Adrian Galea responds to EU Inc. criticism, argues proposal could unlock growth for Malta

Adrian Galea, Founder of Clutch Play Advisors, has weighed in on the ongoing debate surrounding the European Commission’s proposed EU Inc. framework, offering a contrasting perspective to concerns recently raised by Bernard Mallia, CEO of Equinox Group, in an article published on MaltaCEOs.mt.

While Mr Mallia warned that the proposal could amount to “money down the drain” or even pose an “existential threat” to Malta’s competitiveness, Mr Galea argues that such concerns may overlook key elements of how the framework is designed to function in practice.

At the core of the debate is the proposed creation of a so-called “28th regime” – an optional, EU-wide corporate framework intended to simplify cross-border operations and reduce regulatory fragmentation.

Mr Galea describes the initiative as a long-overdue response to structural inefficiencies that have hindered Europe’s ability to scale innovative companies.

“The EU’s 27 nations rarely feel tightly knit together,” he writes, pointing to fragmentation as a persistent barrier to growth within the European startup ecosystem.

The proposal has already garnered significant backing from founders, investors and industry stakeholders, with thousands supporting efforts to introduce a unified legal framework for companies operating across the bloc.

Addressing Europe’s competitiveness gap

According to Mr Galea, the urgency behind the EU Inc. proposal must be viewed within a broader global context, where the European Union is struggling to keep pace with larger, more unified markets such as the United States and China.

He argues that Europe’s challenges are twofold: A lack of large-scale innovation and an inability to retain high-growth companies, many of which relocate abroad in search of more favourable conditions.

In this context, the EU Inc. framework as a potential catalyst for change, enabling startups to “incorporate once and operate across all 27 member states under a single, unified set of rules.”

Clarifying concerns around sovereignty and taxation

Responding indirectly to concerns raised by Mr Mallia regarding potential tax harmonisation and loss of national competitive advantages, Mr Galea emphasises that the proposal does not centralise taxation or employment rules.

Instead, companies established under the EU Inc. framework would still be required to select a Member State under which they are registered and governed.

This distinction, he suggests, is critical.

“Startups registering under the EU-Inc label will be required to select a member state under which to be registered and governed,” he writes, adding that this would mean businesses could still operate under Malta’s tax regime even if their founders are based elsewhere.

From this perspective, the framework could create a new avenue for smaller jurisdictions to attract international startups, rather than eroding their competitive position.

A potential opportunity for Malta

While acknowledging that concerns about regulatory arbitrage and sovereignty are valid, Mr Galea argues that these risks should be weighed against the potential upside.

He suggests that Malta could position itself as a business-friendly jurisdiction within the EU Inc. framework, leveraging its existing strengths to attract startups seeking a supportive regulatory environment.

“This results in a business opportunity for a small state like Malta to win startup business by embracing the 28th regime proposal.”

In doing so, Malta could align itself with the broader ambitions of the EU’s startup and scale-up strategy, rather than being sidelined by it.

‘One standard to scale startups across one Europe’

Mr Galea outlines several key features of the proposal that he believes could drive meaningful change, including a digital-first incorporation process, standardised investment instruments, and EU-wide frameworks for employee stock options.

Taken together, these measures aim to reduce administrative complexity and create a more seamless environment for companies seeking to scale across borders.

“ONE STANDARD to scale startups across ONE EUROPE.”

A debate still unfolding

The diverging views of Mr Galea and Mr Mallia highlight the broader tension at the heart of the EU Inc. proposal, which is balancing the benefits of harmonisation with the need to preserve national flexibility and competitiveness.

While critics caution against unintended consequences, proponents argue that the cost of inaction may be even greater, particularly in a global landscape where scale and speed are increasingly critical.

Mr Galea’s comments draw on an article he authored in September 2025, in which he explored the EU Inc. proposal in detail and argued that it could represent a “step function improvement” for Europe’s startup ecosystem.