A founder who wants to build across Europe files paperwork in 27 legal systems, each with its own registration procedure, governance rules, insolvency framework, and tax treatment of equity compensation. Incorporate, raise a round, issue employee options, restructure or wind down, and the friction compounds at every step. EU Inc. is the Commission’s attempt to collapse all of that into a single harmonized corporate form that works identically in every Member State.
The idea has a paper trail. It comes out of the Competitiveness Compass, published in January 2025, which called explicitly for a “28th regime” as part of a broader push to make the EU economically competitive again. That number is the whole framing: 27 Member States, 27 national corporate law regimes, plus one optional EU-wide form layered on top. The mandate traces back to the Political Guidelines 2024–2029 and the mission letter of the Commissioner for Democracy, Justice and the Rule of Law, who was handed the job of building it.
The legislative package landed on 18 March 2026: a Communication titled Towards a 28th regime for EU companies, the full legislative proposal, an annex, a factsheet, and a three-part impact assessment with executive summary. It is still just a proposal. It has to clear the European Parliament and the Council before it means anything, and no application date has been confirmed.
The word “optional” is doing most of the political work. EU Inc. is a supranational corporate form open to any founder across the 27 Member States, and it replaces nothing. A German GmbH, a French SAS, an Irish limited company all stay exactly as they are. A founder picks EU Inc. because it fits, not because Brussels forced it on anyone, and that is what makes “28th regime” an honest label rather than spin: the EU form sits beside the national ones instead of shoving them aside. Startups are the target audience, though eligibility isn’t restricted to them. Anyone who finds the form useful can use it.
The operational numbers are aggressive by European standards. Registration within 48 hours, capped at €100, fully digital, with simplified digital share transfers, fully digital insolvency, and automatic once-only data transmission to authorities. That is a straight shot at the Delaware LLC, which European founders raising from US investors have defaulted to for years because it is predictable and its governance defaults favor the people building the company.
For pure reference, the headline specs:
| Feature | Specification |
|---|---|
| Registration time | Within 48 hours |
| Registration cost | Maximum €100 |
| Registration process | Fully digital |
| Share transfers | Digital, simplified |
| Insolvency procedures | Fully digital |
| Data transmission to authorities | Automatic, once-only principle |
| ESOP scheme | Common optional scheme with harmonised deferred taxation |
| Public equity market access | Optional, at Member State discretion |
What makes the proposal ambitious, and fraught, is that it tries to harmonise four separate bodies of law at once. Corporate law is the core: registration, governance, share capital operations, the whole life cycle from formation to dissolution. The proposal simplifies the mechanics throughout and makes digital share transfers and capital operations easier, which matters directly to fundraising rounds where managing a cap table across several jurisdictions is a recurring headache.
Insolvency runs fully digital too, and the payoff is real. Cross-border insolvency for EU companies today means threading the EU Insolvency Regulation together with national implementing rules, and the uncertainty over which country’s courts take primacy, and when, can be paralyzing. A harmonized framework for EU Inc. companies would in principle make that question disappear.
Labor law is where things get politically dangerous. The public summary says almost nothing about specific provisions beyond the ESOP scheme, which tells you how carefully the Commission is stepping, because labor law sits inside Member State competences that the Council guards more jealously than almost anything else. The real fault line in the negotiation will be whether EU Inc. writes EU-level labor standards into the regime or merely defers to national rules. If it’s the former, Member States with distinctive industrial relations systems will fight it hard. Tax law shows up mainly through the ESOP provision, harmonized deferred taxation on employee stock options, with the broader tax detail buried in the full proposal.
That ESOP clause may be the most practically consequential thing in the entire package. Across Member States, the tax treatment of equity compensation varies wildly in timing (grant, vesting, exercise, or sale) and in rate (income tax versus capital gains), on top of the administrative mess. In several countries, an employee gets taxed at vesting while holding illiquid shares in a private company, having received no cash to pay the bill. Accepting equity in a startup can hand you an immediate cash tax burden for the privilege. So European startups keep losing senior technical and commercial hires to US companies, where Incentive Stock Options under IRC Section 422 give everyone a deferred treatment they already understand.
