EU Inc: what the EU’s proposed company law ‘28th regime’ could mean across Europe

The introduction of EU Inc is part of a broader strategy to strengthen the competitiveness of the European economy and was one of the recommendations of former European Central Bank president Mario Draghi in his report on the future of European competitiveness. The main objective of the regime is to enable innovative companies to operate under a single, harmonised set of EU-wide rules, covering relevant aspects of corporate, insolvency, labour and tax law.

EU Inc. will be introduced into the national law of every EU member state and governed by a single, directly applicable set of EU rules. Although particularly designed to respond to the needs of innovative companies, startups and scaleups, the route will be available to any founder or company and will sit alongside, rather than replace, existing national company forms.

The proposal for EU Inc. is expected to apply from 2028, 12 months after its entry into force, following adoption of the necessary implementing legislation establishing the multilingual EU templates, application forms and technical specifications for a planned EU central interface.

Policy rationale

EU Inc. aims to address the complexity faced by many European entrepreneurs and investors in navigating 27 national legal systems and more than 60 different company legal forms. By providing a single harmonised set of corporate rules, directly applicable across all member states, EU Inc. removes the need for companies to adapt to divergent national requirements at each stage of their lifecycle, unlocking the full potential of the single market and reducing the legal uncertainty and costs that currently deter cross-border investment.

Key features

The EU Inc. corporate legal framework as currently proposed includes the following main features:

• Faster and fully digital registration within 48 hours for a maximum cost of €100, with no minimum share capital requirement.
• Simplified procedures throughout the company lifecycle, with EU Inc. companies submitting their information only once via the EU central interface, which automatically transmits the relevant data to national business registers.
• A ‘digital by default’ approach throughout the company lifecycle, including fully online share transfers, capital increases and share issuances, as well as online general meetings and board meetings, with no paper-based alternatives required.
• Fully digital dissolution and liquidation processes enabling solvent companies to be wound up within approximately three months and simplified winding-up proceedings for insolvent EU Inc. companies conducted within six months through an electronic auction system for asset realisation.
• Access to public equity markets, with member states prohibited from preventing EU Inc. companies from seeking admission to trading on multilateral trading facilities such as SME growth markets, and with the option for member states to allow access to regulated markets.
• A common optional EU employee stock option plan, enabling EU Inc. companies to issue warrants to employees and board members across the EU. 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, with EU Inc. companies free to choose their member state of incorporation. A binding list of prohibited requirements would ensure that EU Inc. companies are treated no less favourably than comparable national company forms, preventing discriminatory measures by member states.
• Existing national employment and social laws would be fully preserved and apply to EU Inc. companies in the same way as to any other limited liability company, including rules on employee participation in company boards where applicable in the member state of registration.

In a further step, the European Commission will develop the EU central interface into a central digital register for EU Inc. companies, providing optional guided forms and models and serving as a single digital hub through which EU Inc. companies can manage their filings and access company information across the Union.

Expected impact across member states

Although EU Inc. would be introduced through a single directly applicable regulation, its practical significance and likely uptake is expected to vary considerably across the EU.

In some member states, existing company law frameworks already offer many of the features that EU Inc. seeks to provide including speedy incorporation, limited capital requirements and flexible governance arrangements. In those jurisdictions, the new regime is more likely to be viewed as an additional option for businesses with cross-border ambitions.

In others, the introduction of EU Inc. could offer a more significant departure from existing company law, particularly where national regimes impose more extensive incorporation formalities, capital maintenance rules or procedural requirements. Questions may also arise over the interaction between the new regime and existing domestic protections for shareholders, creditors and employees.

Drawing on its presence across the EU, Pinsent Masons has assessed the likely level of market uptake and degree of legal change in some EU jurisdictions, with links to detailed country briefings examining the opportunities and challenges presented by the proposal in each member state.

Ratings reflect Pinsent Masons’ assessment of the extent to which the proposed EU Inc. framework would differ from the existing domestic legal position in each jurisdiction and are intended as a high level comparative guide only. Consult the linked country briefings for detailed analysis. The proposal remains subject to negotiation and amendment, and these assessments may change as the legislative process develops.

Next steps

The Council of the EU finalised its negotiating position on the EU Inc. regulation (191-page / 965KB PDF) on 23 October, reflecting discussions between the EU member states. Its agreed position simplifies the framework, streamlines its digital and employee stock option provisions and introduces enhanced preventative controls and checks.

The proposal will now form the basis of discussions between the Council and the European Parliament. It may change in some respects before the final regulation to implement it is published.