On 18 March 2026, the European Commission tabled COM(2026) 321 — a regulation that would create “EU Inc.”, an optional corporate form sitting alongside the twenty-seven national company laws of the member states rather than replacing them. The initiative reflects a broader view in Brussels that legal fragmentation within the single market continues to impose significant costs on companies seeking to scale across borders. The European Council’s conclusion elevated the proposal to a high political priority and called on the co-legislators to adopt it by the end of 2026. Parliament and Council are now developing their respective positions before entering negotiations on a final text, with a trilogue targeted before the end of 2026.
Since then, the legislative picture has sharpened considerably: the Parliament’s rapporteur published a draft report on 30 June, and a dispute over the text’s legal form has opened what may prove the most significant structural challenge the project has yet faced.
What the Draft Regulation Envisages
The Commission proposes that an EU Inc. entity could be formed entirely online, through a single EU-wide registration interface, within forty-eight hours and for a fee capped at €100, with no minimum capital requirement. The draft is designed to be broadly accessible, including to founders from outside the EU, while existing companies could also convert into the new form under the procedures set out in the regulation. Among its more specific innovations are EU-wide templates for share classes, non-par-value shares, and a harmonised employee stock-option scheme. That last element addresses a well-documented problem: in several member states, employees may be taxed on equity before they can realise its value. Jurisdictions such as Estonia are often cited as offering more favourable treatment of stock options, making them comparatively attractive to startups and talent. The underlying objective is straightforward: rather than navigating a new company-law system each time they expand into another member state, founders would have the option of relying on a single legal framework across the EU. The extent to which non-EU founders could make practical use of the regime will ultimately depend on how questions such as registered-office and establishment requirements are resolved.
The Negotiations Take Shape
On 30 June 2026, René Repasi (S&D), the European Parliament’s rapporteur, published a draft report that would modify the Commission’s text in three significant directions. On worker protections, the report demands that employee board-level participation and applicable labour law follow the place where employees actually work, not the country of registration — a direct response to concerns that EU Inc. could be used to circumvent stronger national labour regimes. It also proposes permitting steward-ownership structures and calls for specialised judicial chambers to improve consistency in cross-border disputes.
A separate dispute with potentially greater long-term consequences has emerged on the Council side. The Council’s legal service has advised that the initiative may need to be reclassified from a regulation to a directive. The distinction matters considerably: a regulation applies uniformly across all member states; a directive permits each to transpose it through national legislation, reintroducing precisely the variations the framework is designed to eliminate. Supporters of the original approach argue that doing so would substantially weaken the initiative’s economic rationale — effectively converting a single European company form back into twenty-seven national interpretations of it. Their argument is that the regime must remain a regulation: optional for entrepreneurs, but mandatory for member states to recognise without modification.
Beyond the institutional negotiations, several important issues in the Commission’s text remain unresolved. One major outstanding issue is tax: the draft creates no EU corporate-tax regime, and member states would continue to apply their own rates and rules to EU Inc. entities operating on their territory. The template content itself is not defined in the regulation but delegated to future implementing acts, leaving the most consequential details of permissible share structures and governance documents still to be determined.
The Delaware Framing and Its Limits
EU Inc. is often presented in Brussels as Europe’s response to the “Delaware flip” — the pattern of high-growth European companies reincorporating in the United States to attract venture capital. That framing captures a real dynamic, but Delaware’s appeal rests not only on legal uniformity but on decades of specialised corporate jurisprudence and investor familiarity that a registration reform cannot replicate quickly. Many observers also argue that Europe’s competitiveness challenges stem as much from fragmented capital markets and limited growth financing as from company-law complexity — a structural problem EU Inc. does not directly address.
What to Watch
Opposition has sharpened since March. Trade unions, including industriAll Europe, now explicitly characterise EU Inc. as a deregulation instrument rather than a market-integration tool, warning that fully digital registration with minimal substance requirements invites regime shopping by large multinationals seeking the weakest available labour protections and, at the extreme, creates conditions for letterbox-company abuse and social fraud. The Repasi report’s worker-protection provisions represent Parliament’s attempt to preempt those concerns; how much of that language survives trilogue will be a significant indicator of the final regime’s ambitions.
The regulation-versus-directive dispute, the labour-participation fault line, and the trade-union mobilisation all suggest that whatever architecture ultimately emerges will reflect what twenty-seven governments could agree on — which may be considerably more constrained than what the Commission tabled in March.
Bibliography:
The 28th Regime. (n.d.). The 28th Regime. https://the28thregime.eu/
European Commission. (n.d.). EU Inc.: New harmonised corporate legal regime. European Commission. https://commission.europa.eu/topics/business-and-industry/doing-business-eu/company-law-and-corporate-governance/eu-inc-new-harmonised-corporate-legal-regime_en
European Parliamentary Research Service. (2026). EU Inc. and the 28th regime [Briefing]. European Parliament. https://www.europarl.europa.eu/RegData/etudes/BRIE/2026/785710/EPRS_BRI(2026)785710_EN.pdf
European Parliament, Committee on Legal Affairs. (2026). Draft report [JURI-PR-790143]. European Parliament. https://www.europarl.europa.eu/doceo/document/JURI-PR-790143_EN.pdf
European Commission. (2026). Impact assessment report for EU Inc. Part 1 [PDF]. https://commission.europa.eu/document/download/38805451-8ffd-4512-8c46-fd76de0e9c9c_en?filename=Impact%20assessment%20report%20for%20EU%20Inc%20part%201.pdf
The opinions and conclusions expressed are those of the author and do not necessarily reflect the views of the EU Awareness Centre.
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