions to send the form. Please also feel free to watch the replay of my LinkedIn Live before formulating your answers. Please keep your comments within a reasonable word limit - Deadline 3rd of July.

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On the EU INC

As we wait for a 48h timeline for company creation in the EU Inc framework, do you see any potential obstacles, notably at local level, that we should be aware of? Are there some specific areas which should get a derogation for ex-post checks, after the company has been created? (such as anti-money laundering controls)

The European Commission sets up a European Stock Options (ESOs) plan as part of the EU Inc (Art78/79). The moment of taxation is harmonised to the moment when the warrants are disposed of. What issues could you see arising if it is not treated as capital gains in all Member States? Do you have any specific positive or negative comments on the details of the possible warrants, as detailed in articles 78 and 79? For instance, the European Commission restricts the ESOs to people with less than 25% of the voting rights. In some European countries, the issuance of ESOs are limited to the first years of the life of a company (15 in France, for instance). What limit, if any, would you see to cap the EU-ESOs’ issuances, knowing that the absence of such a cap could raise fiscal questions to some Member States on the avoidance of taxable wages?

In some countries in Europe, employee participation at the board level of decision is mandatory once a certain threshold of employees is reached. To avoid any circumvention of these rules, the EU Inc status need to account for these local specificities.
Would it discourage you from choosing the EU Inc status if you were forced to transform your branch in a subsidiary once a threshold of employees is reached, in countries applying such rules, to apply the employee participation rules at the local level? For instance, that could mean transforming your German branch in a subsidiary once you pass 500 employees.

The European Commission’s proposal allows EU Inc companies to seek admission to trading their shares on regulated markets, where Member States provide for that possibility. It would be a positive signal sent by the EU if startups could go through their entire lifecycle in the EU, including possible IPOs, without reverting to their national status. If these companies respect the full set of legislation that is applied to listed companies (such as the Shareholders’ Rights Directive), do you see any reasons to be against this proposal?

Do you see any specific information that should be specified within the templates that will allow for the fast-track creation of an EU Inc?

For which reason would you judge the creation of an EU Inc registry (Art 34) necessary on top of the Interface that will already aggregate the information of EU Inc companies?

The European Commission creates a specific framework for companies that are ‘innovative startups’ for their insolvency procedures, however this framework seems to be for a small subset of companies. What are the specific issues on the insolvency questions that could deter an investor to invest in a European startup? Is the lack of harmonisation in the field a real attractiveness problem for the ecosystem?

Is the proposal of the Commission to write specifically that no denial of payment accounts set in up in another member State (Art 103) enough to end IBAN Discrimination, or do you see further progress to be done on that front?

Article 52 as proposed by the European Commission establishes a special procedure for the withdrawal of a shareholder, if he considers that the company’s affairs are conducted in an oppressive manner. Does the procedure described in the article seem practical, or is it too much power given on a specific set of stakeholders?

Do you see any further areas of harmonisation or any further barriers to scaling in Europe that should and could be addressed within the framework of the 28th Regime?

Any other comments you would like to make?