COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on THE 28TH REGIME CORPORATE LEGAL FRAMEWORK - 'EU INC'
Date: 2026-03-18
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: business start-up, company law, competitiveness, digitisation, innovation, scale-up company, simplification of formalities, single market, small and medium-sized enterprises, start-up

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  EN 

   EUROPEAN COMMISSION  Brussels, 18.3.2026  SWD(2026) 322 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT    Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  on THE 28TH REGIME CORPORATE LEGAL FRAMEWORK - 'EU INC' {COM(2026) 321 final} - {SEC(2026) 321 final} - {SWD(2026) 321 final}  
 
 
Executive Summary Sheet  

Impact assessment report for the initiative on the 28th regime corporate legal framework 

A. Need for action 

What is the problem and why is it a problem at EU level?  

The  overarching  problem  that  companies  and  in  particular  start-ups  and  scale-ups  face  in  the  EU  is  the 
fragmentation of corporate rules accentuated by the absence of a harmonised legal form with an EU brand 
suitable for smaller companies such as startups. Companies also face burdensome, complex and often non-
digital corporate rules and procedures throughout their lifecycle. The insufficient availability of digital tools, 
processes that don’t reflect the “once-only principle”, and divergent minimum capital requirements result in 
delays and burdens when setting up a company. Similarly, non-digital and complex corporate rules such as 
procedures  related  to  amendments  of  the  articles  of  associations  or  liquidation  render  the  operation  and 
closure  of  companies  burdensome  and  slow.  In  addition,  EU  founders  and  companies  face  difficulties  in 
attracting early-stage and growth-stage investment due to fragmented, non-digital and costly requirements 
concerning the entry and exit of investors, e.g. for capital increases, share transfers and terms expected by 
venture  capitalists.  Divergent  national  rules  also  undermine  the  ability  of  European  companies  to  offer 
competitive  employee  stock  ownership  plans  to  compete  for  top  talent.  All  these  problems  lead  to  legal 
uncertainty, administrative burden and costs. 

What should be achieved? 

The  overall  objectives  are  to  strengthen  the  competitiveness  of  EU  companies  and  the  EU  economy,  to 
improve the functioning of the single market, to provide better conditions for starting a business and  better 
opportunities for company growth, and to encourage more investment into EU companies and in particular, 
startups and scaleups. 

More specifically, the initiative aims to provide a common corporate legal framework in the EU, with simple 
and efficient corporate rules and procedures throughout the company lifecycle and an enabling framework to 
invest, responding to the needs of startups and scaleups but legally open to all founders and companies. 

What is the value added of action at the EU level (subsidiarity)?  

There is a strong value added because the identified problems are mainly caused by divergent national rules 
and a lack of appropriate rules at EU level. A coherent legal corporate framework with a harmonised company 
form and an EU brand to address such issues can only be achieved by EU-level action to provide common rules 
across the single market.  

Without EU-level action, national legislative developments to improve business environment for companies, 
including start-ups and scale-ups, would continue but would likely maintain a patchwork of laws rather than 
result in a unified solution throughout the single market. EU founders would continue to face challenges when 
setting up and running companies, and some startups would continue to move to third countries with more 
attractive conditions to scale up.  

B. Solutions 

What are the various options to achieve the objectives? Is there a preferred option or not? If not, why? 

The impact assessment analyses the policy options under 7 main issues relevant for the planned initiative, 
i.e.:  providing a harmonised company legal form; making registration of companies and in particular startups 
quicker and simpler; ensuring once-only submission of information in the context of registration; facilitating 

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closure (liquidation); attracting talent; providing a flexible governance and capital regime; and facilitating exit 
options. 

