Commission unveils ‘EU Inc.’ proposal to simplify cross-border business in Europe

The European Commission has presented a new proposal aimed at making it significantly easier for companies to start, operate and scale across the EU, introducing a single, optional corporate framework known as “EU Inc.”

Positioned as the cornerstone of a broader “28th regime”, the initiative seeks to address one of the most persistent challenges facing European businesses: fragmentation across national legal systems.

A response to Europe’s fragmented business landscape

Today, companies looking to expand within the EU must navigate 27 different legal systems and more than 60 company law frameworks, which can delay expansion, increase administrative costs and deter growth altogether.

The Commission argues that this complexity has long placed European startups and scale-ups at a disadvantage compared to counterparts in more unified markets, such as the United States.

EU Inc. is designed to offer a single set of harmonised corporate rules that businesses can choose instead of relying on national regimes, effectively creating a pan-European company structure without replacing existing national systems.

Faster setup and fully digital operations

One of the most striking elements of the proposal is the promise of speed and simplicity. According to the Commission, companies will be able to register an EU Inc. entity within 48 hours, at a cost of less than €100 and without minimum share capital requirements.

Corporate processes will be digital by default, with businesses submitting their information once through an EU-level interface that connects national business registers. A central EU registry is also planned at a later stage.

Tax identification and VAT numbers would be issued without requiring companies to resubmit documentation, further reducing administrative friction.

Designed with startups and scale-ups in mind

The proposal is closely aligned with the EU’s competitiveness agenda and builds on recommendations from Mario Draghi’s report on European competitiveness, which highlighted the need to make it easier for innovative companies to scale.

EU Inc. introduces several features aimed specifically at startups and high-growth firms, including simplified insolvency procedures, fully digital liquidation processes, and the ability to establish EU-wide employee stock option plans – taxed only when gains are realised.

The framework also allows for more flexible share structures, enabling founders to create different classes of shares and maintain control as they scale.

Improving access to capital and talent

By removing in-person formalities and simplifying share transfers, the Commission aims to make EU-based companies more attractive to investors. Member States will also have the option to grant EU Inc. companies access to stock exchanges.

In parallel, the initiative is expected to support talent attraction, particularly in the tech and startup ecosystem, by offering more competitive and standardised stock option schemes across the EU.

Safeguards and national rules remain

Despite introducing a harmonised corporate structure, the Commission has stressed that national employment and social laws will remain fully applicable.

EU Inc. companies will be subject to the safeguards of the Member State in which they are registered, including rules on worker participation and co-determination.

The proposal also includes measures to prevent abuse, ensuring that EU Inc. entities are treated in the same way as national companies.

Part of a broader push for a ‘28th regime’

The EU Inc. proposal forms part of a wider effort to create a more integrated European business environment. Alongside it, the Commission has outlined additional initiatives, including:

• Greater digital interaction between businesses and public authorities, potentially through a European Business Wallet
• Exploration of 100% cross-border telework for startups and scale-ups
• Measures to improve access to capital, including reforms linked to the Savings and Investment Union
• Ongoing work on tax harmonisation through initiatives such as BEFIT and the Head Office Tax system

The Commission has also issued a recommendation to standardise definitions of innovative enterprises, startups and scale-ups across the EU.

Backed by startup ecosystem, but challenges remain

The concept of a pan-European legal entity has already gained traction among founders, investors and startup advocates, who have long argued that regulatory fragmentation is holding Europe back.

Advocacy efforts around “EU–INC” have emphasised the need for a single legal structure, standardised investment documentation and EU-wide stock option schemes, positioning the initiative as a potential catalyst for a stronger European startup ecosystem.

However, the proposal will now need to secure agreement from both the European Parliament and the Council, meaning all 27 Member States must align on its final form – a process that could prove complex.

The Commission is pushing for an agreement by the end of 2026, with the broader ambition of moving closer to a truly unified Single Market by 2028.

If adopted, EU Inc. could mark a significant shift in how businesses operate across Europe: reducing administrative barriers, accelerating growth, and potentially reshaping the continent’s competitiveness on the global stage.