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On the 18 March 2026, the European Commission (‘the Commission’) announced a new and harmonised corporate legal regime, ‘EU Inc.’ touted as the ‘28th regime’. It is the European Union’s (‘EU’) response to fragmentation faced by companies registered in EU countries, caused by divergent national corporate regulations and the absence of sufficiently harmonised EU-level rules. It is intended to reinforce the EU single market by removing residual internal barriers.
This initiative targets stakeholder concerns raised during consultation activities. Since persistent barriers lead to problematic issues and cause companies, especially smaller businesses, to incur additional costs, the Commission hopes the proposal will help create a simpler single market and therefore also support innovation and improve the investment environment.
This new framework aims to simplify registration processes, share transfers and capital operations. It also intends to operate largely on a digital framework and to provide a more efficient process for those who choose to incorporate under this regime. As a result, companies and prospective investors may face a significantly reduced administrative burden compared with incorporation under a specific national regime.
Most companies expected to register under the 28th regime will be those set up by natural persons and small and medium-sized enterprises (‘SMEs’) which are the regime’s intended main beneficiaries. However, it will also cater to start-ups and other scaling businesses. Existing SMEs registered under one of the 27 EU-national regimes would also be able to transfer to the 28th regime. There will be limited one-off adjustment costs for existing companies that choose to become an ‘EU Inc.’ company through either cross-border mergers, divisions or conversions.
Thus, this new legal framework seeks to establish a truly unified EU-wide platform through which business promoters can create a single standardised corporate structure capable of operating across all 27 EU Member States. In practical terms, this would represent a significant departure from the current position, under which companies desirous of expanding across borders are often required to navigate a patchwork of differing national corporate laws, administrative processes and compliance requirements.
By contrast, the proposed ‘EU Inc.’s model is intended to provide a more seamless foundation for doing business domestically and across EU borders, without the need to establish multiple branches or subsidiaries in different jurisdictions. In this respect, the initiative could make cross-border entrepreneurship more accessible, more efficient and considerably less burdensome from both a legal and operational standpoint. The proposed ‘EU Inc.’ would also be distinguished by several notable features, chief among them being:
- a single digital registration process via an EU-based platform;
- a standardised set of articles of association;
- a separate legal personality; and
- a relatively low minimum share capital requirement.
Taken together, these characteristics are designed to make company incorporations quicker, simpler and more cost-effective, while also enhancing legal certainty and improving the attractiveness of the EU as a place in which to establish and grow a business.
From a practical perspective, the Commission is also encouraging EU Member States to establish specialised judicial chambers or courts, which would have the authority to handle any disputes arising from this new regime.
How this regime will operate alongside existing national company law frameworks, and the extent to which its implementation may reshape them, remains to be seen. Much will depend on the final design of the regime, the effectiveness of its implementation, and the safeguards introduced to prevent misuse. Nevertheless, the initiative is a promising one. If implemented well, it could deliver meaningful and practical benefits for individuals, start-ups and SMEs by easing financial and regulatory pressures, simplifying cross-border expansion and strengthening competitiveness across the EU.
It is also important to bear in mind wider considerations that may affect the practical impact of the ‘EU Inc’. In particular, the proposal introduces a new corporate structure but does not seek to harmonise tax rules across the EU. Tax planning will therefore remain jurisdiction-specific, and local legal and tax advice will continue to be essential.
The legislative timeline remains uncertain. The final text is expected to be available by the end of 2026, with transposition by EU Member States anticipated in 2027 to 2028.
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