On 18 March 2026, the European Commission published a proposal for a new uniform framework for companies called “EU Inc.”, which serves as the cornerstone and starting point of the so-called 28th EU regime (hereinafter the “Proposal”)[1]. The Proposal introduces a new harmonized corporate form of a limited liability company called “EU Inc.”, which is to be designed from the outset as fully digitalized, available under the legal systems of every Member State, and recognized throughout the European Union. If the Proposal is adopted as submitted, it could represent one of the most significant changes to European company law since the introduction of the European Company (Societas Europaea – SE). This article analyzes the key parameters of the proposed regulation, its institutional framework, and its anticipated impacts on the business environment within the European Union.
General overview of the Proposal for the new legal form EU Inc.
Although the European Union has been building a single internal market for decades, the area of company law remains significantly fragmented. When operating across borders, entrepreneurs face the existence of separate legal systems and dozens of national company forms. In practice, therefore, every expansion into another Member State requires navigating different corporate rules, registration procedures, and administrative requirements. It is precisely this regulatory fragmentation that is one of the reasons why European startups may be motivated to relocate their headquarters outside the European Union or choose jurisdictions that offer a simpler and more predictable legal environment.
Although EU Inc. is to be governed by a directly applicable regulation, it will not be a regime entirely separate from the legal systems of the Member States. The company will be registered in a specific Member State, and in matters not fully harmonized by the Proposal, the law of the state of its registered office will continue to apply. The EU Inc. form is intended to serve as a voluntary alternative to national legal forms of companies.
The European Commission’s ambition is to create a legal environment that better competes with the United States and other global economies while simultaneously removing regulatory barriers that currently hinder the growth of European startups and innovative enterprises. The new legal form is therefore designed primarily with startups, scaleups, and innovative enterprises in mind, though it is not intended to be limited solely to them.
Legal nature and key characteristics of EU Inc.
One of the most striking aspects of the Proposal is the thorough digitization of the entire company lifecycle. It will be possible to establish an EU Inc. company entirely online, within 48 hours, and at a cost not exceeding 100 EUR, with the Proposal not requiring any minimum share capital. The fact that the Proposal does not require a minimum share capital, however, does not mean there are no capital rules at all. It does, in fact, contain its own regime of participation rights known as shares, including rules for issuance, transfers, and digital record-keeping. Furthermore, EU Inc. companies will be able to freely choose the Member State in which they will be registered in the commercial register.
Digitalization is not intended to end with the company’s incorporation. The Proposal provides for the electronic management of corporate affairs, digital maintenance of shareholder records, online management of capital operations, and electronic communication with public authorities. Another key element is the “once only” principle (the principle of one-time data submission), under which a company will provide its data only once via a single European interface. This information will then be shared among the relevant authorities and registries without the need to resubmit documents in individual Member States. In the first phase, a central EU-level interface based on the BRIS business register interconnection system is to be used, and in the second phase, the European Commission plans to establish a central EU register. This is not an entirely new concept. The “once only” principle is based on the Single Digital Gateway Regulation (SDG Regulation[2]) from 2018, which the Proposal builds upon and further expands the application of.
More attractive environment for startups, investors, and innovative businesses
The Proposal is clearly designed with the needs of the startup and venture capital communities in mind. EU Inc. is intended to enable the creation of different classes of shares with distinct voting and economic rights, a standard tool used in venture capital investments that is not, however, available to the same extent or in a similar form in all Member States.
The Proposal also aims to simplify share transfers and limit the mandatory involvement of certain intermediaries in selected corporate actions. Capital operations and decision-making processes within corporate governance are also to be digitized. The practical result should be a reduction in transaction costs associated with investors joining a company and with subsequent investment rounds.
Unified framework for employee share schemes in the EU
Another significant part of the Proposal is the support for employee share schemes. The opportunity to participate in a company’s future growth is one of the main tools for attracting and retaining talented employees in the technology sector. However, European companies have so far encountered differing tax regimes across Member States, which have complicated the use of this tool. The Proposal, therefore, envisages a pan-European framework for employee share schemes, under which taxation would arise only upon the realization of economic gain, typically upon the sale of shares.
Termination of business activities
An interesting aspect of the Proposal is also the approach to winding up a business. The Commission openly assumes that innovation is inextricably linked to a higher degree of entrepreneurial risk and that the failure of a project should not automatically be perceived as a failure of the entrepreneur.
The Proposal introduces two distinct mechanisms for winding up a business. Solvent companies are to have access to a simplified, fast-track liquidation procedure conducted primarily digitally. Insolvent EU Inc. companies that meet the criteria for an innovative startup will have access to simplified insolvency proceedings, which will facilitate the winding up of business activities. This would make it possible to test innovative ideas and, if necessary, start over.
Preservation of national labor and social rules
The Proposal does not generally aim to harmonize labor law or social regulations. Regarding employee participation in company bodies, an EU Inc. established through a new formation or a domestic conversion shall be subject to the rules of the Member State of its registered office. In the case of cross-border conversions, mergers, and divisions, special protective rules under Directive 2017/1132 will apply.[3] This is intended to prevent the choice of the EU Inc. form from leading to the circumvention of national rules on employee participation.
It is precisely this area that may be one of the most debated topics during the legislative process. It will be necessary to strike a balance between a unified European corporate framework on the one hand and the preservation of Member States’ social autonomy on the other, with countries having developed employee participation systems likely to defend their national specificities very vigorously.
Legislative process and future developments
The legal form of EU Inc. cannot be viewed in isolation. Along with the Proposal, the European Commission also adopted a policy communication outlining the broader concept of the 28th regime, which aims to gradually establish uniform European rules in other business-related areas as well. This concept aims to further digitize relations between businesses and public administration, including the development of a European business wallet and unified digital tools for business at the EU level, support for cross-border remote work, facilitating startups’ access to venture capital, and adjustments to investment rules for institutional investors, including pension funds.
The Proposal is now entering the standard legislative process. It will be discussed by the European Parliament and the Council of the European Union, and its final form will result from political negotiations between these institutions. The European Commission has declared its ambition to reach an agreement by the end of 2026.
Conclusion
The EU Inc. Proposal represents a significant shift in European company law. It introduces a new voluntary EU regime designed to operate alongside national legal forms and offers entrepreneurs a more uniform, simpler, and more digitized corporate environment across the European Union. At the same time, however, it raises several legal and political questions, particularly regarding the balance between EU harmonization and the preservation of Member States’ legal and social autonomy. Its final form will therefore depend primarily on the outcome of the legislative process at the EU level.
We will continue to monitor the legislative developments regarding the Proposal for you.
If you have any questions on this topic, please do not hesitate to contact us.
[1] Proposal for a regulation of the European Parliament and of the Council on the 28th regime corporate legal framework – “EU Inc.”
[2] Regulation (EU) 2018/1724 of the European Parliament and of the Council of 2 October 2018 establishing a single digital gateway to provide access to information, to procedures and to assistance and problem-solving services and amending Regulation (EU) No 1024/2012.
[3] Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to certain aspects of company law.
Mgr. Martin Heinzel, partner – heinzel@plegal.cz
Tereza Hrudková, legal assistant – hrudkova@plegal.cz
18. 6. 2026