Stripe urges EU Inc. to cut red tape as 73% of European tech leaders report rising compliance demands

Stripe, the Dublin- and San Francisco-headquartered FinTech company, has published new research highlighting the regulatory challenges facing European startups, calling on EU policymakers to ensure that the proposed EU Inc. framework delivers measurable improvements for founders and growing businesses.

Based on a survey of 200 founders, senior executives and policy leaders across all 27 EU member states, the findings reveal that 73% of respondents are spending more time on regulatory compliance, while 36% have considered establishing or hiring outside the EU because of its regulatory environment.

With EU Inc. approaching a decisive stage in negotiations, Stripe argues that the reform’s success should be measured by whether startups actually adopt it and experience meaningful reductions in administrative burdens.

Founded in 2010 by Irish brothers Patrick and John Collison, Stripe provides financial infrastructure that enables businesses to accept payments, manage revenue and operate internationally. The company has established a significant European presence, employing more than 1,000 people across the continent and serving over two million European businesses.

Its latest guide on EU Inc. and European competitiveness draws on this experience to examine what European founders need to build and scale their companies.

Despite ongoing regulatory challenges, the research identifies several advantages within Europe’s technology ecosystem. Respondents highlighted the quality of education (66%), proximity to different markets (61%) and availability of talent (44%) as the continent’s main strengths.

However, confidence in Europe’s ability to compete globally remains limited. Only 21% of respondents believe Europe could become a global technology leader within the next five years. Meanwhile, the proportion considering establishing or hiring elsewhere because of EU regulations has increased from 33% in Stripe’s comparable 2022 survey to 36% in 2026.

Red tape takes its toll

Regulatory fragmentation emerges as one of the most significant obstacles. While 52% of respondents strongly agree that harmonised rules would facilitate greater cross-border sales, only 29% currently consider regulatory harmonisation a European advantage, compared with 50% in 2022.

The administrative burden is particularly challenging for smaller businesses. According to the research, 81% of technology leaders believe European policymaking is primarily designed around established corporations, while just 14% believe it adequately considers early-stage startups.

Among companies less than a year old, 39% identified the resources required to establish legal, policy or compliance teams as one of the three biggest threats to their business. Innovation speed is another concern, with 27% of respondents identifying it as a disadvantage of operating in Europe, rising to 45% among AI-native companies.

EU Inc. faces its biggest test

These findings arrive as European institutions negotiate the future of EU Inc., the proposed optional pan-European corporate framework intended to make it easier for entrepreneurs to establish and operate companies across the single market.

Introduced by the European Commission on 18 March 2026 as part of the broader ’28th regime’ initiative, EU Inc. aims to reduce the administrative complexity associated with Europe’s fragmented national company laws. The original proposal envisaged allowing founders to register a company digitally within 48 hours, for less than €100 and without minimum share capital requirements.

The initiative has been gaining momentum for several years. In December 2024, EU-Startups reported on the EU–INC campaign, which had gathered more than 13,000 signatures calling for a unified European startup entity. The campaign advocated simplified incorporation, standardised investment documentation and a common employee share option framework to help startups attract talent and investment across borders.

Following the Commission’s proposal in March 2026, founders, venture capitalists and legal experts shared their initial reactions, welcoming the prospect of simpler company formation while questioning whether the framework would sufficiently address practical obstacles to international expansion.

Those concerns continued in June, when Elina Berrebi of Revaia argued that EU Inc. could address some of Europe’s most persistent startup challenges, particularly around corporate structures, employee equity incentives and the costs of expanding across jurisdictions.

More recently, the negotiations have prompted renewed concern among Europe’s startup community. On 15 October 2026, EU–INC campaigners warned that the proposal risked losing several of its central provisions, potentially reducing the reform to a faster company registration process without adequately addressing the complexities of operating across borders.

The Council of the European Union subsequently adopted its negotiating position on 23 October 2026, retaining the proposed 48-hour digital incorporation process and a European employee stock option mechanism, although with tighter eligibility requirements. However, provisions for a central European company register and a dedicated insolvency framework were removed, raising further questions about how much harmonisation the final legislation will achieve.

Beyond the paperwork

Against this backdrop, Stripe is calling for EU Inc. to be evaluated against three practical measures: how many companies choose to adopt the new framework, whether it reduces regulatory compliance burdens and whether founders consider it suitable for their business needs.

The company suggests establishing benchmarks for adoption during the first year following implementation, alongside measuring whether businesses incorporated under EU Inc. report spending less time dealing with regulatory requirements.

The research indicates an appetite for such changes. When asked which policy would help their companies grow faster and reach more markets, 36% of surveyed technology leaders identified administrative harmonisation and an EU Inc.-style corporate framework as their preferred solution.

“European founders are asking for clear, harmonized rules that enable them to innovate at scale,” says Eileen O’Mara, Vice Chair at Stripe. “EU Inc. is an opportunity for the EU to put Europe back on the global startup map. Let’s make sure we get it right.”

Europe’s widening tech gap

Stripe also places the debate within the broader challenge of European competitiveness. According to figures cited in its report, Europe’s technology sector has grown to nearly €3.6 trillion ($4 trillion) in value and supports more than 4.6 million workers. Nevertheless, the economic gap with the US has widened, with the American economy growing almost twice as quickly since 2019.

The company’s own SaaS Index, which analyses revenue trends across an average of 72,000 SaaS companies each week, also points to differences in growth. While US SaaS businesses have returned to and exceeded their 2024 growth rates during 2026, European companies have recovered to approximately their late-2024 and early-2025 pace.

For Stripe, this reinforces the importance of ensuring that policies intended to improve European competitiveness deliver tangible benefits rather than simply introducing new legislative structures.

With European institutions targeting a political agreement on EU Inc. by the end of 2026, the findings add another perspective to the debate surrounding the proposed framework. For founders and investors, the central question is increasingly not whether Europe will introduce a new corporate structure, but whether that structure will make it meaningfully easier to launch, finance and scale a startup across the continent.

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