The European Commission has proposed on 18 March 2026 the creation of a new European legal framework, referred to as the “28th regime”, intended to establish a single corporate framework across the European Union. The initiative seeks to enable companies, especially start-ups and scale-ups, to operate across the EU under a harmonised set of rules, independently from national legal regimes.
The initiative promoted by the European Commission1 seeks to address the legal fragmentation of the EU internal market by enabling companies to operate seamlessly across the European Union and improving access to financing within the region.
In this context, the future unified European company — referred to as the “EU Inc.” — would constitute a standalone corporate form coexisting alongside national legal systems. The regime would be characterised by a high degree of harmonisation of its operating rules, covering the company’s entire lifecycle.
From its incorporation, the EU Inc. would display several distinctive features:
Any natural or legal person could establish such a company, either by way of incorporation or through the conversion of an existing entity. The company could be incorporated without any minimum share capital requirement, as is already the case in certain common law jurisdictions—and in France with the simplified joint-stock company, which may be incorporated with a share capital of one euro.
The operation of the EU Inc. would be based on a hierarchical set of rules, with the EU regulation at the top, followed by the company’s articles of association, and, on a subsidiary basis, national laws where both the regulation and the articles are silent.
In light of the above, one may identify certain similarities with the European Company (Societas Europaea or “SE”) – a supranational corporate form governed by both EU law and the national laws of Member States – and anticipate similar practical limitations.
However, the European Company regime was originally designed for large companies operating across several Member States, particularly those formed in the context of cross-border mergers or reorganisations. By contrast, the new framework is primarily intended for innovative start-ups and scale-ups, while also potentially being attractive to small and mid-size companies.
Accordingly, whereas the incorporation of European Companies is subject to a rigid framework, including significant share capital and governance requirements, the EU Inc regime is designed to offer a more flexible and accessible structure for high-growth businesses.
The EU Inc. is characterized by a clear intention to provide flexibility, both in terms of governance and financing — similar to some extent to what we already know under French law with its simplified joint-stock company.
Accordingly, its governance would rely on a simplified structure comprising a board of directors and a general meeting of shareholders, with meetings that could be held entirely remotely. Corporate decisions could be adopted in writing, and share registers could be fully digitalized.
The bylaws would offer significant contractual freedom, notably allowing:
With regard to financing, the proposal provides for broader access to capital, including hybrid instruments and harmonized employee share ownership schemes, although the tax treatment of such instruments remains to be clarified.
In exchange for this flexibility, several safeguards are introduced to prevent abuse, including:
The proposal also provides for specific dispute resolution procedures, as well as simplified winding-up mechanisms, particularly for start-ups facing financial difficulties, with the aim of facilitating entrepreneurs’ rapid recovery..
Finally, the possibility of listing on a regulated market would depend on each Member State and the compatibility of applicable national requirements.
Upon reviewing the European Commission’s proposal, the most notable advantages of this new corporate form lie in a genuine harmonisation of certain rules across Member States:
Moreover, the EU Inc. could be more easily understood by investors from outside the Member State of incorporation, thereby enhancing their confidence and facilitating the financing of innovative projects.
Nevertheless, one question remains: is it truly necessary to create yet another corporate structure to achieve these objectives?
Company laws in Europe have already undergone extensive harmonisation through a series of directives and regulations. Initiated in the 1970s,2 this process continued with the creation of the European Company regime in the 2000s3 and is now gradually reaching maturity with recent directives on cross-border reorganisations,4 which have been transposed into most Member States.
This legislative effort has resulted in a convergence of corporate regimes across Member States (for example, the French société anonyme, the German AG or the Italian S.p.A.), to the extent that cross-border mergers, demergers and transfers can now be carried out within a largely harmonised legal framework. In light of these developments, should efforts not be focused on bringing this harmonisation process to completion, as well as for other challenges faced by cross-border businesses (including accounting, taxation and labour law)?
The creation of a new corporate form will inevitably raise practical issues in each Member State, which will in turn generate legal uncertainty — and additional costs. This was already the main weakness of the European Company regime, which has, in practice, achieved only limited success.
A closer reading of the proposal already reveals a number of seemingly minor variations which, while appearing marginal on paper, complicate deal structuring and give rise to legal uncertainty in practice. This is particularly the case with the control of incorporations, which would be entrusted to different types of authorities depending on the jurisdiction (administrative authorities, courts or notaries), each applying its own practices and professional standards. In respect of employment matters, employee participation in governance bodies would continue to fall under national law, while existing EU safeguards would remain applicable in the context of cross-border reorganisations.
As a result, a transfer of registered office from France to Germany, or the merger of an Italian EU Inc. into a French EU Inc., would still raise broadly the same issues as if national corporate forms were involved.
While the proposal is interesting in its ambition to harmonise rules across the EU, it ultimately appears to offer only a partial response to the challenges at stake.
