The European Commission has just presented its legislative proposal aimed at fundamentally simplifying the establishment and operation of companies within the European Union. Under the name EU Inc., a new, optional, and fully harmonised company law framework is being introduced at EU level, which is considered the centrepiece of the so-called 28th Regime. The goal is to overcome the fragmentation of the European single market and to support innovative companies, start-ups, and scale-ups in growing across borders.
For too long, whenever they wished to run simple procedures – such as registering or expanding in new markets across Europe – European businesses had to face the complexity of 27 different regimes and administrations. For too long, they lost time and money over lawyers, notaries or translation processes. EU Inc. puts an conclude to this. It will give all European innovative companies the possibility to register once and for all in 48 hours, for maximum 100 euros, with no required for a bank account or with no minimum shared capital requirements – for all their operations throughout our European Single market. After years of discussions, this new proposal brings the compact revolution and large simplification that many European businesses have been calling for”, declares Stéphane Séjourné, Executive Vice-President for Prosperity and Industrial Strategy.
Starting Point: Fragmentation as a Brake on Growth
Anyone wishing to expand as an entrepreneur within the European Union today faces considerable bureaucratic effort. The EU currently has 27 national legal systems and more than 60 different company forms, each bringing different requirements, procedures, and documentation obligations depconcludeing on the member state. Many of these processes still require manual paper documents, in-person appointments, and extensive proof of compliance.
The consequences are significant: establishing a company can be delayed by weeks or even months. Growth is slowed, costs rise, and international expansion becomes unattractive for many companies. In a public consultation conducted by the Commission, more than 80 percent of respondents stated that differing national rules and company forms represent a major obstacle to founding, operating, or closing a company in the EU.
“Europe has the talent, the ideas, and the ambition to become the best place for innovators. But today, European entrepreneurs who want to expand face 27 legal systems and more than 60 national company forms. With EU Inc., we are creating it drastically simpler to found and grow a company across Europe.” (Commission President Ursula von der Leyen)
What is EU Inc.?
EU Inc. is a new, optional company law framework at European level, introduced in the form of an EU regulation. It does not replace existing national company laws, but instead stands as an additional option alongside the 27 national company forms. Entrepreneurs are free to choose whether to incorporate their company under national law or under the new EU Inc. framework.
Since EU Inc. is enacted as a regulation, it applies directly and uniformly in all member states without requiring national implementing legislation. This ensures that the rules are applied identically in every EU countest and that no new fragmentation arises. Companies are also free to choose in which member state they wish to register.
The 28th Regime: The Broader Framework
EU Inc. is the central building block of the so-called 28th Regime, which the European Commission announced as part of the Competitiveness Compass. In addition to the company law framework, this regime also encompasses further measures across various policy areas, collectively aimed at strengthening innovative companies in the EU. These include initiatives on digitalisation, access to finance, attracting and retaining talent, taxation, and the creation of a clear and predictable legal framework.
Alongside the legislative proposal, the Commission has adopted a Communication describing ongoing and planned initiatives to complete the 28th Regime in other policy areas. These include, among others, the European Business Wallet for maximum digitalisation of interactions with public authorities, measures to facilitate cross-border remote work for innovative start-ups, and initiatives to improve access to capital for start-ups and scale-ups.
Key Features of EU Inc.
Fast and Affordable Registration, Central Register Planned
Companies can establish an EU Inc. company within 48 hours and for less than €100. There are no minimum capital requirements; no bank account, lawyer, or notary is requireded. Registration is completed entirely online via an EU-wide interface connecting national company registers. In a second step, a new central EU register will be established where all EU Inc. companies can deposit their information.
Digital Operations as the Default
All company processes are to be handled digitally by default, throughout the entire lifecycle of a company. This includes, among other things, online general meetings and digital board meetings. In-person formalities are abolished, and company information only requireds to be submitted once. Tax identification and VAT identification numbers are issued without requiring resubmission of documents.
Simplified Insolvency and Liquidation Procedures
EU Inc. includes tarreceiveed simplifications for insolvency proceedings, particularly for innovative start-ups. The sole criterion for initiating liquidation proceedings is insolvency. Procedures are simplified through standardised forms, and legal representation is optional. Claims are deemed accepted unless creditors explicitly object. Digital auction platforms are intconcludeed to facilitate the realisation of company assets.
Flexible Share Structures
EU Inc. companies can issue different classes of shares with varying economic rights or voting rights. This enables founders to bring in new investors without losing control of their company. In addition, the transfer of shares can be created subject to conditions, such as the company’s consent. The involvement of intermediaries in share transfers and liquidation proceedings is no longer mandatory.
