20 Oct 2026, 3:43 pm
Businesses looking to set up operations in the EU should find that the proposed new ‘EU Inc.’ corporate structure offers a meaningful alternative to company forms that exist already in Spain.
The EU Inc. regime, proposed by the European Commission earlier this year, is still subject to agreement by EU law makers. However, if it is enacted as proposed, it would introduce a new corporate legal framework that companies will be able to opt into – allowing them to set up in an EU country and operate across the entire trading bloc in accordance with that single ‘28th corporate regime’, rather than navigate 27 different national frameworks as they need to do so currently.
Below, we examine the EU Inc. proposals in more detail and explore how they compare to the existing corporate regime in Spain.
The EU Inc. option is likely to be most attractive to startups, scale-ups and high-growth companies seeking to raise capital from investors across multiple EU jurisdictions. In particular, businesses with a cross-border focus may benefit from operating under a single harmonised corporate framework rather than navigating different national company law regimes.
It may also be attractive to venture capital-backed companies, technology businesses and founder-led growth companies, given the proposal's focus on digital incorporation, simplified corporate procedures, flexible capital operations and harmonised employee incentive schemes.
By contrast, purely domestic SMEs with no significant cross-border activities may have less incentive to adopt EU Inc., particularly given the flexibility and familiarity of existing Spanish company forms – including the ‘Sociedad de Responsabilidad Limitada’ (S.L.), which is the closest Spanish equivalent to EU Inc.
Both S.L. and the proposed EU Inc. legal forms provide separate legal personality and limited liability, making them suitable for founders, startups, and SMEs. In both cases, a company may be incorporated by one or more natural or legal persons, and ownership can be separated from the company’s management.
S.L. already offers a relatively flexible and well-established corporate framework, meaning that many domestic businesses may see limited benefit in moving away from existing company forms. As such, we would expect moderate use of the EU Inc. structure initially, concentrated among start-ups, scale-ups and venture capital-backed companies with cross-border ambitions.
Compared to the incorporation of S.L., the proposed EU Inc. would offer a more streamlined and harmonised incorporation process across the EU. In particular, the proposal envisages fully digital incorporation, faster registration procedures, reduced administrative formalities and a single set of corporate rules applicable across member states.
However, the differences may be less significant in Spain than in some other jurisdictions, as Spanish company law already allows the incorporation of an S.L. with limited liability, relatively low capital requirements and a considerable degree of flexibility. Accordingly, the principal advantage of the EU Inc. is not necessarily simpler incorporation as such, but the ability to operate under a harmonised EU-wide framework rather than a purely national one.
Therefore, from a Spanish perspective, the EU Inc. would be broadly comparable to an S.L. in terms of its core corporate features, with its main added value being the reduction of legal fragmentation for businesses operating across multiple EU jurisdictions.
Under the EU Inc. proposals, the process for incorporating an EU Inc. should take just 48 hours. Spanish law already provides a fast incorporation process for online S.Ls. Online registration using a standardised deed and model articles can take place within six working hours following the filing date, while other online incorporations have a maximum registration period of five working days.
However, the incorporation of a traditional S.L. can take up to 15 days to be registered in the Commercial Registry. In this respect, EU Inc. offers a faster and more efficient incorporation system, combining shorter processing times, a uniform procedure across the EU and capped incorporation costs.
There are certain requirements in Spanish domestic law that would not apply should companies opt to incorporate as an EU Inc. instead. For instance, under Spanish law, the incorporation of a company requires the execution of a public deed before a notary and its following registration with the Commercial Registry. Even in the case of an online S.L., the process still involves an electronic notarial deed and preventive notarial review.
In addition, transfers of S.L. shares must also be recorded in a public document, while many capital and constitutional changes require a public deed and registration. EU Inc. would allow incorporation, corporate filings and transfers of shares to be completed digitally.
There are material differences in capital requirements and capital maintenance rules too.
