EU Inc.’: The European Commission's Proposal for a 28th Regime Corporate Legal Framework

April 9, 2026 

On 18 March 2026, the European Commission released its Proposal for a Regulation on the 28th Regime Corporate Legal Framework – ‘EU Inc.’, as part of a broader package of measures to enhance the competitiveness of the EU economy. The proposal responds to the call in the Draghi Report to close the innovation gap with other major economies and boost productivity. 

Background

Companies, particularly startups and scaleups, are central to the drive for growth, but require a predictable legal framework adapted to the digital economy. A key challenge is the fragmentation of corporate rules across Member States, which creates obstacles within the single market. The proposal addresses this fragmentation by introducing a harmonized company legal form across all Member States, covering the full company lifecycle, from formation through to liquidation and insolvency, while also proposing harmonized rules to attract private investment. The overall objectives are to provide better conditions for starting a business, better growth and scale-up opportunities, and to encourage investment into EU companies at early and growth stages.

Formation and legal form

EU Inc. companies are limited liability companies that can be formed by one or more natural or legal persons. They acquire legal personality upon registration in the business register of the Member State of their registered office, are recognized by every Member State, and founders are free to choose where to incorporate within the Union. Upon registration, an EU Inc. is allocated a European Unique Identifier (EUID) and is established for an unlimited period, unless otherwise provided in the articles of association.

Formation is possible either through an EU central interface on the existing Business Registers Interconnection System (BRIS), allowing for a "fast-track" procedure within 48 hours at a maximum cost of EUR 100, or through a fully online procedure with the national business register. The fast-track procedure requires standardized articles of association; otherwise, standardized or tailor-made articles may be used.

The articles of association must be machine-readable, stored in structured data, and drawn up in the official language(s) of the Member State of registration as well as in a language customary in international business (i.e., English). EU Inc. companies can also be incorporated through domestic or cross-border conversions, mergers, or divisions.

Once-only submission for authorities

Following registration, the business register must immediately exchange, in digital form, the relevant information (including the EUID and data needed for the TIN, VAT identification number, and beneficial ownership register) with all relevant public and social security authorities. The EU Inc. is not required to submit this information separately and must obtain its TIN and VAT identification number digitally and without delay, without a separate application, except in limited justified cases.

Applicable law

EU Inc. companies are governed by the Regulation and their articles of association. Matters not covered are governed by national law, including provisions transposing Union law applicable to relevant national legal forms in the Member State of the registered office. Each Member State must designate the relevant national legal form whose provisions apply to EU Inc. companies.

Governance, digitalization and shares

An EU Inc. company is managed by a board of directors, composed of one or more directors, at least one of whom must be a Union resident. General meetings and board meetings may be held fully online or in hybrid form.

EU Inc. companies are entitled to conduct all regulatory procedures fully online, with physical presence required only in exceptional, justified circumstances. Shares are always dematerialized and digitally registered and transferred. Free transferability applies unless the articles of association provide for restrictions, such as pre-emptive rights or prior company approval. Transfers may be concluded fully online.

Financing

Shares of an EU Inc. company have no nominal value (unless otherwise provided in the articles of association) and there is no minimum capital requirement. However, all distributions are subject to a balance sheet test and a solvency test to ensure the company remains viable and able to satisfy creditor claims.

EU Inc. companies can opt into the EU common scheme for employee stock options (EU-ESO), under which warrants are issued to eligible persons such as employees and board members. The warrants are subject to a minimum vesting period and may not be issued to persons who already hold a significant stake in the EU Inc. Taxation of income derived from the warrants is deferred to the moment of disposal of the shares, with the taxable income equal to the difference between the fair market value at disposal and the acquisition price.

Closure and insolvency

Where an EU Inc. company undergoes solvent liquidation, dissolution must be filed fully online. A fast-track liquidation procedure is available provided that, at the date of dissolution, the company has ceased its economic activity, has no assets or liabilities, and is not subject to any pending proceedings. Based on the current draft, no notary public or (statutory) auditor appears to be involved in the process.

Simplified insolvency procedures are also available for EU Inc. innovative startups. Insolvency is established when the company is unable to pay its debts as they fall due. Either the startup or any creditor may submit a request for simplified winding-up proceedings using a standard form, without mandatory representation by a lawyer or legal professional. The simplified insolvency procedure should be closed within 6 months, extendable once by a maximum of six months when more time is needed for the sale of assets or the distribution of the proceeds.

Prohibited requirements

The proposed regulation sets out a list of prohibited requirements to ensure that Member States treat EU Inc. companies in a non-discriminatory manner vis-à-vis other legal forms, for example, prohibiting criteria that deny eligibility to public support based on the company's headquarters being in another Member State.

