I. Background

Although the EU offers a single market with over 450 million consumers, there are still 27 different national corporate law systems. For companies seeking to operate across borders, this means divergent regulations, high transaction costs, and complex legal structures. Foreign investors may be deterred by the fragmented corporate law landscape within the EU. The European Commission responded by announcing a “28th regime” that would operate alongside the corporate law systems of the 27 member states. On March 18, 2026, the Commission finally presented a draft regulation for the EU Inc.
The European Parliament and the Council of the EU are currently reviewing the draft. The Commission aims to complete the legislative process by the end of 2026. If successful, the regulation will enter into force 20 days after its publication in the Official Journal of the EU. However, it would not become applicable until twelve months later, i.e., at the earliest beginning of 2028. The EU regulation will automatically and uniformly introduce the EU Inc. throughout the Union without requiring member states to adopt their own implementing laws.

II. The Concept of the EU Inc.

The EU Inc. does not replace existing national legal forms for corporations but rather complements them. GmbH, SAS, Ltd., and all other national corporate forms remain unaffected. Those who opt for the EU Inc. benefit from a uniform set of rules across the EU. However, tax law as well as labor and social security law remain unaffected. The law of the respective registered office of the EU Inc. applies.
The current draft provides for the following structure for the EU Inc.:
Founders and Registered Office
Both natural and legal persons may establish an EU Inc., regardless of whether they are based in the EU or in a third country. Establishment is possible from scratch or through the conversion of an existing company. The registered office may be freely chosen in any member state, regardless of the actual center of business operations. Branches may be established within the EU without the need to set up a subsidiary.
Incorporation Process
The formation of an EU Inc. is conducted entirely digitally via the newly created EU Central Interface, which is built on the existing Business Registers Interconnection System (BRIS). The future managing directors complete a harmonized, machine-readable application form; identification and signature are performed via digital identity in accordance with the eIDAS Regulation (EU) No. 910/2014.
If the following three criteria are cumulatively met, registration is completed within 48 hours at a maximum cost of EUR 100.00. The prerequisites are, first, the use of the EU Central Interface; second, the use of the EU model articles of association; and third, the absence of grounds for disqualification among the intended managing directors. Incorporation with custom articles of association takes place within five business days. Formation directly with the national commercial register is also possible.
The preventive check automatically verifies name conflicts with EU and national trademarks, as well as restrictions on serving as a managing director in other member states.
The “once-only” principle ensures that company data is automatically forwarded to all relevant authorities and agencies – in particular tax and social security authorities and transparency registers – without the need for separate submissions.
Finally, proposals for bilingual model documents, recognized AI-supported translation options, a digital EU company certificate, and a digital EU power of attorney promise significant practical benefits.
Management
EU Inc. is managed by a board of directors, at least one of whom must be a resident of the EU. Managing directors owe a duty of loyalty to the company and are liable for breaches of duty, unless the business judgment rule applies. In the event of conflicts of interest, there are disclosure and abstention obligations. Shareholder meetings and board meetings may take place entirely online.
Capital Structure
EU Inc. has no minimum capital requirement. The capital can therefore be as low as EUR 0.00. Instead of traditional capital maintenance rules, the draft relies on two cumulative tests for each distribution: First, net assets must not fall below zero (balance sheet test); second, the company must still be able to settle its liabilities after the distribution (solvency test). The model is based on modern Anglo-Saxon corporate law.
The draft regulation also provides for the creation of various share classes with different voting and property rights, as is common in equity-financed companies. In addition, modern early-stage instruments such as SAFEs (Simple Agreements for Future Equity) and convertible bonds are envisaged, which, like newly issued shares, are to be subscribed to entirely digitally.
Digital Share Register and Share Transfer
Every EU Inc. maintains a fully digital share register. Share transfers take place purely digitally via an electronically signed contract, electronic notification to the company, and entry in the digital register, without the need for a notary and without the involvement of intermediaries. The draft is open to both the tokenization of shares and trading on a stock exchange.
Liquidation and Insolvency
Even at the end of the business venture, the regulation focuses on simplification to minimize the burden of liquidation on the founders. In the case of solvent liquidation – the winding up of a solvent company – it is sufficient to file a standard form with the commercial register. An insolvency administrator is not required, and the process is expected to be completed within approximately three months. Any remaining creditor claims are then the joint and several liability of the managing directors. For insolvency cases, the regulation provides for a simplified insolvency winding-up procedure that is specifically tailored to startups and is intended to limit the duration of the proceedings to approximately six months.
EU-ESOP
Another element relevant for businesses is the harmonized EU Employee Stock Option Plan (EU-ESOP). It allows for the issuance of stock options to employees and executives. Taxation occurs only at the time of the sale of the shares, not upon the issuance of the option or its conversion into shares. Here, national tax law is exceptionally affected, and the issue of dry income is addressed.
Limits of Harmonization
The EU Inc. harmonizes only corporate law. Labor and social security law, tax law, as well as licensing and approval requirements remain under national jurisdiction. The employee co-determination rules applicable at the registered office apply to the EU Inc. without restriction. The decision on registration also lies with the national commercial register and not with an EU authority. There will be no specialized EU courts for EU Inc. disputes; national courts will remain competent.

III. Assessment and Outlook

The draft regulation is a compelling step toward a more competitive Europe. The 48-hour fast track, digital processes, the absence of a minimum capital requirement, and the harmonized EU-ESOP raise expectations against which EU Inc. must measure itself in practice. Although it may seem that the target audience for the EU Inc. is primarily startups and scale-ups, the new corporate form could be of great interest to groups of companies and platforms pursuing a buy and build strategy, as the simple and digital nature of the EU Inc. holds the potential to drastically reduce transaction costs.
Although many of the ideas presented in the draft are convincing, there are already points of concern or criticism in some areas: The absence of a minimum capital requirement is definitely attractive to founders. However, it remains to be seen whether balance sheet and solvency tests, as substitute mechanisms, offer equivalent creditor protection. For companies, this could become a practical problem: business partners who do not find a solid capital base might act more cautiously. EU Inc. could thus lose its appeal precisely where it is supposed to score points.
The ability to freely choose the registered office regardless of the actual center of business is practical from the founders’ perspective. However, it carries the risk of a race to the bottom within the EU. Member states with particularly liberal co-determination rules could be specifically chosen as the country of incorporation, not for business reasons, but for regulatory ones.
Another structural shortcoming lies in the lack of a unified jurisdiction. Disputes involving EU Inc. are heard in national courts. Until the European Court of Justice issues clarifying rulings, there is a risk of 27 potentially different interpretations of the same regulation. This is a disadvantage for founders and investors who rely on legal certainty and predictability. The provision stating that the legal system at the registered office of EU Inc. is intended to fill potential gaps in the EU regulation and the articles of association of an EU Inc. follows the same line of reasoning. This could potentially make simple and uniform implementation considerably more difficult.
The draft’s requirements regarding the digitization and speed of registries and national authorities are ambitious. From an entrepreneurial perspective, this is the right approach and long overdue. It remains to be seen, however, what will ultimately remain of the welcome ideas in the current draft.

IV. Conclusion

With EU Inc., the EU aims to close a gap that has been lamented for years. Whether the draft delivers on its promise will be revealed by the ongoing legislative process and practical implementation. The political will is evident; now it comes down to implementation. We will closely monitor the process and remain available to answer any questions you may have.