All the assessed policy options would entail legislative measures, given that the problem drivers are legal. A 
legislative initiative was also announced in the Competitiveness Compass, the Single Market and Startup and 
scaleup Strategies and the 2026 Commission Work Programme. The preferred option consists of a package 
of preferred measures under each of the main issues: 

1.  Introduce  a  new  harmonised  legal  form  for  a  28th regime  company  with  an  EU  brand,  to be  set  up by 
natural and legal persons, or through domestic conversions and cross-border conversions, divisions and 
mergers, and with harmonised rules for branches of 28th regime companies; 

2.  Create  an  EU  single  interface,  based  on  the  Business  Registers  Interconnection  System,  BRIS,  for 
registration of 28th regime companies with harmonised bilingual templates,  with a deadline (48 hours) 
and a cost ceiling of EUR 100 for registration including the preventive administrative, judicial or notarial 
control when the standardised template is used by founders as natural persons; 

3.  In  the  context  of  registration,  ensure  that  the  company  information  is  transferred  from  the  business 
register to the authority in charge of the TIN and VAT identification numbers, social security authority and 
beneficial ownership register without the 28th regime company needing to submit it again (“once-only 
principle”), and that the company obtains the TIN and the VAT identification numbers;  

4.  Ensure that filings by the liquidator for closure (outside insolvency) are transferred from business register 
to other authorities (“once-only principle”); provide for online filing of claims from creditors; a simplified 
liquidation  procedure  for  solvent  companies  without  assets  and  debts;  and  simplified  insolvency 
procedures thanks to their full digitalisation; 

5.  Allow 28th regime companies to set up employee stock ownership plans (ESOPs) and issue classes of 
shares  with distinct  voting  rights  and  introduce  an  optional  common  EU-ESO  scheme  for  28th regime 
companies, with harmonised timing for the taxation of employee stock options under the EU-ESO. 

6.  Create a flexible governance system; provide simple and fully digital procedures to increase capital and 
issue shares; enable the use of modern early-stage financing instruments like SAFEs; and introduce EUR 
0  or  1  minimum  capital  but  no  paid-in  share  capital  for  incorporation  with  harmonised  creditor 
safeguards. 

7.  Ensure  that  transfers  of  shares  of  28th  regime  companies  can  be  carried  out  fully  digitally,  without 
involvement of intermediaries, and with a possibility for Member States to allow access to public equity 
markets to 28th regime companies. 

What are different stakeholders' views? Who supports which option?  

Overall,  stakeholders  across  the  consultation  activities  (public  consultation,  call  for  evidence,  targeted 
meetings  with  stakeholders,  High  Level  Forum  on  justice  for  growth,  expert  advice  from  company  law 
professors) confirmed the identified problems and broadly supported action at EU level.  

Companies, founders and investors (accounting for a large majority of consultation respondents) strongly 
supported a common corporate legal framework which would include digital and more efficient procedures to 
set  up  and  invest  in  companies,  and  measures  to  make  it  easier  to  attract  and  retain  employees  through 
employee stock  options. There was  also agreement across stakeholders  in favour  of a broad scope for the 
framework, in particular for not limiting it to a sub-set of companies such as startups or innovative companies. 

Legal  practitioners  stressed  the  need  for  legal  advice  when  establishing  a  company  and  emphasised  the 
importance of preventive checks in company formation procedures, whereas trade unions strongly stressed 
the importance of respecting workers’ rights.   

C. Impacts of the preferred option 

What are the benefits of the preferred option (if any, otherwise of main ones)?                                     

Founders  and  companies  choosing  the legal  form  of  a  28th  regime  company  will  strongly  benefit  from the 
initiative at each step of their lifecycle: from more efficient registration with the “once only principle” exchange 

 
 
of information between authorities and EUR 0 or 1 minimum share capital, from a common EU-ESO scheme 
for  employee  stock  options  with  a  harmonised  timing  of  taxation,  and  from  simpler  or  digitalised  closure 
procedures. The package is expected to strongly reduce administrative burdens with savings between EUR 
328 million and 440 million for the estimated 308 000 28th regime companies over a period of 10 years. 28th 
regime companies would also benefit from simpler and digital procedures for capital operations (e.g. capital 
increases, share issuance) and other corporate law procedures (e.g., online shareholder meetings).  

The package is expected to also significantly improve the investment environment with both investors and 
companies benefiting from administrative burden reduction due to the removal of in-person formalities and 
mandatory involvement of intermediaries for share transfers, with the estimated average savings of EUR 1 780 
– EUR 2 850 for a growth-stage transaction of EUR 500 000, and fully digital procedures to increase capital and 
issue shares, with savings of around EUR 1 100 per financing round. Investors would also profit from improved 
exit options in Member States allowing 28th regime companies to access public equity markets without a legal 
conversion.  