Impact on existing companies

The EU Inc. framework is an optional 28th regime that existing companies can adopt through conversion, merger, or division. It does not replace national company forms but offers a harmonized, EU-wide corporate structure. Existing companies can convert into an EU Inc. company, subject to a two-year waiting period, with only limited one-off adjustment costs expected.

Key benefits include significantly reduced administrative burdens, fully digital registration and filing procedures, simplified cross-border subsidiary formation, and automatic EU-wide recognition without apostille requirements. The framework also offers flexible capital structures, no minimum capital requirement, and favorable employee stock option treatment with taxation deferred until share disposal.

What's next?

The proposal is put forward under Article 114 TFEU and therefore follows the ordinary legislative procedure, requiring negotiation and approval by both the European Parliament and the Council of the EU, with adoption by qualified majority voting. While the legislative process normally takes 12–18 months, there is strong political will to finalize and adopt the Regulation by the end of 2026. Resistance from Member States can nonetheless be expected, particularly regarding the tax provisions, most notably those in Article 79.

Some first comments

• EU Inc. addresses the most significant friction points for businesses targeting the EU market (legal complexity across 27 jurisdictions, slow and costly registration, fragmented investor procedures, barriers to cross-border talent equity, and burdensome exit processes), replacing them with a single, predictable, fully digital framework. From the moment of incorporation (48 hours, EUR 100, zero minimum capital) through day-to-day governance, financing rounds, cross-border branch opening, and even winding-up, every stage of the company lifecycle is designed to be faster, cheaper, and more legally certain than what any single national system currently offers. For businesses targeting the EU, this translates directly into reduced time-to-market, lower transaction costs, and a stronger foundation for raising capital and attracting talent at scale.
• Existing companies also stand to benefit, but converting an existing structure into an EU Inc. company will require time and money. Existing companies may convert into EU Inc. companies via domestic conversion, domestic merger or division, or cross-border conversion, merger or division of limited liability companies. EU Inc. companies may open branches in other Member States through the EU central interface, applying the once-only principle: the registering business register automatically retrieves parent company data from BRIS without re-submission. The 48-hour/EUR 100 fast-track is available for branch registration as well.
• The EU Inc. significantly curtails the traditional role of notaries compared to regular national company forms, with no notarial role in formation when templates are used, and no notarial role in capital increases or decreases. For incorporation, when EU template articles are used, any national requirement for notarial authentication is deemed automatically fulfilled, with preventive control, which may still be notarial, capped at 48 hours and EUR 100. For share transfers and capital increases, Member States are explicitly prohibited from requiring notarial deeds as a condition of validity.
• The impact on auditors is limited. An independent expert report is required for contributions in kind to capital and for capital reductions, though both can be waived under specific conditions. The fast-track solvent liquidation procedure is fully digital with no explicit auditor or liquidator role. Outside these specific transactional moments, the EU Inc. framework deliberately minimizes mandatory third-party involvement.
• The EU Inc. shares a remarkably similar corporate-law DNA with the Belgian BV/SRL, which is no coincidence, as the BV/SRL’s 2019 reform under the Belgian Companies and Associations Code was itself a modernization exercise that anticipated many of the same policy choices now embedded in the EU Inc. proposal. The Belgian Companies and Associations Code abolished the entire capital concept from BV/SRL regulation, and EU Inc. likewise requires no minimum capital, with creditor protection instead achieved through a balance sheet test and a solvency test. On governance, both allow a single director, flexible share classes, multiple voting rights, and non-voting shares. General meetings in EU Inc. companies can be held fully online, with written resolutions permitted, a flexibility that mirrors the BV/SRL's existing rules. Moreover, the proposal provides that matters not covered by the EU Inc. Regulation or the articles of association are governed by national law, and that each Member State must designate the national legal form whose provisions apply by default. For Belgium, the BV/SRL is the only logical choice. This would make the BV/SRL the gap-filling reference framework for any question the EU Inc. Regulation leaves unanswered.
• While the European Commission’s EU Inc. proposal deliberately limits tax harmonization to avoid unanimity constraints in the Council, recent parliamentary initiatives have brought the tax dimension back into focus. In March 2026, the European Parliament’s Subcommittee on Tax Matters (FISC) published a draft own‑initiative report arguing that the fragmentation of national tax systems significantly hampers the growth and cross‑border scaling of innovative companies. The report advocates a layered and modular approach to the 28th regime, with corporate law as a starting point but accompanied by a clear roadmap for the gradual integration of tax elements. Suggested building blocks include a consolidated corporate tax base or cross‑border loss relief, a centralized VAT framework with a single EU VAT number, exemptions from withholding taxes within the regime, simplified transfer pricing through safe harbors, coordinated R&D tax incentives, and a harmonized tax treatment of employee stock options. Although non‑binding, the initiative is likely to influence the legislative debate by highlighting the fiscal gaps in the current EU Inc. proposal and by framing taxation as a key factor for EU competitiveness.