COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Towards a 28th regime for EU companies
Date: 2026-03-18
Institutions: European Commission, Secretariat-General
Subjects: administrative formalities, business start-up, company law, competitiveness, digitisation, innovation, scale-up company, simplification of formalities, small and medium-sized enterprises, start-up

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   EUROPEAN COMMISSION  Brussels, 18.3.2026  COM(2026) 320 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Towards a 28th regime for EU companies  
 
 
I. 

Introduction 

The EU is taking decisive steps in accelerating its push for competitiveness and economic 
security in an era of change. With this in mind, it must act with urgency, scale its innovations 
more decisively, and equip its policy framework to match the speed and ambition of the global 
technology  race.  Innovation  cycles  are  shortening,  technological  advances  are  unfolding 
simultaneously  across  sectors,  and  competition  for  technological  leadership  has  become 
sharper and more strategic.  

Europe  is  a  continent  bursting  with  innovation.  One  fifth1  of  all  scientific  publications 
worldwide originate in the EU. European companies also play a key role in global R&D and 
intellectual property creation. In the area of renewable energy for instance, EU companies hold 
29% of global patents2. The EU also hosts over 40,000 VC-backed tech startups, and creates 
more than any other region globally.  

Nevertheless, European innovative companies struggle to scale up and compete globally. 
Europe had only 331 unicorns compared with 1963 in the U.S as of 20253.  

The EU needs a more enabling framework to allow founders, whatever sector they are active 
in, to easily set up a business in Europe, access funding and scale in the EU. The EU is at a 
crucial stage where there is the need to create the bridges between our thrive for independence 
and competitiveness. This requires ambitious and urgent action. 

Since the start  of the mandate, the Commission  has put  competitiveness  at  the centre of its 
agenda. With its Competitiveness Compass adopted in January 2025, it committed to present 
a 28th regime, making it possible for our businesses, in particular our innovative startups and 
scaleups, to benefit from a single and simple set of EU-wide rules - wherever they invest and 
operate in the EU - reaping the full benefits of the Single Market. The EU Startup and Scaleup 
Strategy and the Single Market Strategy adopted in May 2025 seek to further improve the 
conditions for startups and scaleups reducing the reasons to relocate outside the EU.  

The  EU  Inc.  proposal  is  a  cornerstone  and  the  starting  point  of  the  Commission’s 
response – a comprehensive set of corporate rules covering the entire lifecycle of a company. 
It makes it easier to start and grow a business in Europe, attract investment and reduce the costs 
of failure. Anyone who wishes to set up a new company in the EU will have the choice to either 
use the new EU Inc. company form or another one foreseen under national law, which will 
continue being available to companies in parallel to the new company form. 

The 28th regime represents Europe’s offer to its businesses, in particular to its startups, 
scaleups and innovative enterprises, to seize the benefits of the Single Market. It will be 
the pathway for Europe’s companies to have a globally recognised European-wide company 
form,  rapidly  get  access  to  funding  and  operate  seamlessly  across  borders  –  in  all  matters 
concerning their business.  

1 Draghi report, The future of European competitiveness, p. 230. 
2 High-value patent filings, European Commission - Science, research and innovation performance of the EU 
report, 2024. 
3 Dealroom database – consulted on 16 March 2026. 

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II. 

The EU Inc. proposal  

The EU Inc. responds to the needs of innovative enterprises, enabling them to easily start 
and  scale in Europe.  It will provide  a new ambitious  corporate legal  framework in  all the 
Member States, open to anyone who deems it fit for their business model. EU Inc. will, among 
others, ensure faster (48 hours), cheaper (maximum EUR 100), fully digital registration with 
the future EU central Register, extending the once-only principle in relation to other authorities, 
and with no minimum share capital.  

The EU Register will offer EU Inc. companies an integrated and seamless user experience, 
allowing them amongst others to register the EU Inc. companies, and to access key information 
such as about their corporate structure and activities. 

The  EU  Inc.  will  remove  in-person  formalities  and  the  mandatory  involvement  of 
intermediaries for share transfers. It will provide fully digital capital and corporate governance 
procedures and enable the use of financing instruments and standardised contracts. This is for 
instance  the  case  of  future  equity  agreements  like  SAFEs  (Simple  Agreements  for  Future 
Equity) which are preferred by investors. This also aims to encourage Member States to allow 
EU Inc. companies to access regulated markets. 

