A new European corporate form
On 18 March 2026, the European Commission launched a remarkable proposal: the introduction of a new European corporate form under the name "EU Inc.". As a so-called "28th regime", this new form would sit alongside the existing corporate forms of the 27 Member States. The ambition is clear: to make the incorporation, (cross-border) operation and dissolution of a company within the European internal market (and beyond) considerably simpler and faster, notably through digitised procedures.
The broader context: the competitiveness of European businesses
This proposal forms part of a wider concern regarding the declining competitiveness of the European Union and its businesses. Two influential reports put their finger on the problem. The Draghi report on European competitiveness finds that the EU is grappling with a growing innovation gap relative to its principal competitors and is in urgent need of strengthening its economic capacity. The Letta report on the future of the internal market echoes this assessment and calls for a thorough reorientation of the internal market, removing structural barriers to cross-border activities. Both reports point in the same direction: Europe must urgently set about creating an environment in which businesses, and in particular innovative start-ups and scale-ups, can more readily be established, grow and scale up, and, where appropriate, be wound up and liquidated across borders. The fragmentation of company law across 27 national legal systems acts as a particular brake on progress: businesses seeking to expand cross-border are confronted with a patchwork of divergent incorporation requirements, administrative procedures and compliance obligations, which hinder their expansion and render it costly.
The European Commission identifies the strengthening of European competitiveness as a central priority of its second term of office. The economic and geopolitical reality facing Europe has, after all, changed profoundly since the establishment of the internal market in 1985, and the Commission seeks to respond to this through a renewed policy framework. In that context, it has launched its "Competitiveness Compass", a strategic framework bringing together a series of concrete measures to make the European economy more resilient and innovative. The announcement of a "28th regime" forms an explicit part of that framework.
The European Commission's proposal: key features
On 18 March 2026, the European Commission tabled a proposal for a Regulation "on the 28th regime Corporate Legal Framework". Its key features may be summarised as follows:
A "European" corporate form governed, in the first instance, by the Regulation and its articles of association
An EU Inc. is incorporated (ex nihilo or in the context of a restructuring) in a Member State and is governed by the Regulation and its articles of association, and, for the rest by the national company law applicable to the corporate form designated in the Member State of incorporation as the "relevant national legal form". The Regulation is not exhaustive, with the result that the law of the Member State of incorporation applies on a supplementary basis. In practice, this means that an EU Inc. always has to be aligned with a national corporate form in the Member State in which it is incorporated. In Belgium, this would logically be the private limited liability company, besloten vennootschap/société à responsabilité limitée, although that form has no share capital requirement, unlike the EU Inc.
Limited liability
The EU Inc. offers its shareholders the benefit of limited liability. It requires capital, but no minimum capital.
Broad scope of application
Whereas the focus of the Letta and Draghi reports, as well as the Competitiveness Compass, lay primarily in innovative start-ups and scale-ups, the current proposal is expressly not limited to such entities: an EU Inc. may be adopted as a corporate form by any business. That said, special rules are provided for the dissolution of insolvent EU Inc. companies that qualify "innovative startups”, a definition of which awaits a recommendation from the European Commission.
Rapid, cost-effective, yet controlled incorporation
A standard EU Inc. can be incorporated within 48 hours at a cost of EUR 100. Incorporation is done by means of a harmonised application form, supplemented by European model articles of association. The Regulation does, however, require a preventive legality check at the time of incorporation, whilst leaving it to the Member State of incorporation to determine whether this takes an administrative, judicial or notarial form, or a combination thereof. It remains to be seen whether the EU Inc. in Belgium will fall within the notarial monopoly.
Flexible governance arrangements
The EU Inc. is managed by one or more directors, who must be natural persons, at least one of whom must be a resident of the European Union. The board has full powers of management and is appointed and removed by the shareholders in general meeting, which may issue the board with binding instructions.
Simplified administrative procedures (the once-only principle)
The European Commission will establish a central European interface as part of the BRIS (Business Registers Interconnection System). Through this electronic access point, businesses only need to provide their information once – what is called the “once-only” principle. This interface connects the national business registers to one another, so that they have automatic access to all requisite information, which they may in turn transmit to the relevant institutions.
A fully digitised corporate form (the digital-only principle)
The Regulation introduces the "digital-only" principle, embracing a fully digital approach. The EU Inc. is not only incorporated entirely digitally; all procedures through which it must pass during its lifecycle also need to be capable of being conducted digitally, save in exceptional circumstances. The proposal removes mandatory physical formalities and replaces them with fully digital procedures for financing transactions and share transfers. The mandatory involvement of intermediaries in share transfers, which is required in certain Member States, does not apply to the EU Inc. In addition, EU Inc. companies will have access to simplified, fully digital liquidation and insolvency procedures, with a specific focus on insolvent innovative start-ups whose founders can make a fresh start more quickly and at lower cost when a business fails.
Safeguards for the protection of third parties
The Regulation provides for a number of mechanisms to protect minority shareholders, creditors, employees and other third parties. On the one hand, the Regulation contains specific company law safeguards, such as a dual distribution test, a directors' liability regime and a dispute resolution mechanism. On the other hand, the proposal expressly preserves national employment and social security law. Those rules apply in full to the EU Inc., just as they do to any other company governed by national law.
Trilogue
The Commission's proposal marks the beginning of a legislative process. The text is now being submitted to the European Parliament and the Council, each of which will state its position on the matter. The Commission's objective is to reach agreement through a trilogue by the end of 2026. Only after that will the EU Inc. be enshrined in a binding European Regulation of direct effect in all Member States.
In parallel, the Commission is working on a series of supplementary measures to complete the "28th regime". An accompanying communication puts forward maximum digitisation of the interaction between businesses and public authorities, notably through the so-called "European Business Wallet", and calls upon Member States to establish specialist courts or divisions for disputes concerning EU Inc. company law, with a view to ensuring effective, uniform application of the new rules.
This proposal represents a first step, which has already drawn critical voices, not least from the business community itself. It may therefore reasonably be assumed that the anticipated Regulation will, in its final form, differ from the foregoing in a number of respects. To be continued!
