The European Union aspires to unleash the potential of the single market and is focusing on the elimination of administrative barriers. To this end, the European Commission has proposed EU Inc, a single harmonized set of corporate rules that seeks to facilitate the creation, operation and growth of companies throughout the region and, in this way, encouraging them to remain in Europe.
It is, as the organization explains in a statement, an optional and digital European corporate framework by default. It is presented as the cornerstone and starting point of the so-called 28 regime of the European Union, a legal framework of the Union that companies can opt for, instead of navigating through multiple national regimes. The 28 regime includes EU Inc., as well as other measures so that innovative companies have access to financing and operate easily across borders.
“Expanding across EU borders means navigating a fragmented business legal landscape”
“For too many entrepreneurs and innovative companies today, expanding across EU borders means navigating a fragmented business legal landscape.”; they explain from the European Commission. “Innovative European companies face 27 national legal systems and more than 60 corporate legal forms. This complexity can delay starting a business for weeks or even months, slowing growth, increasing costs, and discouraging scale.”.
EU Inc’s proposals
EU Inc. seeks to find a solution to all of this. It mainly proposes faster registration by facilitating the creation of companies in 48 hours, for less than 100 euros and without minimum share capital requirements. All this from anywhere in the European Union, and completely online thanks to simpler procedures. Companies will only have to submit their information once, through a scale interface that will connect national business registries; and they will be free to choose the Member State in which they join.
The intention of the proposed system is also to promote innovation, by helping businessmen and entrepreneurs start businesses faster and cheaper. According to the Commission, EU Inc. companies will have access to simplified and digital liquidation and insolvency procedures to facilitate operations. “This allows founders to test innovative ideas and start over if necessary.“, they point out.
The plan also aims to attract investment. The proposal seeks to eliminate in-person procedures, provide digital procedures for financing operations and simplify the transfer of shares. In addition, it will also allow Member States to give EU Inc. companies access to the stock exchange.
In addition, EU Inc. will provide more flexibility in creating different classes of shares with different economic or voting rights, which the agency said would help owners protect their businesses against hostile takeovers.
On the other hand, the system is also presented as favorable for attracting talent. EU Inc. companies will be able to establish stock option plans for employees throughout the community region, and the stock option will only be taxed on the income generated once it is sold.
The Commission assures that the proposed framework will not replace the corporate, tax or labor law of each member country, which will remain fully in force. However, Regime 28 will provide an additional, optional set of rules for companies wishing to operate across the Union.
Additionally, the proposal includes a list of prohibited practices to ensure that EU Inc. companies are treated the same as any other domestic company.
EU Inc is a response to the conclusions of the Draghi report, presented at the end of 2024 and which highlighted the urgent need to improve the competitiveness of the European Union, in particular by facilitating the expansion of innovative companies in Europe. In this sense, its objective is to reduce fragmentation, boost competitiveness and respond to the needs of innovative companies.
The proposal still has to be debated in both Parliament and the European Council, although the Commission hopes to reach an agreement before the end of 2026. “With EU Inc., we are making it dramatically easier to create and grow a business across Europe. Any entrepreneur will be able to create a company within 48 hours, from anywhere in the European Union, and completely online” commented Ursula von der Leyen, President of the European Commission. “This crucial step is just the beginning. Our objective is clear: one Europe, one market, between now and 2028.”