Founders, as well as existing companies, will be free to choose the EU Inc. form. The new 
framework will allow all companies in Europe, no matter their size and corporate purpose, to 
opt-in and remain in this regime.  

This will bring the benefits of reducing administrative burden and simplification to all 
companies. Most of the newly formed EU Inc. companies are likely to be set up by natural 
persons and be innovative startups and innovative scaleups. Therefore, the estimated overall 
administrative burden reduction of between EUR 328 million to EUR 440 million over a period 
of 10 years would mostly benefit this group of companies. 

The EU Inc. proposal will include additional elements to attract and retain talent. All EU 
Inc. companies can opt into the EU common scheme for employee stock options (EU-ESOs). 
The employees who have been granted stock options under EU-ESO will be subject to taxation 
in the EU only at the time of disposal of the underlying shares. This prevents a situation where 
taxes would have been paid in the absence of an actual income.  

Founders should also have the chance to try and test, and to start again. Innovative startups 
registered  as  EU  Inc.  companies  will  therefore  have  access  to  simplified  insolvency 
procedures,  to  help  them  restart  faster.  This  proposal  complements  the  approximation  of 
substantive  insolvency  laws  achieved  by  the  Directive  harmonising  certain  aspects  of 
insolvency  law,  adopted  in  2026.  In  that  context,  this  has  been  achieved  in  particular  by 
providing  for  a  simplified  winding  up  procedure  and  a  framework  for  electronic  auction  of 
assets. 

EU Inc. companies will be free to choose the Member State in which to incorporate and 
where  to  set  up  the  headquarter,  making  full  use  of  the  Single  Market.  A  blacklist  of 
prohibited  national  practices  will  ensure  that  the  EU  Inc.  companies,  wherever  they  are 
incorporated, are treated in the same way as other limited liability companies formed under 
national law. For example, a company should not be requested to be established or to have a 
subsidiary  or  a  local  representative  in  a  Member  State,  in  order  to  have  access  to  state  aid 

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support, to exercise an economic activity or obtain an authorisation. It should not be denied to 
use  a  bank  account  set  up  in  another  Member  State  to  get  an  authorisation  or  carry  out  an 
economic activity.  

The proposal, in addition, will provide safeguards to prevent any risk of potential fraud 
and abuses. In this context, EU Inc. builds upon the existing protections in national and EU 
law.  

Founders will be able to rely on the new EU Inc. form in the same manner throughout 
the  EU.  This  is  critical  to  ensure  the  recognition  of  the  EU  Inc.  by  the  global  investment 
community.  The  EU  Inc.  is  therefore  established  by  way  of  a  Regulation.  This  ensures  a 
coherent and unified framework of harmonised rules. In particular, the new legal form will be 
provided in each of the legal orders of EU Member States.  

III. 

 Innovative enterprises, innovative startups and innovative scaleups  

The EU Inc. initiative will support in particular innovative startups and innovative scaleups to 
translate innovative ideas into globally successful businesses. However, there is currently no 
single EU definition of those companies, while numerous national and Union-level supporting 
measures are designed to target innovative enterprises, startups or scaleups. This may lead these 
measures to be ineffective or be applied inconsistently between Member States, and impedes 
the good functioning of the EU single market.  

Therefore, as a part of the proposals put forward in this package, and as announced in the EU 
Startup and Scaleup Strategy, the Commission is adopting a Commission Recommendation 
on the definitions of innovative enterprises, innovative startups and innovative scaleups. 
These definitions build on objective criteria related to investments in innovation activities, age, 
size or growth and well-established criteria from the Commission recommendations on small 
and medium size enterprises (SMEs) and small  mid-caps (SMCs), including size thresholds 
and structural characteristics. It is addressed to Member States, the European Investment Bank 
(EIB) and the European Investment Fund (EIF). Others, such as National Promotional Banks 
and Institutions (NPBI) are also encouraged to apply the definitions.  

