- 26 June 2026
Read time: 5 minutes
On 18 March 2026, the European Commission published its proposal for a harmonised corporate legal framework: the "EU Inc.". Described as "the cornerstone and starting point of the EU's 28th regime", the purpose of the proposal is to establish a single, standardised system for company incorporation across the European Union (EU).
The proposal has been designed to enable businesses to incorporate once and operate seamlessly across all 27 Member States under a consistent set of regulations and simplified set of rules.
The key features of this proposal are:
· A fast and cost-effective digital incorporation: companies can be incorporated wholly online within 48 hours with a maximum cost of €100, with no minimum capital requirement.
· A fully digital operation: corporate processes will be fully digitised across the entire lifecycle of a company. This will be supported by an EU-level interface that connects individual Member States' business registers, as well as a central EU register for companies to obtain their tax identification and VAT numbers.
· A flexible governance structure: companies will have increased flexibility in drafting their articles of association, which would include simplified board structures and fully online shareholder meetings.
· A harmonised optional framework: EU Inc. would operate as an optional 28th regime, alongside rather than supplanting, the existing national company frameworks of individual Member States.
· A flexibility of shares: companies will have the flexibility to create different share classes with varying economic or voting rights, as well as take advantage of EU-wide employee share option schemes.
The proposal forms part of the European Commission's initiative to enhance the EU's competitiveness, prevent it from falling behind other markets and facilitate the growth of innovative companies within Europe. The proposal would shift from the existing model, where companies are required to operate within a variety of national legal systems and corporate structures when expanding across Member States. This complexity can delay the setup of a company for weeks or even months, slowing growth and raising costs.
In announcing the proposal, President Ursula von der Leyen stated:
“Europe has the talent, the ideas and the ambition to become the best place for innovators. Yet today, European entrepreneurs who want to scale up face 27 legal systems and more than 60 national company forms. With EU Inc., we are making it drastically easier to start and grow a business all across Europe. Any entrepreneur will be able to create a company within 48 hours, from anywhere in the European Union, and fully online. This crucial step is just the beginning. Our goal is clear: one Europe – one market – by 2028.”
From a governance perspective, the existing model also creates inconsistencies in corporate governance practices, shareholder rights and fiduciary responsibilities. Even where EU directives are applicable, variations in national implementation led to a fragmented landscape, leaving governance professionals to manage complexity rather than benefiting from standardised approaches.
Potential Drawbacks:
The EU Inc. proposal raises important considerations from a legal and governance perspective.
The proposal does not fully harmonise all areas of law such as taxation, employment law and the handling of disputes, which would all remain at an individual Member State level. This potentially introduces the risk of regulatory arbitrage, where companies may select jurisdictions with more advantageous regulations, thereby potentially compromising the equitable competitive environment that the proposal aims to establish.
Some commentators have questioned whether the proposal is overly broad in scope. With the intention to support start-ups and scale-ups, it remains open to companies of all sizes and sectors without being designated as a specific company type. The considerable flexibility, while potentially advantageous in promoting accessibility, could potentially create an additional layer of complexity and possibly hinder its original objectives.
Next Steps:
The EU Inc. is currently at the proposal stage, where the European Commission has published its legislative proposal, handing it over to the European Parliament and the European Council. The European Parliament and Council will negotiate implementation details. Subject to the legislative process, EU Inc. is expected to launch in 2027 and will become available for company registrations across all Member States.