On Wednesday (18 March), the European Commission presented the EU Inc. proposal, an optional new corporate form for companies across the EU. Firms can soon choose a single European legal identity rather than incorporating separately in one of the 27 member states. It is part of the long-awaited “28th regime,” intended to simplify cross-border business and strengthen Europe’s position as an important hub for innovative companies.
At its core, EU Inc. offers a fast, inexpensive, and largely digital framework. Companies could be incorporated in 48 hours for less than €100. All filings, from board decisions to insolvency notifications, would be digital and follow a “only-once” principle: information submitted once in one member state would be recognised across the Union. Employees could participate in stock option schemes, with harmonised tax treatment. The proposal also covers investment rules, aiming to make it easier for EU companies to raise capital across borders.
The Commission presented the proposal alongside guidance on defining “innovative companies” and a vision for the broader 28th regime. This wider package includes updates to the European Venture Capital Funds Regulation, a European business wallet for streamlined administrative procedures, and a fair labour mobility package. Together, these measures aim to create a coherent framework for innovation and cross-border activity.
Critics highlight several shortcomings. EU Inc. offers no central judicial remedy; the Commission only suggests that member states consider a specialised court or chamber, leaving cross‑border disputes unresolved. The term “innovative companies” is also contested. While EU Inc. is not limited to such firms, defining which qualify is difficult, and some observers worry this could weaken the proposal’s impact. On taxation, the Commission’s 2023 Head Office Tax (HOT) plan, which would allow SMEs to apply their home‑country rules across the EU, remains stalled in the Council amid national concerns. Together with the complexity of aligning 27 national company laws, these factors make rapid adoption uncertain.
The Commission remains ambitious. It hopes that co-legislators, the European Parliament and the Council of Ministers, will complete negotiations by the end of the year, under Ireland’s Council Presidency.