The  proposed  definitions  are  designed  to  provide  pragmatic  ways  for  assessing  and 
demonstrating  that  criteria  are  met.  Practically,  this  will  allow  to  improve  the  alignment, 
consistency and effectiveness of policies targeting innovative enterprises, startups and scaleups 
in  the  EU,  and  facilitate  data  collection  to  measure  the  impact  of  these  policies.  Since 
innovative enterprises, startups and scaleups, in particular in deep-tech areas, play a key role 
in  the  development  and  commercialisation  of  innovative  technologies,  these  EU  definitions 
mark an important step toward a more innovative and competitive EU.  

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IV.  Complementary measures towards the 28th regime 

Digitalisation 

The EU will continue the efforts to reduce administrative burdens, improve agility of its legal 
framework and simplify, while addressing fragmentation and obstacles in the Single Market. 
These efforts include first a maximum digitalisation of all matters relating to doing business 
in  the  single  market.  A  100%  digital  environment  enables  a  truly  efficient  and  competitive 
company framework that attracts investors, from within and outside the EU. To support a fully 
digital business environment, the framework should remain technologically neutral and allow 
companies to use digital solutions such as distributed ledger technology, tokenised shares and 
smart contracts. 

The European Business Wallet will allow EU Inc. companies to make full use of digital tools 
for all their interactions with public authorities and economic operators across the Union. After 
an EU Inc. company is set up, all the relevant data will be available in the European Business 
Wallets,  for  those  using  such  solutions. This  means  that  an  EU  Inc. company  can  use  the 
Business  Wallets  to  effortlessly take  actions  such  as submitting tax  returns,  applying for 
permits, signing and exchanging contracts with public authorities and business partners across 
the EU - without the need for physical documentation or in-person interactions and with full 
legal validity. Business Wallets enable completely automated management of business identity 
and data, including that of customers and business partners.  

Furthermore,  it  is  important  to  ensure  interoperability  and  avoid  duplications  between  the 
existing systems already enabling digitalisation for companies, such as the Business Registers 
Interconnections  System  (BRIS)  and  the  Single  Digital  Gateway Regulation.  Through 
the Single Digital Gateway Regulation, in particular, the Commission obliges Member States 
to provide online access to information, procedures, and assistance services that EU businesses 
may need in another EU country. Through the Once-Only-Technical System (OOTS), Member 
States  can  exchange  evidence  and  documents  in  an  automated  and  secured  manner. Most 
Member  States  are,  or  will  shortly  be,  technically  ready  to  use  this  system,  but  not  all  the 
relevant  procedures  and  documents  are  on-boarded  yet. Member  States  should  therefore 
prioritise now the on-boarding of procedures and evidence that are critical for key stages of the 
business  lifecycle  of  an  EU  Inc.  and  that  generate  significant  cross-border  interaction.  The 
Commission  will  continue  to  support  Member  States  in  this  endeavour,  and  to  enrich  the 
evidence  available  for  the  operation  of  companies,  itcalls  on  Member  States  to  identify  the 
relevant priorities by 30 September 2026. 

Startups  and  scaleups  often  struggle  with  high  costs  and  delays  due  to  the  mandatory 
submission of certified document translations, hindering thus their market competitiveness 
and  efficiency.  A  certified  AI  based  automatic  translation  system  can  support  public 
administrations to  understand and  accept  documents  originating from  other Member States. 
This  would  significantly  reduce  language  barriers  and  administrative  burdens  costs  for 
companies in cross-border operations. In addition, the broader deployment of multilingual AI 
based services will enable companies to communicate with public sector bodies in cross-border 
situations.  

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Access to finance 

Startups and scaleups need rapid access to capital. They will be able to take full advantage of 
the scale and depth of the EU capital market, and the range of financing opportunities, building 
on the measures being adopted under the Savings and Investments Union, and the European 
Competitiveness  Fund  and  the  Scaleup  Europe  Fund.  The  revision  of  investment  rules  of 
pension  funds  will  strengthen  business  capacity  to  invest  in  listed  and  unlisted  equity.  The 
upcoming review of the European Venture Capital Funds Regulation will further promote the 
development of a more dynamic and integrated market for venture and growth capital funds. 
These are key for startup and scaleup companies with uncertain future revenues and a lack of 
tangible assets.  