Public  authorities,  including  business  registers,  are  expected  to  benefit  from  efficiency  gains  stemming 
from  digital  procedures  and  the “once-only”  transmission  of  company  information.  Common  rules  and  a 
recognisable  EU  brand  should  also  result  in  increased  legal  certainty  for  public  authorities,  intermediaries 
involved in corporate procedures, such as notaries, and private legal professionals. 

What are the costs of the preferred option (if any, otherwise of main ones)?                                    

The package is expected to result in only limited one-off adjustment costs for existing companies that choose 
to become 28th companies through domestic conversions or cross-border mergers, divisions or conversions, 
including legal and organisational changes.  

What are the impacts on SMEs and competitiveness?  

As most 28th regime companies are expected to be set up by natural persons and be  SMEs, the estimated 
overall administrative burden reduction of EUR 328 million to EUR 440 million over a period of 10 years would 
mostly benefit this group of enterprises. Some existing SMEs could also choose to become 28th companies 
and some others would benefit indirectly, e.g. as business partners or subcontractors. The initiative will also 
in particular benefit start-ups and scale-ups as it responds in many of its features to their needs. 

By harmonising and strengthening the regulatory framework for companies in the single market, the initiative 
would make the EU a more attractive location for innovative and growth-oriented companies and therefore, 
contribute to the EU’s long-term competitiveness. The possibility of an affordable and fast incorporation of 28th 
regime  companies  should  encourage  European  founders  to  set  up  companies  in  the  EU.  Simplified  and/or 
digitalised procedures throughout the company lifecycle, including to attract investment, as well as the EU-
ESO should also enhance the EU’s attractiveness as a place to scale and to attract and retain employees, 
offering strong advantages as compared to other jurisdictions. 

Will there be significant impacts on national budgets and administrations?  

This package is expected to result in one-off costs, estimated at EUR 2.7 million for all Member States, to adapt 
national IT systems to the EU single interface for registration of 28th regime companies. Member States will be 
able to build on the technology already developed to interconnect national business registers to BRIS. There 
are likely to be extra costs for some Member States to connect authorities in charge of preventive control to 
business  registers,  estimated  at  around  EUR  50 000  per  each  of  those  Member  States.  The  automatic 
transmission  of  company  information  between  business  registers  and  other  authorities  would  also  entail 
limited  one-off  IT  costs, given the digital  developments already ongoing in national  administrations. In the 
context  of  insolvency  proceedings,  some  costs  could  be  expected  for  development  and  maintenance  of 
platforms for electronic auctions systems estimated to amount to between EUR 500 000 to EUR 700 000 for 
all Member States. 

The cost ceiling of EUR 100 to complete the registration (with a standardised template) would entail reduced 
revenue for business registers and other authorities involved in the registration including preventive control. 

 
 
This should be at least partially offset by increased economic activity and tax contributions from the new 28th 
regime companies.  

The  harmonised  timing  of  taxation  of  employee  stock  options  under  the  EU-ESO  would  derive  negative 
liquidity effects for Member States where income from employee stock options is currently taxed at an earlier 
stage, but the effect is expected to be moderate and of a temporary nature, until taxes become due. 

Will there be other significant impacts?  

The  initiative  would  strongly  contribute  to  the  functioning  of  the  single  market,  including  by  reducing 
fragmentation of corporate rules and introducing digital by default procedures.  

Proportionality?  

The  package  of  preferred  measures  will  not  go  beyond  what  is  necessary  to  achieve  the  objectives.  The 
initiative is targeted as it addresses the areas which stakeholders, in particular companies and founders, raised 
as problematic in the consultation activities and focuses on providing a common corporate legal framework 
across the EU, which needs to be addressed at EU level. The estimated costs of the package are proportionate 
to the objectives and overall, a strong benefit is expected for companies, in particular startups and scaleups.  

D. Follow up 

When will the policy be reviewed?  

The  legislative  proposal  will  include  an  obligation  to  carry  out  an  evaluation  after  a  specific  time  after  the 
implementation of the relevant measures.