A S.L. may be incorporated with a minimum share capital of €1. However, if the company is liquidated with insufficient assets, the shareholders are jointly liable for the difference between €3,000 and the subscribed capital. Furthermore, 10% of annual profit must be allocated to the legal reserve until it reaches 20% of the share capital.
S.L. shares must have a nominal value and be fully paid upon incorporation, and work or services cannot constitute capital contributions.
EU Inc., by contrast, would require no minimum capital, and its shares would have no nominal value unless the articles of association for the company provide otherwise. Consideration for shares could include commitments to perform work or provide services, although such consideration could not be allocated to capital.
EU Inc. would therefore provide greater flexibility, accompanied by greater reliance on the directors’ financial assessment and liability.
EU Inc. could be more attractive to founders intending to raise international finance, establish operations in several member states or offer equity incentives to employees. Its flexible share classes, digital share register and ability to issue convertible instruments, warrants and employee share options may reduce the need for complex contractual arrangements.
For a small business operating only in Spain, however, the S.L. is likely to remain the more familiar and practical choice. EU Inc.’s benefits would be most significant if the company has a cross-border strategy or expects to undertake repeated investment rounds.
The most significant differences between the EU Inc. regime and Spain’s domestic corporate framework are unlikely to concern core shareholder protections, as Spanish company law already provides a robust framework for minority shareholder rights, voting rights, information rights and protections against abusive conduct.
The principal distinction lies in the fact that EU Inc. would operate under a single harmonised EU-wide regime, whereas Spanish shareholders are currently protected under the Ley de Sociedades de Capital and related Spanish corporate law rules.
Accordingly, the main advantage of the EU Inc. is not necessarily a higher level of shareholder protection, but rather greater legal certainty and consistency for shareholders and investors operating across multiple EU jurisdictions. Any assessment of substantive differences in shareholder rights will ultimately depend on the final version of the EU Inc. framework.
The main difference between the Spanish Companies Act and the proposed EU Inc. regulation lies in the approach to creditor protection. Spanish company law relies to a significant extent on ‘ex ante’ safeguards – measures put in place in advance, as opposed to measures to address issues after they have arisen. These include capital maintenance rules, mandatory legal reserves, restrictions on distributions, liability for unlawful distributions and directors' liability in situations such as a failure to address a statutory cause for dissolution.
By contrast, the proposed EU Inc. regulation appears to place less emphasis on traditional capital-based creditor protection mechanisms and greater reliance on the company's actual financial position, including balance sheet and solvency-based assessments when undertaking distributions or capital transactions.
Accordingly, the proposed regime may offer greater flexibility in relation to capital structure and financing arrangements. However, as the proposal remains subject to the legislative process, the precise scope of the creditor protection framework and the extent to which it will differ from existing Spanish law will depend on the final text adopted.
Certain protections currently available under Spanish company law could be modified or replaced under the proposed EU Inc. regulation. In particular, Spanish law relies on a number of mandatory rules designed to protect shareholders and creditors, including transfer restrictions in private companies, statutory withdrawal rights, capital maintenance rules, legal reserve requirements and other formal safeguards.
By contrast, the proposed EU Inc. regulation appears to favour a more flexible and harmonised approach, with greater emphasis on contractual freedom, digital procedures and solvency-based safeguards. As a result, some protections that apply automatically under Spanish law may either not exist in the same form or may be replaced by alternative mechanisms operating at EU level.
That said, the proposal is not intended to remove shareholder and creditor protections altogether, but rather to replace certain traditional safeguards with different protective mechanisms. The practical significance of those differences will ultimately depend on the final text adopted and its interaction with national law.
The two regimes are broadly comparable in terms of their core principles. Under Spanish law, directors are required to act with due care, loyalty, good faith and in the best interests of the company. They must comply with applicable laws and the company's constitutional documents, manage conflicts of interest appropriately and are liable for losses caused by breaches of their duties. Spanish law also provides a form of business judgment protection for informed decisions taken in good faith and without a personal interest.
