EU Inc. Proposal
What is it?
On the 18th March this year (2026) the Commission of the European Union presented its proposal for a new type of company structure, the EU Inc. It is a legal corporate framework following the announcement of the ”28th Regime” in January 2025, which in turn is part of a broader EU strategy to strengthen competitivness of the European economy through enabling innovative companies to operate under a single, harmonised set of EU-wide rules. The rules would cover relevant aspects of corporate, insolvency, labour and tax law. The EU Inc. is set to be the starting point and cornerstone of the 28th Regime.
The EU Inc. would be an optional, digital-by-default corporate framework particularly designed for innovative companies being available to any founder who considers it suitable, alongside existing national company forms.
Why the proposal?
European innovative companies are faced with 27 national legal systems and more than 60 company legal forms. This complexity can delay the setting-up of a company for weeks or even months, slowing growth, raising costs and discouraging scale. EU Inc. is at the heart of the Commission's response to these challenges: coming in the form of a regulation, it will provide a single harmonised set of corporate rules that companies can choose instead of navigating multiple national regimes, unlocking the true potential of the Single Market.
The aim of the EU Inc. is to establish a new, harmonised corporate legal regime across the European Union. It will make it easier for businesses to start, operate and grow across the EU – incentivising them to stay in Europe instead of looking better options elsewhere.
Key features (European Commission press release 18 march 2026)
· Faster registration: Entrepreneurs, founders, and companies will be able to found an EU Inc. company within 48 hours, for less than €100 and with no minimum share capital requirements.
· Simpler procedures: EU Inc. companies will only need to submit their company information once, via an EU-level interface connecting national business registers together. In a second step, the Commission will establish a new central EU register. EU Inc. companies will obtain their tax identification and VAT numbers without having to resubmit paperwork.
· Fully digital operations: Corporate processes will be digital by default throughout a company's lifecycle.
· Helping founders restart faster and cheaper: EU Inc. companies will have access to fully digital liquidation procedures. Innovative startups will have access to simplified insolvency procedures to facilitate the winding down of operations. This enables founders to try and test innovative ideas and start again if needed.
· Better conditions to attract investment: The proposal will remove in-person formalities, provide digital procedures for financing operations, and simplify the transfer of shares. There will no more mandatory involvement of intermediaries for share transfers, and liquidation procedures. The proposal will also allow Member States to give EU Inc. companies access to the stock exchange.
· Better means to attract talents: EU Inc. companies will be able to set up EU-wide employee stock option plans. The stock option will only be taxed on the income generated once it is sold. This is a crucial factor in ensuring attractiveness, particularly for innovative startups.
· Full access to the Single Market: EU Inc. companies will be free to choose the Member State in which they incorporate. The proposal includes a blacklist of prohibited practices to ensure that EU Inc. companies are treated the same way as any other national companies.
· Strong safeguards against abuse: National employment and social laws will apply to EU Inc. the same way they apply to any other business under national company law. The applicable safeguards of the Member State of registration will apply in full to the EU Inc. company, including when it comes to rules regarding co-determination.
· Flexibility of shares: EU Inc. companies will have the flexibility to create different classes of shares with varying economic or voting rights in order to help founders protect their business against hostile takeovers.
In addition, the Commission has adopted a Communication outlining the ongoing and future initiatives to complete the 28th Regime in other policy areas as well. Of these it could be mentioned that the Commission will further explore the possibility to allow 100% cross-border telework for innovative start-ups and scale-ups across the Union with the forthcoming Fair Labour Mobility Package.
Indeed, the Council of the European Union on 23th April 2026 have released a Joint Roadmap of the EU Parliament, the Council, and the Commission in which they commit to achieving One Europe, One Market. The Roadmap includes a timetable for a number of measures of which the EU Inc. proposal should be agreed on by the end of 2026.
Our take
The need and urgency to boost Europe`s economy and technological competitivness are clear and measures aiming at supporting these aims must be welcomed. Nevertheless not everybody are happy with the proposal and some differing views have been expressed. Concern over workers` protection has already been voiced as many commentators maintain that the EU Inc. model would make it more easy to circmumvent workers`rights. By free choice of the country of registration companies could establish in a country with weaker labour regulation.
The fast establishment of companies and restricted oversight pose another risk for workers`rights as well as for tax and social contributions compliance. Many fear that the relaxed rules provided by the EU Inc. could lead to unfair competition where non-compliant businesses could gain market advantage at the expence of more responsible agencies. Therefore the proposal should be reassessed before putting forward – if not totally withdrawn as the most extreme commentators have voiced.
It may be up for a debate how real these concerns are. Anyway, we can expect a bumby road along the way in handling the proposal. But there is yet another question that could water down the anticipated positive impact of EU Inc. regulation if and once it has been passed: Will European businesses harness this opportunity? The positive impact will be only reached through real adoption and execution.
How the proposal evolves remains to be seen.