EU INC.: THE NEW EUROPEAN COMPANY IN 10 KEY POINTS

EU INC.: THE NEW EUROPEAN COMPANY IN 10 KEY POINTS

20 May 2026

On March 18, 2026, the European Commission presented the proposal for EU Inc., a new harmonized corporate framework conceived as part of the European Union’s so-called “28th regime”.high end replica uhren

Editorial contribution by attorney Daniele Pellegrini

The initiative lies at the crossroads of corporate law, industrial policy, digitalization, and single market integration. Its objective is ambitious: to allow entrepreneurs to incorporate a company in any Member State within 48 hours, entirely online, at minimal cost, under a uniform set of European rules. The Commission clarified that the new regime is designed primarily for startups and innovative businesses, although it may be used by any entrepreneur who considers it appropriate, operating alongside — rather than replacing — national corporate forms.

1. From a “Formal” Single Market to a “Substantive” Single Market

The proposal stems from an increasingly evident reality: although the European single market is formally integrated, it remains operationally fragmented. Businesses seeking to grow beyond national borders must navigate 27 corporate law systems and more than 60 national legal forms, resulting in additional costs, delays, and uncertainty. EU Inc. seeks to overcome this fragmentation by offering a standardized European corporate form that can be used as an alternative to national models. The aim is not to abolish domestic companies, but to provide a common instrument for businesses operating — or intending to operate — on a continental scale. From this perspective, EU Inc. represents an evolution of the Societas Europaea, which pursued similar objectives but achieved limited success due to procedural complexity and high implementation costs.

2. A Digitally Native Company

The most visible innovation is the digital incorporation process. The Commission envisions a fully online registration procedure completed within 48 hours, with limited costs and simplified procedures throughout the company’s entire lifecycle. The proposal also includes digital share transfers, simplified capital operations, and automatic transmission of corporate data to competent authorities under the “once-only” principle, thereby avoiding duplicate filings. Digitalization therefore extends far beyond the company’s formation stage. It becomes the structural foundation of the entire model: incorporation, governance, amendments to corporate documents, share transfers, interactions with authorities, and insolvency procedures would all take place through harmonized digital tools. This marks a significant shift: a commercial company is no longer merely an entity registered in a national registry, but rather a digital legal platform recognizable and operational throughout the European economic area.

3. Reduced Costs, No Minimum Capital Requirement, and Simplified Banking Procedures

Among the proposal’s most significant features are the maximum incorporation cost of €100 and the absence of any mandatory minimum share capital. According to the available information, the proposal also eliminates the requirement to open a bank account prior to incorporation, removing one of the most common practical obstacles faced by foreign founders or teams distributed across multiple countries. The message is clear: the European Union intends to make business creation faster, less costly, and less dependent on the administrative peculiarities of individual Member States.

4. A Response to Global Competition fake Hublot

EU Inc. must also be viewed in light of the broader European debate on competitiveness. As early as 2024, Mario Draghi highlighted regulatory fragmentation, bureaucracy, and limited access to capital as structural obstacles preventing European businesses from competing effectively with the United States and China. The new regime aims to retain and attract innovative companies, preventing startups and scale-ups from choosing simpler or more favorable non-European jurisdictions. The implicit reference is the U.S. model, where a uniform and widely recognized corporate framework facilitates fundraising and large-scale expansion. EU Inc. attempts to replicate this operational efficiency within a European context while preserving the safeguards embedded in the EU legal order.

5. Access to Capital, Governance, and Stock Options

Another important aspect concerns corporate governance and business financing. The Commission identifies among the proposal’s objectives the simplification of digital share transfers, support for modern financial instruments, and the possibility — left to Member States — of allowing access to public equity markets. Particularly significant is the proposed framework for employee stock options, which would introduce an optional common regime with deferred taxation. This is a crucial issue for startups and scale-ups, as equity-based compensation enables companies to attract talent even when they lack the liquidity needed to compete with large international players. Harmonizing this area could reduce one of the main asymmetries currently existing among European national systems.

6. An Optional, Not Substitutive, Regime

EU Inc. is not intended to replace national corporate forms. It would operate as a voluntary regime available alongside domestic legal systems. Founders would therefore be free to choose whether to incorporate under national law or adopt the new European corporate form. This aspect is essential to understanding the nature of the project: the European Union is not imposing a single mandatory model, but rather offering an alternative framework for businesses seeking to operate across multiple markets under uniform rules.

7. Safeguards: Labor Protection, Abuse Prevention, and National Standards

Simplification does not eliminate the need for safeguards. The proposal must ensure that EU Inc. does not become a vehicle for regulatory dumping or circumvention of stricter national protections. For this reason, the project includes mechanisms aimed at preventing fraud and abuse, while also fitting within a broader framework involving labor law, insolvency law, and taxation. The Commission itself presents EU Inc. as part of a wider strategy to create a harmonized regime encompassing corporate, fiscal, labor, and insolvency matters. Balancing simplification and protection will likely become one of the most delicate aspects of the legislative negotiations.

Taxation and Open Questions

Taxation remains the most complex area. The political objective is to allow businesses to operate and raise capital across Europe within a more uniform framework; however, tax harmonization requires particularly sensitive coordination among Member States. Several issues therefore remain unresolved: What relationship will exist between the EU Inc. regime and national tax systems? How will forum shopping be prevented? Which authorities will supervise compliance? And to what extent will judicial application remain uniform? The proposal clearly sets out a direction, but its effectiveness will depend on the ability of Member States to translate political ambition into a genuinely functional system.

9. Timeline: First Applications Expected from 2027

According to current reports and available information, the political objective is to reach an agreement by the end of 2026, with the first EU Inc. companies becoming operational in 2027. The process, however, remains legislative in nature: the European Parliament and the Council must review, amend, and approve the proposal. Only after this process concludes will the true scope of the instrument become clear.

10. A Cultural Revolution Before a Legal One

Beyond its technical aspects, EU Inc. introduces a cultural transformation. For the first time, European corporate law is not merely coordinating or harmonizing national systems, but presenting itself as the preferred legal framework for businesses. A company is no longer necessarily rooted in a single national legal order. Instead, it may choose a common European framework designed to foster growth, investment, and cross-border operations.

EU Inc. is one of the most ambitious proposals in recent years in the field of European corporate law. Its purpose is to bridge the gap between formally proclaimed economic freedoms and actual operational conditions by offering businesses a simple, digital, and recognizable instrument throughout the single market. The success of the project will depend on three factors: the genuine simplicity of procedures, the balance between flexibility and safeguards, and the ability of Member States to apply the new regime consistently. If these objectives are achieved, EU Inc. could strengthen the competitiveness of the European ecosystem, making the Union a more attractive environment for founders, investors, and talent. Otherwise, the risk will be to replicate past experiences: formally innovative legal instruments that ultimately remain underused in practice.

 

Daniele Pellegrini, Attorney-at-Law, Ph.D.

The information contained in this article is provided for general informational purposes only and does not constitute, and is not intended to constitute, legal advice or any other form of professional advice. The content does not take into account the specific circumstances of any individual case and should not be relied upon as a basis for making decisions without obtaining appropriate professional advice.