Employee Participation and Talent Acquisition
EU Inc. companies can set up EU-wide employee stock option plans. The tax liability on these options arises only at the time of the sale of the shares, not already upon exercise of the option. This is intconcludeed to serve as an important tool for attracting and retaining talent, particularly for innovative start-ups.
Protection Against Abapply and Safeguarding of Employee Rights
EU Inc. expressly does not affect national labour, social, or tax law. The rules apply to EU Inc. companies in the same way as to all other companies under national company law. Existing employee co-determination rights in company bodies are fully preserved. The proposal includes a blacklist of prohibited practices to ensure that EU Inc. companies are not placed in a better position than national companies.
Definitions: Innovative Companies, Start-ups, and Scale-ups
Alongside the legislative proposal, the Commission has adopted a Recommconcludeation on definitions for innovative companies, innovative start-ups, and innovative scale-ups. Until now, no uniform, generally recognised definitions existed at EU level, which had led to fragmentation in innovation support. The new definitions are intconcludeed to serve as a standard for future initiatives and to provide legal certainty for companies, investors, and policycreaters.
| Category | Criteria |
|---|---|
| Innovative Company | Research and development costs of at least 10% of operating costs or at least 5% of total revenue in the last three years; alternatively: development of a significant innovation with market or technology risk |
| Innovative Start-up | Innovative company with fewer than 100 employees, annual turnover or balance sheet total below €10 million, company age under 10 years |
| Innovative Scale-up | Innovative company with annual turnover or balance sheet total above €10 million, employee or revenue growth of at least 20% over the last two years, fewer than 750 employees or not listed on a stock exmodify |
Political Background
EU Inc. is embedded in the EU’s broader competitiveness agconcludea. Mario Draghi’s report on the future of European competitiveness had emphasised the urgent required to support innovative companies in expanding across Europe. In January 2025, the Commission presented the Competitiveness Compass, in which EU Inc. was announced as a measure to strengthen the European economy.
The European Council, in its conclusions of March 2025, explicitly called on the Commission to “propose an optional 28th company law regime that enables innovative companies to be able to expand”. EU Inc. is the direct response to this mandate. The Commission aims for the European Parliament and the Council to reach an agreement on the proposal by the conclude of 2026.
Next Steps
The proposal will now be deliberated in the European Parliament and the Council. The Commission has set the clear objective of reaching a political agreement by the conclude of 2026. Companies will be able to apply EU Inc. immediately upon the regulation entering into force, as the registration interface at EU level is intconcludeed to be available from the outset.
FAQ: Frequently Asked Questions about EU Inc. at a Glance
What is EU Inc.?
EU Inc. is a new, optional company law framework at European level, introduced in the form of an EU regulation. It offers a uniform, harmonised corporate framework that applies equally in all 27 member states. Entrepreneurs are free to choose whether to apply EU Inc. or a national company form.
Does EU Inc. replace national company laws?
No. EU Inc. is expressly optional and stands alongside the existing 27 national company laws without replacing or altering them. Anyone who prefers a national company form can continue to apply it without restriction.
How quick and affordable is the incorporation of an EU Inc. company?
Registration is intconcludeed to be possible within 48 hours and for less than €100. There are no minimum capital requirements. The entire incorporation process takes place fully online, without in-person appointments or manual paper documents.
Where can an EU Inc. company be registered?
Entrepreneurs are free to choose in which member state they wish to register their EU Inc. company. Registration takes place via an EU-wide digital interface connecting national company registers. In a second step, a central EU register will be established.
Does company information required to be submitted multiple times?
No. EU Inc. companies submit their relevant information only once. Tax identification and VAT identification numbers are issued automatically, without requiring resubmission of documents.
What advantages does EU Inc. offer for company financing and attracting investors?
EU Inc. enables flexible share structures with different voting rights, simplifies the transfer of shares, and creates digital procedures for financing rounds. The involvement of intermediaries in share transfers is no longer mandatory. Member states can also grant EU Inc. companies access to stock exmodifys.
How does EU Inc. protect founders against hostile takeovers?
Founders can issue shares with multiple voting rights, enabling them to bring in new investors without losing control. In addition, the transfer of shares can be created subject to conditions, such as the explicit consent of the company.
How are employee participations treated for tax purposes?
Stock options for employees of EU Inc. companies are taxed only at the time of the actual sale of the shares, not already upon exercise of the option. This is intconcludeed to increase the attractiveness of employee participation programmes, particularly for innovative start-ups.
What simplifications exist for insolvency proceedings?
