EU Inc. Is Here: What Does the New 28th Regime Mean for Businesses?

If you want to expand your business across the borders of a single Member State today, you will run into 27 different legal systems and more than 60 forms of business entities. Different documentation requirements, in-person notary appointments, weeks of waiting for registration. According to the Commission, this fragmentation is one of the key reasons why European startups relocate to the US when scaling up.

EU Inc. is meant to be the answer.

What Is EU Inc. and Why Is It Being Created?

EU Inc. is an optional pan-European corporate framework introduced in the form of an EU regulation. This is an important detail, unlike a directive, a regulation applies directly and uniformly in all 27 Member States without the need for transposition into national law.

EU Inc. does not replace national company forms such as the Czech s.r.o., a.s., or any other domestic legal entity. It stands alongside them as an additional option. Entrepreneurs are free to decide whether to incorporate under national law or under the unified European regime.

The proposal builds on the Draghi Report on EU competitiveness and the Competitiveness Compass from January 2025. In March 2025, the European Council explicitly called on the Commission to "propose an optional 28th company law regime that enables innovative companies to expand."

How Will the 28th Regime Work in Practice?

The proposal introduces several fundamental changes compared to the current state of affairs:

Registration within 48 hours for less than €100. No minimum share capital requirement, no need to open a bank account upfront, no notary. The entire process takes place fully online.

One registration for the entire EU. Company information only needs to be submitted once, through an EU-level interface connected to national business registers. The Commission also plans to establish a central EU register. Tax identification and VAT numbers will be issued automatically, without the need to resubmit documents.

Fully digital operations. General meetings, board proceedings, and all corporate processes will be digital by default, throughout the company's entire lifecycle.

Flexible share structures. EU Inc. will allow companies to issue different classes of shares with varying voting or economic rights. This means founders can bring in investors while retaining control of their company.

EU-wide ESOP with favourable tax treatment. Employee stock options will be taxed only at the point of sale, not upon exercise. For startups that need to attract talent, this is a major shift.

Simplified insolvency for innovative startups. Fully digital liquidation proceedings and simplified insolvency procedures are designed to enable founders to restart faster if their first venture doesn't work out.

Share transfers without intermediaries. The mandatory involvement of intermediaries in share transfers and liquidation proceedings is eliminated. Member States may also grant EU Inc. companies access to stock exchanges.

What the Proposal Does Not Address

EU Inc. explicitly does not affect national labour law, social regulations, or tax systems. Member State rules on wages, working hours, employee protection, and co-determination apply to EU Inc. companies in exactly the same way as to any other national company form.

Taxation remains within the competence of Member States. While the Commission is working in parallel on the BEFIT initiative (a unified framework for corporate income taxation in the EU) and a head office tax system for SMEs, these proposals are separate from EU Inc., and their outcome remains uncertain.

The proposal also does not address sector-specific regulation. If you operate in fintech or healthtech, for example, you will still need to comply with the applicable regulatory requirements of the relevant country.

What This Means for Businesses

For founders and CEOs, EU Inc. is potentially a big deal. Many European startups currently set up holding structures abroad when preparing for an investment round (typically as a Delaware C-Corp) precisely because national corporate frameworks do not offer sufficiently flexible share structures, ESOP arrangements, or a fast, affordable incorporation process.

EU Inc. could largely address this need directly within the EU: flexible shares, a unified ESOP framework, 48-hour registration, and digital processes. All without leaving the European legal space.

However, it is important not to jump to premature conclusions. The proposal is at the very beginning of the legislative process, and its final form may change significantly during negotiations in Parliament and the Council. Implementation details such as how the register interconnection or access to national stock exchanges will work in practice — remain unclear.

What Comes Next and Why It Matters

The proposal now heads to the European Parliament and the Council. The Commission is pushing for a political agreement by the end of 2026. If everything goes according to plan, companies will be able to use EU Inc. immediately upon the regulation entering into force. The registration interface is intended to be available from day one.

Alongside the regulation itself, the Commission also presented a communication outlining further planned measures: a European Business Wallet, facilitation of cross-border remote work for startups, and a review of the rules governing European venture capital funds.

We will be following the legislative process closely, and in an upcoming analytical article, we will take a closer look at the specific implications for businesses, including a comparison of EU Inc. with existing national company forms, tax aspects, and practical questions around ESOP.