Europe has a large integrated market, a common currency used by many member states (21 overall including Bulgaria being the newest member of the Eurozone), and free movement of goods, services, capital and people. Yet companies operating in the European Union still face a fundamental obstacle: corporate law remains largely national. A company established in one member state may need to deal with different incorporation procedures, governance rules, accounting requirements, employment regulations, tax systems and administrative platforms when expanding into another. For large corporations, these costs may be manageable. For startups and small and medium-sized enterprises, however, they can be a significant barrier to growth.
The proposed EU Inc., commonly described as the EU’s “28th regime,” was submitted by the European Commission in March 2026 to address this problem. It would create an optional, pan-European corporate legal framework that operates alongside the 27 national systems. Rather than replacing national company law, EU Inc. would offer businesses an additional legal form designed specifically for companies seeking to operate and scale across borders.
The term “28th regime” does not refer to a new EU member state. It describes an additional legal framework available across the Union. At present, businesses generally operate under the company law of one of the EU’s 27 member states. Each national system has its own rules concerning matters such as company formation and registration; share ownership and transfers; directors’ duties and liability; corporate governance; capital requirements; insolvency; employee participation; reporting and accounting; digital administration; mergers and restructuring.
An optional EU-wide framework would sit above—or alongside—these national systems. A founder could choose to establish an EU Inc. company instead of using a national company form, particularly if the business expects to raise investment or expand into several member states. The concept is comparable in principle to the idea of a common “European company” form, but EU Inc. is presented as a more modern, digital-first structure focused especially on startups, scale-ups and innovative businesses.
The proposal responds to a long-standing concern about Europe’s ability to create and retain globally competitive companies. The EU has substantial scientific, technical and entrepreneurial capacity, but many European startups struggle to move from an early-stage business into a company operating throughout the Single Market. One reason is that Europe’s legal and administrative systems remain fragmented. A company may be able to sell online across borders relatively easily, but expanding its legal and operational presence can be much more complicated. It may need to among others register branches or subsidiaries in other countries; obtain local tax and business registrations; comply with different employment rules; translate legal and administrative documents; engage local advisers; adapt contracts and corporate procedures; deal with multiple public authorities and digital systems; manage separate reporting and compliance obligations.
These tasks increase costs and consume management time. They may also discourage founders from expanding beyond their home market. The broader policy objective is therefore to make the European Single Market function more like a genuinely unified market for business formation and growth.
Although the proposal remains subject to the EU legislative process and may change, its central concept is built around several key features:
1. An optional European company form:
EU Inc. would not force companies to abandon existing national company structures. Businesses would be able to choose whether to incorporate under the law of a particular member state or the new EU Inc. framework. This optional character is important politically and legally. National company forms would continue to exist, while founders seeking a cross-border structure could use the European alternative. The choice could be especially attractive to technology startups, venture-backed companies, research and innovation businesses, digital platforms, etc.
2. Digital incorporation:
One of the most prominent aspects of EU Inc. is its digital-first design. The intention is that companies should be able to complete formation and subsequent administrative procedures online, using standardised processes and interoperable systems. This could reduce the need for paper documents, in-person appointments and repeated submissions of the same information to different authorities. Digital incorporation could involve online submission of formation documents, standardised articles of association, digital identification of founders and directors, online filing of corporate changes, electronic communication with authorities, automated access to official company information, digital ownership and share-management tools.
Supporters have discussed very rapid formation, including a possible 48-hour incorporation target under appropriate conditions. The practical success of such a system would depend on how effectively national company registers and digital identity systems are connected.
3. Standardised corporate rules:
A central purpose of the 28th regime is to give companies a more predictable legal environment. Under the current system, a business expanding from one country to another may need to understand several different sets of corporate rules. A standard EU Inc. framework could provide common provisions for: the company’s legal personality, share capital and ownership, share transfers, founder and investor rights, management structures, directors’ responsibilities, general meetings, corporate resolutions, mergers and reorganisations, dissolution and liquidation.
Uniform rules would not eliminate every legal difference across the EU. Taxation, employment, social security, sector-specific regulation and insolvency rules may still involve national or separate European legislation. Nevertheless, a common corporate framework could reduce one important layer of complexity.
4. Easier cross-border expansion:
A company using EU Inc. would be designed from the beginning to operate across member states. In theory, this could make it easier to open operations in another EU country, establish branches or subsidiaries, transfer or reorganise parts of the business, recruit employees in different jurisdictions, enter commercial contracts across borders, attract investors from other member states, move from one national market to another, use a single recognised corporate identity throughout the EU.
The aim is not necessarily to remove all local obligations. A company would still have to comply with the laws applicable to the activities it carries out in each country. For example, employment, consumer protection, environmental, licensing and tax requirements could continue to vary. The benefit would be that the company’s core legal structure would be more consistent wherever it operates.
5. Better conditions for investment:
European companies often raise funding through complex combinations of national company forms, shareholder agreements and special contractual arrangements. Investors may face uncertainty when comparing companies incorporated under unfamiliar national laws.
A standardised EU Inc. structure could make companies easier for investors to assess. Venture capital funds and other investors might benefit from: more familiar governance rules, standardised shareholder rights, more predictable procedures for issuing shares, easier cross-border investment, simpler due diligence, greater comparability between companies, more efficient exits, mergers and acquisitions. This could be particularly valuable for startups that need to raise several rounds of investment as they grow.
A common legal structure, however, would not by itself solve Europe’s wider financing challenges. Access to late-stage capital, pension-fund investment, public markets and cross-border venture capital would still depend on broader financial and economic conditions.
While the initiative is aimed at boosting the EU’s single market competitiveness, it has also sparked significant debate. Supporters argue that it is an essential tool to foster innovation and allow European companies to compete globally by reducing red tape and incentivizing investment. Critics, including various labour organisations, have raised concerns about the potential for regulatory arbitrage. There is apprehension that the new regime might undermine existing collective bargaining rights, labour standards, and shift corporate risks away from companies and onto workers. Other experts have questioned whether the proposal, in its current form, effectively addresses the complexities of harmonizing diverse legal traditions across the member states.
As of October 2026, the proposal remains a key subject of legislative discussion within the European Parliament and the Council, with ongoing tracking of its progress and refinement. The political objective to finalise the text by the end of 2026, so that the entry into force would be in 2027–2028.
To conclude, the proposal for an EU Inc. corporate legal framework provides faster (within 48 hours), cheaper (maximum EUR 100) and fully digital company registration, simplified procedures throughout the company life cycle, easier digital share transfers and capital operations, support for modern financing instruments, and the possibility for Member States to allow access to public equity markets. It also introduces fully digital insolvency procedures and automatic transmission of company data to relevant authorities in line with the “once-only principle,” while including safeguards against fraud and abuse. Moreover, it will provide a common optional scheme for employee stock options with harmonised deferred taxation, which will enable EU Inc. companies to attract the best talents.