Attracting and retaining talent 

EU Inc. companies need also favourable employment and taxation conditions to retain and 
attract talent and swiftly operate across borders.  

In  the  area  of  employment,  with  the  forthcoming  Fair  Labour  Mobility  package,  the 
Commission will explore the possibility to allow 100% cross-border telework for startups and 
scaleups across the Union, applying the social security legislation of the Member State where 
the employer is located. The Commission will also develop a legal framework to speed up the 
digitalisation  of  social  security  attestations  through  the  European  Social  Security  Pass 
initiative. The Skills Portability Initiative will aim to remove obstacles to mobility of workers 
linked  to  qualifications  and  skills,  including  through  digitalisation.  The  Commission  will 
explore  ways  to  simplify  procedures  for  handling  the  recognition  and  validation  of 
qualifications and skills of third country nationals. These measures will be complemented by 
attracting talent from abroad through the EU Talent Pool Regulation, which, once operational, 
will facilitate job-matching in the recruitment of non-EU talent. The Commission will further 
explore the feasibility of an ‘Omnibus’ of targeted amendments to the EU’s legal migration 
framework  to  ensure  that  is  aligned  with  the  Union’s  competitiveness  and  innovation 
objectives. 

Taxation 

On taxation, the Commission has proposed a Head Office Tax (HOT) system that would allow 
small and medium-sized enterprises (SMEs) to apply the tax rules of their home country. In 
addition, the Business in Europe Framework for Income Taxation (BEFIT) initiative aims to 
establish a single legislative framework for corporate taxation in the EU. A swift adoption of 
the proposals is necessary to better support companies, and especially startups and scaleups, 
which  face  divergent  and  complex  tax  rules  in  each  Member  State.  The  Commission  will 
continue  to  support  the  negotiations  in  Council  on  these  files.  The  upcoming  Omnibus 
simplification  package  on  direct  taxation  should  further  remove  additional  administrative 
burdens  by  simplifying  existing  legislation.  Finally,  the  Commission  encourages  Member 
States to characterise and tax the income derived from the EU- ESO as capital gains as opposed 
to employment income. 

Clear predictable and swift legal framework 

To allow for an effective, efficient and uniform application of the EU Inc. rules, Member States 
should consider dedicating one specialised judicial chamber or court with the authority to 
handle disputes on EU Inc. company law. By centralising expertise, this approach would help 

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improve  consistency  in  rulings,  minimise  procedural  bottlenecks,  and  deepen  judicial 
understanding of the framework’s unique aspects - thereby bolstering investor confidence and 
facilitating cross-border trust. While this would not necessitate standardising national judicial 
systems,  it  would  send  a  clear  signal  of  Member  States’  commitment  to  ensuring  the 
framework’s  practical  success.  The  Commission  will  support  effective  and  consistent 
application.  

In addition, innovative startups and scaleups can already benefit from a stable and predictable 
framework  on  jurisdiction  of  the  courts,  applicable  law,  including  labour  law,  and 
recognition  and  enforcement  of  judgments  across  the  Union  for  their  cross-border 
commercial transactions. The Brussels Ia Regulation dealing with international jurisdiction and 
recognition and enforcement of judgments in civil and commercial matters, is currently being 
assessed in order to further improve its effects on competitiveness. In addition, the Commission 
makes available guidance, to support companies, in particular startups and scaleups, via the 
European e-Justice Portal.   

V. 

Conclusion 

With the proposals adopted today, the Commission is continuing its efforts of making Europe 
the  best  place  to  start  and  grow  a  company,  simplifying  and  speeding  up  the  access  to  the 
opportunities offered by the Single Market and enhancing competitiveness.  

Speed is of the essence. The Commission invites the European Parliament and the Council to 
proceed swiftly with the adoption of the EU Inc. legislative proposal given its key importance 
for EU’s prosperity. The Commission will do its utmost to support the co-legislators in this 
respect with the clear objective to reach an agreement by end of 2026.  

The Commission will monitor the progress towards fast adoption of the proposal in the context 
of the Roadmap One Europe One Market. It will further monitor the roll-out of the ancillary 
measures  put  forward  in  this  Communication  and  explore  potential  additional  measures  to 
strengthen the 28th Regime.  

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