Summary (3 key takeaways)
- The European Commission has proposed EU Inc., a new optional, EU‑wide corporate legal framework, often referred to as the “28th regime”, aimed at enabling companies to operate across the Single Market under a single rulebook. [commission.europa.eu], [ec.europa.eu]
- EU Inc. would allow fully digital incorporation within 48 hours, at a cost of less than EUR 100, with no minimum share capital requirement, and simplified corporate governance and insolvency rules. [ec.europa.eu], [france24.com]
- While EU Inc. is primarily a company law initiative, the proposal contains tax‑relevant elements, notably data sharing under the “once‑only” principle and a harmonised approach to employee stock option taxation, but it does not introduce an EU‑wide corporate tax regime. [pwc.com], [taxnews.ey.com]
Background: Why “EU Inc.”?
On 18 March 2026, the European Commission formally presented its proposal for EU Inc., a new harmonised corporate legal form designed to reduce fragmentation in EU company law and strengthen the competitiveness of the Single Market. [ec.europa.eu], [commission.europa.eu]
According to the Commission, companies seeking to scale across borders currently face 27 national legal systems and more than 60 different company forms, resulting in delays, legal uncertainty and higher compliance costs. This fragmentation has been identified in both the Letta Report and the Draghi Report as a major structural barrier to EU competitiveness and innovation. [commission.europa.eu], [euobserver.com]
EU Inc. is positioned as the cornerstone of the long‑discussed “28th regime”, sitting alongside – not replacing – national company law systems, and offering companies a voluntary EU‑level alternative. [commission.europa.eu], [techuk.org]
Key Features of the EU Inc. Proposal
1. Optional, Digital‑by‑Default Company Form
EU Inc. would be established by Regulation, ensuring direct applicability across all Member States. Companies opting into the regime would follow a single harmonised EU framework throughout their lifecycle, from incorporation to liquidation. [commission.europa.eu], [pwc.com]
Key features include:
- Incorporation within 48 hours, fully online
- Maximum incorporation cost of EUR 100
- No minimum share capital requirement
- Standardised articles of association and governance rules [ec.europa.eu], [tech.eu]
2. Governance, Capital and Financing Flexibility
The proposal introduces modernised corporate rules tailored to startups and scale‑ups but open to all companies, regardless of size or sector. These include:
- Flexible governance structures
- Multiple share classes and modern financing instruments (e.g. warrants, convertible instruments)
- Digital shareholder meetings and resolutions
- Simplified capital maintenance rules based on solvency tests rather than fixed concepts of legal capital [cliffordchance.com], [pwc.com]
3. Simplified Insolvency and Second‑Chance Mechanisms
For qualifying companies, EU Inc. introduces fast‑track and simplified insolvency procedures, enabling founders to wind down failed businesses more quickly and at lower cost. In certain cases, insolvency proceedings could be completed within months, with reduced formal involvement of courts or practitioners. [rte.ie], [france24.com]
Tax‑Relevant Elements: What EU Inc. Does (and Does Not) Do
Although EU Inc. is not a harmonised corporate income tax regime, the proposal contains several elements of interest for tax and compliance professionals.
No EU‑wide Corporate Tax Base
The Commission initially explored the idea of a 28th corporate tax regime but explicitly excluded it from the EU Inc. proposal. Corporate income tax, VAT, and most substantive tax rules remain governed by national law. [taxnews.ey.com], [pwc.com]
“Once‑Only” Principle and Data Sharing
Under the proposal, EU Inc. companies would benefit from a “once‑only” registration principle, whereby company data submitted at incorporation would be automatically transmitted to relevant authorities, including tax administrations and VAT registers, reducing duplicative filings. [pwc.com], [techuk.org]
Employee Stock Options
A notable tax‑related innovation is the introduction of a harmonised EU employee stock option (EU‑ESO) scheme.
For EU Inc. companies opting in:
- Taxation of income from stock options would be deferred until the disposal of shares, rather than at grant or exercise
- The aim is to mitigate “dry tax” issues and improve talent retention in the EU startup ecosystem [commission.europa.eu], [taxnews.ey.com]
Legislative Process and Outlook
The EU Inc. proposal will now follow the ordinary legislative procedure, requiring approval by both the European Parliament and the Council. The Commission has called on co‑legislators to reach agreement by the end of 2026, with potential application from 2027 or 2028. [eureporter.co], [the28thregime.eu]
While broadly welcomed by the startup and investment community, the proposal has already triggered debate around:
- Reliance on national courts for interpretation, potentially leading to divergent outcomes
- The interaction with labour law and employee participation rules
- The limits of simplification given that taxation and social security remain national competences [tech.eu], [euobserver.com]
Sources
- European Commission – EU Inc.: A new harmonised corporate legal regime [commission.europa.eu]
- European Commission Press Release, 18 March 2026 [ec.europa.eu]
- PwC – European Commission proposes ‘EU Inc.’ corporate form [pwc.com]
- EY Tax News – European Commission publishes proposal on the 28th Regime (EU Inc.) [taxnews.ey.com]
- France 24 / AFP – Brussels touts ‘EU Inc.’ company status [france24.com]
