On 18 March 2026, the European Commission published a proposal for the so-called “28th Regime”. This initiative introduces a new European framework containing a uniform and simplified set of rules for businesses operating within the European Single Market. At the heart of this broader initiative is the creation of a new European limited liability company form, known as the “EU Inc.”.
The proposal, in the form of a regulation, establishes a uniform, digital and optional company law framework that can be used across all Member States alongside existing national corporate forms. The initiative addresses the fragmentation of company law within the EU. Today, businesses are confronted with 27 national legal systems and numerous legal forms, resulting in high costs, delays in incorporation and expansion, legal uncertainty, and difficulties in attracting investors and talent. For start-ups and scale-ups in particular, this hampers growth within the Single Market and undermines the EU’s competitiveness more broadly.
EU Inc. as the cornerstone of the 28th Regime
EU Inc. is the central building block of the 28th Regime. It is an optional European legal form with a harmonised regulatory framework covering the entire lifecycle of a company.
Key features and advantages include:
- Fast and cost-effective incorporation: an EU Inc. can be incorporated fully online within 48 hours, without physical presence or the involvement of a notary. No minimum capital requirement applies, lowering barriers to entry.
- Comprehensive digital operations: all corporate processes are handled digitally throughout the company’s lifecycle. This includes incorporation, board resolutions, shareholders’ meetings, capital increases and liquidation. As a result, administrative burdens and processing times are significantly reduced.
- One-time data submission: businesses provide their information only once through a European digital platform linked to national registers. The information is then automatically shared with the relevant authorities, preventing duplicate reporting and administrative inefficiencies.
- Flexible capital and share structure: EU Inc. allows different classes of shares with varying membership and economic rights. This enables companies to tailor their governance and financing structures to the needs of investors, founders and other stakeholders.
- Simplified investment processes: the proposal introduces digital and standardised procedures for capital transactions and share transfers, without mandatory third-party involvement. This reduces transaction costs and accelerates investment rounds.
- Access to the entire Single Market: an EU Inc. can operate freely throughout all Member States without having to comply with differing national company law requirements. This increases legal certainty and facilitates cross-border activities.
- Preservation of national rules: although EU Inc. offers a harmonised company law framework, national rules relating to, among other things, employment and social law remain fully applicable. This ensures that existing protection mechanisms remain intact.
EU Inc. does not replace national legal forms but exists alongside them as an optional alternative. Businesses may therefore choose whether to adopt this European company form, depending on their activities and growth strategy, particularly if they operate or intend to operate across borders.
Other initiatives under the 28th Regime
In addition to EU Inc., the 28th Regime includes several complementary measures aimed at strengthening the business environment.
For example, the Commission encourages Member States to establish specialised courts for disputes involving EU Inc. entities, thereby promoting efficient and consistent application of the rules. The initiative also promotes maximum digitalisation of communication between businesses and public authorities, notably through the “European Business Wallet”, with the aim of reducing administrative burdens.
The proposal further addresses the attraction and retention of talent through the introduction of EU-wide employee stock option schemes. Under these schemes, employees would only become liable to pay tax when selling their shares, rather than upon the grant or exercise of the options. This would enhance employee incentives and increase the attractiveness of start-ups.
Conclusion and next steps
Through the 28th Regime, the European Commission is taking an important step towards a more integrated and competitive Single Market. The proposal aims to reduce fragmentation, lower costs and create a more attractive business environment for innovative companies.
The proposal is currently being examined by the European Parliament and the Council of the European Union under the ordinary legislative procedure. The Commission’s objective is to reach an agreement by the end of 2026. If adopted, the regulation will be directly applicable in all Member States, ensuring rapid implementation and uniform application throughout the EU.
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We will continue to closely monitor these significant and far-reaching developments. Should you have any questions, our Corporate & M&A team will be happy to assist.