EU Inc.’s common optional ESOP scheme goes straight at this. “Deferred” means the tax event moves to a later trigger, most likely a liquidity event such as a sale or IPO, instead of firing at grant or vesting. That lines up the tax bill with the moment the employee actually sees cash, which is both economically sane and something a person can plan for. Companies elect into the scheme rather than being forced. The Commission’s own materials are blunt about the goal: it’s a tool to help European companies “attract the best talents,” an open admission that the current patchwork is a competitive drag.
The proposal also backs “modern financing instruments,” though the specifics live in the full text rather than the summary. Read that as convertible notes, SAFEs, and the other structures that are standard in venture practice but fit badly under national corporate law written for plain equity and debt.
Public equity markets get a curious treatment. Member States may optionally allow EU Inc. companies onto their public markets, so this isn’t a default right; it’s a discretionary permission granted country by country. Whether an EU Inc. company can IPO on a national exchange depends on whether that Member State opted in. You end up with a potential patchwork, which cuts against the whole harmonization pitch, but it’s the price of getting anything through the Council.
The additive design is a deliberate move to dodge a fight the Commission cannot win. No existing company is touched, no national legislature has to amend its corporate law, and Member States that dislike the regime can just watch their founders ignore it.
Which raises the question that decides everything: does EU Inc. reach critical mass and become a real European standard, or does it stay a niche instrument for a handful of internationally-minded startups? The governance rules in the full proposal are the first test, because fast registration means nothing if EU regulatory culture has stuffed the form with mandatory provisions that sophisticated founders find suffocating. Then there are the venture funds, above all US funds writing cheques into European companies, and whether they treat EU Inc. as familiar and bankable or keep insisting on Delaware or the UK. Last is whether the ESOP harmonization is substantive enough to actually move where talent goes.
The Delaware comparison cuts deeper than the registration fee suggests. Delaware doesn’t dominate US corporate law because it’s cheap or fast. It dominates because of a century of accumulated case law, a specialist Court of Chancery that knows corporate disputes cold, and outcomes investors and founders can predict before they ever file. EU Inc. starts with none of that. Building it will take years and hinge on how the European Court of Justice and national courts handle disputes involving the new form.
To become law the proposal runs the ordinary legislative procedure, with Parliament and the Council both needing to adopt it, amendments and all. The Council stage is where the blood gets spilled, because of the labor dimension. Germany’s co-determination system and the Nordic collective bargaining frameworks mean any EU-level labor provision will get read line by line by countries that will not quietly surrender their industrial relations traditions.
The three-part impact assessment is the document that will actually shape the debate. Assessments at this scale model the economic effects across Member States, cost out compliance, and weigh alternative policy options. Publishing three parts is the Commission telling you it expects a fight and is trying to pre-load the answers with evidence.
Immigration is the conspicuous gap, given how loudly the proposal talks about attracting talent. The Commission materials simply don’t address it. Related efforts like an EU Startup Visa are running in parallel but are separate from this corporate law proposal, and a founder using EU Inc. still lives under the immigration rules of whichever Member State they physically operate from.
None of this is vaporware. The 48-hour, €100 digital registration is a real operational upgrade over what founders face in most Member States today. The ESOP harmonization, if it ships as described, would meaningfully change European startup hiring, and the four-law scope goes further than any previous EU corporate law harmonization attempt. The risks are just as concrete. Optionality means adoption rides on network effects that build slowly if at all. The labor inclusion is a legislative minefield. The missing case law leaves early adopters exposed. And the Member State discretion on public markets pokes a hole in a regime that was supposed to be unified.
The Commission has made a substantive opening move, and the numbers are better than anyone expected from Brussels. But the one thing worth doubting is whether the venture funds will care. If US investors keep routing their European portfolio companies through Delaware, EU Inc. becomes another well-intentioned instrument that founders file away and never use, no matter how elegant the 48-hour registration looks on paper. The money decides, and the money has a Delaware habit that a factsheet won’t break.
The full legislative proposal, annex, and three-part impact assessment are available via the European Commission’s official page on EU Inc. at commission.europa.eu.