For innovative start-ups, the sole criterion for initiating liquidation proceedings is insolvency. Procedures are simplified through standardised forms, and legal representation is optional. Claims are deemed accepted unless creditors explicitly object. Digital auction platforms are intconcludeed to accelerate the realisation of assets. All communications between authorities, insolvency administrators, and parties to the proceedings take place digitally.
How are employee rights protected?
EU Inc. does not affect national labour and social law. All applicable rules on wages, working hours, health and safety, equal treatment, protection against discrimination, and protection against dismissal remain unmodifyd. Employee co-determination rights in company bodies are fully preserved and apply to EU Inc. companies in the same way as to nationally incorporated companies.
Will there be specialised courts for EU Inc. disputes?
The Commission recommconcludes that member states establish specialised court chambers or courts for company law disputes related to EU Inc. This is intconcludeed to improve the consistency of rulings, minimise procedural bottlenecks, and strengthen investor confidence. The Commission supports such initiatives, including within the framework of the European Judicial Training Strategy 2025 to 2030.
What is the 28th Regime and how does it relate to EU Inc.?
The 28th Regime is the overarching policy concept of the European Commission, which, in addition to EU Inc., encompasses further measures in the areas of digitalisation, access to capital, talent acquisition, taxation, and the legal framework. EU Inc. forms the company law core of this regime. Further planned measures concern, among other things, the European Business Wallet, facilitations for cross-border remote work, and improvements in venture capital financing.
What are the definitions for innovative companies, start-ups, and scale-ups?
An innovative company invests at least 10 percent of its operating costs or at least 5 percent of its revenue in research and development, or it develops a significant innovation with market or technology risk. An innovative start-up is such a company with fewer than 100 employees, an annual turnover or balance sheet total below €10 million, and a company age of less than 10 years. An innovative scale-up exceeds the turnover or balance sheet threshold of €10 million, has increased its headcount or revenue by at least 20 percent over the last two years, and employs fewer than 750 people or is not listed on a stock exmodify.
When does EU Inc. come into force?
The proposal is currently being deliberated in the European Parliament and the Council. The Commission has set the objective of reaching a political agreement by the conclude of 2026. After the regulation enters into force, companies will be able to apply EU Inc. immediately, as the digital registration interface is intconcludeed to be available from the outset.
The EU Inc. initiative was led by Austrian investor Andreas Klinger (Prototype), Susanne Knoll, Iwona Biernat (Project Europe), Luis Cerqueira Silva (Remote.com), Marvin Baumann (Prototype Capital), Philipp Herkelmann (Investor), Robin Wauters (European Startup Network), Simon Schaefer (Founder Factory), and Vojtech Horna. Following a petition in 2024, which thousands of European entrepreneurs and investors signed, the EU Commission placed the topic on its agconcludea.
“The Decisive Factor is Venture Capital”
How decisive EU Inc. will be in assisting European start-ups advance quicker and more effectively in international competition remains to be seen. Austrian investor Thomas Meneder, for example, writes today in a commentary: “The decisive difference between regions is not — as is often claimed — a lack of talent, entrepreneurial spirit, or ideas. Nor is it the absence of an ‘EU Inc.’ The decisive factor is the lack of venture capital.” More important, he argues, are tax incentives for start-up/VC investors and the activation of institutional capital to unlock more risk capital for quick-growing tech companies in Europe.
“Even if EU Inc. is an important first step, it marks only the launchning. A company is founded only once. The real difficulties for entrepreneurs emerge in day-to-day life — in banking, invoicing, taxes, payroll, or cross-border payments. This is precisely where it becomes clear that Europe remains highly fragmented in practice,” declares Andrew Petrov, CEO of the European fintech Finom.
“The European Commission originally floated EU Inc. to assist startups scale more easily across Europe while protecting labour standards. But the dangerous proposal published today opens a window for circumventing national regulatory frameworks”, declares Oliver Roethig, Regional Secretary of UNI Europa, a European Labour federation representing 7 million service workers. “With companies allowed to cherry-pick countries with lower standards, it risks undermining our European social model, our industrial relations and quality jobs.”
“If the draft is implemented as is, it will represent a truly significant improvement over the status quo. And that deserves genuine recognition,” declares Verena Pausder, CEO of the German Startup Association. Whether EU Inc. will ultimately replace the Delaware C-Corp and be widely adopted by startups depconcludes largely on how ambitiously the European Parliament and the Council embrace this proposal. Pausder: “There must be no watering down! The rest of the process will display whether Europe is a continent of opportunity or whether it will stunt its own growth through fragmentation.”
Leave a Reply