Similarly, under the proposed EU Inc. regulation, directors would be required to act in the company's best interests, comply with the applicable legal framework and the articles of association, and disclose conflicts of interest. They would also be liable for breaches of duty causing loss to the company, while benefiting from protection for business decisions taken in good faith, on an informed basis and with reasonable care.
Accordingly, the main difference is not the existence of directors' duties themselves, but the fact that those duties would be governed by a harmonised EU-wide regime rather than by Spanish company law. Based on the current proposal, there do not appear to be material differences in the underlying standards of care, loyalty or director accountability.
Although the proposed EU Inc. regulation would establish a harmonised set of corporate rules at EU level, national law would be expected to remain relevant in areas that are not fully regulated by the regulation or are expressly left to member state law. In this respect, a number of domestic liability regimes would likely continue to apply. In Spain, this could include, among others, directors' liability in connection with a failure to address a statutory cause for dissolution, liability arising under tax and social security legislation, corporate criminal liability, and liabilities associated with insolvency proceedings. In addition, national rules concerning accounting, reporting and filing obligations, and the sanctions associated with their breach, would be expected to remain relevant to the extent not superseded by the EU Inc. framework.
Therefore, while EU Inc. seeks to harmonise core aspects of company law, it is unlikely to create a fully self-contained liability regime. Domestic law would continue to play an important role in a number of areas, particularly those linked to public law obligations, insolvency, taxation and other matters traditionally governed at member state level.
There is, however, likely to be some uncertainty as to how the harmonised EU Inc. liability regime and the domestic liability rules that would continue to apply under Spanish law interact. In particular, it remains unclear to what extent existing Spanish causes of action, such as liability for direct harm to shareholders or creditors, liability arising from a failure to address a statutory cause for dissolution, and liabilities connected with insolvency proceedings, would operate alongside the EU framework.
Further uncertainty may arise in relation to the operation of the proposed solvency-based safeguards and their interaction with existing domestic regimes, including insolvency, tax, social security and corporate criminal liability. Questions may arise regarding the standard of care expected from directors when assessing solvency, the evidence required to demonstrate compliance, and the extent of directors’ exposure where decisions are based on financial projections that subsequently prove inaccurate. As a result, the principal challenge is likely to be determining the precise boundary between the harmonised EU Inc. framework and the areas in which Spanish law would continue to apply on a supplementary basis, particularly until further legislative guidance and judicial practice become available.
The proposed EU Inc. regulation would govern the harmonised aspects of the winding-up and liquidation process, including the digital procedures and simplified mechanisms envisaged by the proposal. In particular, the proposal appears to contemplate a more digitalised approach to corporate dissolution and liquidation, including electronic communications, registry interactions and simplified procedures in certain situations.
Spanish law would nevertheless be expected to remain relevant in areas not fully harmonised by the EU Inc. regime, including taxation, employment matters, enforcement, accounting obligations, insolvency-related issues and other matters expressly left to national law. As a result, the practical implementation of a liquidation involving a company established in Spain is likely to continue to require consideration of domestic rules and authorities.
The ordinary liquidation of an EU Inc. would likely be broadly comparable to the liquidation of an S.L. under the Spanish Companies Act, although potentially subject to more streamlined and digitalised procedures. In the case of insolvency, domestic insolvency law would remain particularly significant in relation to jurisdiction, creditor ranking, secured claims, avoidance actions and directors' liability. The precise division between the proposed EU Inc. regulation and Spanish law will, however, depend on the final version of the regulation and its interaction with national law.
One area of uncertainty is the extent to which the simplified and digitalised winding-up procedures envisaged under the proposed EU Inc. regulation would interact with existing national insolvency regimes. While the proposal seeks to facilitate business closure and liquidation, insolvency proceedings would remain largely governed by domestic law.
