EU Inc. proposal risks undermining labor law, experts warn

The European Union's initiative to create a new corporate structure, EU Inc., aims to simplify operations for innovative companies and startups. However, concerns are mounting that the proposal, which allows businesses to register under EU-wide rules for a nominal fee and within 48 hours, could inadvertently create significant risks.

Experts and parliamentarians have highlighted potential problems, particularly regarding the fight against illicit activities. The ease of establishing and dissolving companies could facilitate money laundering, tax evasion, and the circumvention of sanctions. Furthermore, the proposal might allow companies to opt for legal frameworks in EU countries with weaker regulations concerning insolvency and minority shareholder protection, potentially weakening safeguards currently in place in countries like Finland.

A significant concern is the potential impact on worker rights. While the European Commission has stated the proposal does not concern labor law, critics argue that companies could exploit the system to choose jurisdictions with less robust employee representation and participation rights. This could lead to a significant weakening of workers' positions, mirroring issues seen with the existing Societas Europaea form, which has been used to create shell companies and circumvent national labor laws, as seen in a case involving Tesla in Germany.

The article argues that the EU's internal market and free movement principles have downsides, including labor crime, money laundering, and violations of working conditions within complex corporate structures and supply chains. The EU Inc. proposal, it contends, threatens to exacerbate these issues by making it easier for companies to operate and evade obligations. While promoting digitalization and fair markets is important, the article concludes that the foundation of European labor law should not be eroded without clear justification for the necessity of EU Inc.

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EU Inc:ssä on kyse uusista EU:n laajuisista ja -tasoisista yhtiöoikeudellisista säännöistä, jossa yritykset pääsevät valitsemaan maakohtaisten yhtiösääntöjen ja EU-laajuisen kehikon seuraamisen väliltä.