The EU Inc. is here: a digital-first, pan-European company form under the proposed 28th Regime, designed to cut cross-border red tape for innovative firms.
Following the closing of the public consultation conducted in 2025, on 18 March 2026 the European Commission (the Commission) presented its proposal for a Regulation of the European Parliament and of the Council establishing a 28th Regime corporate legal framework, providing for the creation of a new corporate form, the “EU Inc.” (the Proposal). The Proposal was adopted within a relatively short timeframe following the review of stakeholder feedback, notwithstanding that the initial timeline had envisaged its presentation later in 2026.
The Proposal introduces an optional, self-standing European corporate form, designed in particular for start-ups and scale-ups, while remaining open to broader use. At the same time, the EU Inc. is structured on the basis of existing EU company law principles, while departing from them in certain respects in order to modernise its functioning and enhance its attractiveness to investors.
A defining feature of the EU Inc. lies in its digital-by-default architecture, reflecting the broader objective of embedding company law within the Union’s evolving digital ecosystem. In this respect, the effectiveness of the regime is closely linked to a number of digital infrastructures and regulatory initiatives that are still under development or pending adoption at Union level. As a result, the framework may, at this stage, appear only partially operational, pending the full deployment of the supporting digital environment.
Background to the EU Inc. initiative
As already highlighted in a previous contribution on this topic, the report on the future of the Single Market prepared by Enrico Letta (2024) and the report on European competitiveness prepared by Mario Draghi (2024) both call for a reform of internal market rules aimed at creating a more favourable environment for innovative firms. These recommendations were subsequently reflected and developed in the Commission’s communication “A Competitiveness Compass for the EU” which sets out a broad and ambitious reform agenda (the Competitiveness Communication).
A central premise underlying both the Competitiveness Communication and the aforementioned reports is the recognition that the United States remains the primary destination for start-ups seeking to scale globally, as well as the leading global hub for venture capital and rapid expansion, particularly in AI-driven sectors. By contrast, while the European Union possesses significant structural strengths, including a favourable environment for building sustainable, high-quality companies, relatively lower initial talent costs and strong public support for research and development, it continues to face structural and legal fragmentation.
In particular, the persistence of divergent national frameworks across the 27 Member States, affecting inter alia the exercise of the freedom of establishment and the functioning of limited liability companies, continues to segment the internal market along national lines. This fragmentation, in turn, weakens the Union’s overall competitiveness and its capacity to attract and retain high-growth, innovation-driven companies.
Harmonisation, legal basis and the EU digitalisation framework
Against this backdrop, and building on a long-standing process of harmonisation in EU company law, initiated, inter alia, by the First Company Law Directive (68/151/EEC) of 9 March 1968, which introduced coordinated safeguards for members and third parties in relation to limited liability companies, the Commission proposed the introduction of a new legal structure, the EU Inc. The legal basis for the Proposal is Article 114 of the Treaty on the Functioning of the European Union (TFEU), which is the principal instrument of harmonisation provided under the EU Treaties.
Unlike earlier interventions based on the approximation of national company law regimes, the Proposal does not seek to further harmonise existing company forms within Member States. Rather, it introduces an optional, autonomous European corporate form, intended to operate alongside national regimes. In doing so, the Commission relies on Article 114 TFEU as a legal basis not only for approximation through directives, but also for the establishment of a uniform framework designed to improve the conditions for the establishment and functioning of the internal market.
In this respect, the Proposal follows, to a certain extent, the approach adopted for the “Societas Europaea” (SE) which has been transposed into the Luxembourg law of 10 August 1915 on commercial companies, as amended (the 1915 Law). While harmonisation of national company laws has historically been achieved primarily through directives, notably Directive (EU) 2017/1132 relating to certain aspects of company law and codifying previous harmonisation efforts in the field of company law (the Codification Directive), the creation of a supranational corporate form requires a legal instrument capable of ensuring uniform application across Member States. A regulation, by virtue of its direct applicability, is therefore particularly suited to establishing a company form intended to function seamlessly within the Union’s legal and economic environment.
Consistently with the objectives set out in the Competitiveness Communication, the Proposal is closely embedded in the broader digitalisation of company law and administrative processes at Union level. In particular, the effectiveness of the EU Inc. relies on its integration within existing and emerging digital infrastructures. To this end, the Proposal is closely linked to several key EU instruments, including:
- The Codification Directive, and in particular the provisions relating to the Business Registers Interconnection System (BRIS), an initiative linking business registers across EU and European Economic Area (EEA) countries and providing a single point of access via the European e-Justice Portal to search for information on companies and their foreign branches;
- Regulation (EU) 2015/848 of 20 May 2015 on insolvency proceedings (recast);
- Regulation (EU) No 910/2014 of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market (the “eIDAS Regulation”); and
- Regulation (EU) 2024/1183 of 11 April 2024 amending Regulation (EU) No 910/2014 as regards establishing the European Digital Identity Framework (the EUDIW Regulation).
The link between the Proposal and the EUDIW Regulation is of particular importance. The latter requires Member States to provide secure and interoperable digital identity wallets by 2026, enabling individuals to manage identity and credentials in a trusted environment. It also introduces the European Digital Identity Wallet (EUDIW), a secure application allowing users to store, share and electronically sign documents across the Union, for both public and private services, while maintaining control over their personal data.
In addition, the Proposal refers to further elements of the Union’s digital architecture that are still under development, notably the proposed Regulation on European Business Wallets. This initiative, presented in November 2025, aims to extend the digital identity framework to legal entities, including companies, SMEs and public administrations, thereby facilitating their operation across the internal market.
The way forward : implementation challenges and outlook
As outlined above, the Proposal is driven by a clear objective: to simplify and digitalise the European corporate environment, in particular for start-ups and scale-ups, by reducing administrative, financial and regulatory burdens that hinder cross-border growth. The anticipated benefits are significant, both in terms of cost savings for companies and increased efficiency of corporate operations across the internal market. More fundamentally, the 28th Regime introduces a genuinely transnational corporate framework, aimed at reducing fragmentation and regulatory competition, and strengthening the global competitiveness of European businesses. At the same time, the Proposal reflects a shift in regulatory logic, transferring part of the administrative burden from companies to public authorities through the implementation of digital infrastructures and the once-only principle.
However, the effectiveness of the EU Inc. framework will ultimately depend on its consistent and timely implementation across Member States. In particular, the proper functioning of the system presupposes the full deployment of the supporting digital infrastructure and effective cooperation between national authorities. Delays and divergences in implementation or administrative readiness may affect the uniform application of the regime and, consequently, its attractiveness in practice. In this context, while the Proposal represents an ambitious and potentially transformative step towards a more integrated single market for innovative enterprises, its success will depend not only on its legal design, but also on its practical operability within the Union’s institutional and administrative framework.
For more information see the key considerations of EU Inc.
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