As a result, questions may arise regarding the coordination between the EU Inc. regime and Spanish rules on insolvency filings, creditor ranking, avoidance actions, directors' liability and the classification of insolvency as culpable or fortuitous.
A further concern is that the increased reliance on solvency-based safeguards may shift greater responsibility onto directors when assessing the company's financial position. This could create uncertainty as to when directors are required to take restructuring or insolvency-related measures and how compliance with those duties would be assessed in practice. In the absence of established case law, the interaction between the proposed EU Inc. regulation and existing Spanish insolvency and directors' liability rules is likely to remain an area of legal uncertainty, at least during the initial implementation phase.
In addition, although the proposed EU Inc. regulation would harmonise certain aspects of insolvency and winding-up, a number of important insolvency-related matters would likely remain governed by national law. In the case of an EU Inc. registered in Spain, this would be expected to include, among others, jurisdiction and procedural aspects of insolvency proceedings, the ranking of claims, preventive restructuring mechanisms, certain aspects of directors’ liability, the treatment of tax, social security and employment-related claims, and other matters not fully harmonised at EU level.
In particular, Spanish law would be expected to remain highly relevant in relation to creditor ranking, insolvency-related directors’ liability, restructuring proceedings and the consequences of insolvency. It may also continue to govern issues such as the appointment and regulation of insolvency practitioners, the treatment of public-law claims, and the handling of assets or liabilities identified after the company has been removed from the register, to the extent these matters are not expressly regulated by the proposed EU Inc. regulation.
The most significant impact of the introduction of the EU Inc. regime would likely be the introduction of a single, harmonised corporate framework operating alongside national company law regimes. Compared to the current Spanish system, which still relies on a number of domestic formalities and procedures, the EU Inc. framework would place greater emphasis on digital incorporation, corporate governance and liquidation processes, potentially reducing administrative complexity for businesses operating across multiple member states.
There would be a different approach to shareholder and creditor protection too. Spanish company law traditionally relies on mandatory corporate law safeguards, including capital maintenance rules, legal reserves, statutory withdrawal rights, transfer restrictions in private companies and a range of formal creditor protection mechanisms. By contrast, the EU Inc. proposal appears to favour a more flexible model, placing greater emphasis on solvency-based safeguards, disclosure obligations and directors' responsibilities. As a result, some protections that apply automatically under Spanish law may be replaced by different mechanisms at EU level.
Ultimately, the proposal is designed with startups, scale-ups and cross-border businesses in mind and seeks to facilitate fundraising, employee participation and corporate mobility within the EU. As a result, the EU Inc. could offer a more investor-oriented framework than traditional Spanish company forms, particularly for businesses seeking to attract international investors or operate across several member states. Its principal added value, however, lies in regulatory harmonisation rather than the introduction of entirely new corporate law concepts.
The principal uncertainty is likely to be the interaction between the harmonised EU Inc. framework and the domestic legal regimes that would continue to apply at member state level. Although the proposal seeks to establish a common corporate framework across the EU, important areas such as insolvency, taxation, employment law, and certain aspects of directors' liability and creditor protection would remain governed, at least in part, by national law. As a result, the practical operation of an EU Inc. may vary depending on the EU country in which it is registered and conducts its activities.
The effectiveness of the proposed solvency-based safeguards and the extent to which they will replace more traditional corporate law protections is a further area of uncertainty. The operation of solvency tests, the standard of care expected from directors and the interaction between the EU Inc. regime and existing domestic liability frameworks are likely to require clarification through legislative guidance and judicial practice. Until a body of case law develops, businesses and investors may face some uncertainty regarding the interpretation and enforcement of aspects of the new regime.
Overall, EU Inc. is unlikely to replace domestic company forms in Spain entirely. However, it could become a meaningful alternative for businesses seeking to raise capital, attract talent and operate across multiple member states under a single harmonised corporate framework.
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