EU Launches “28th Regime” to Boost Innovation and Competitiveness
The European Commission is forging ahead with plans to create a new, harmonized corporate legal regime – dubbed the “28th regime” – designed to streamline business operations and attract investment across the EU. Announced in January 2025 as part of the Competitiveness Compass, this initiative aims to provide a more agile and cost-effective environment for companies, particularly startups and those focused on innovation.
What is EU Inc.?
The core of this initiative is the “EU Inc.” framework, a voluntary corporate structure available alongside existing national company forms. It’s not about replacing national laws, but offering an alternative for founders seeking a simpler, more unified approach to operating across the European Union. The framework is intended to be particularly appealing to innovative companies.
Faster, Cheaper, and Digital Registration
One of the most significant benefits of EU Inc. Is the promise of dramatically simplified company registration. The proposal outlines a process that can be completed within 48 hours at a maximum cost of EUR 100, and entirely digitally. This contrasts sharply with the often lengthy and expensive procedures currently required in many EU member states.
Streamlined Operations and Modern Financing
Beyond registration, EU Inc. Aims to simplify procedures throughout a company’s lifecycle. This includes easier digital share transfers and capital operations, as well as support for modern financing instruments. The framework also addresses employee stock options, offering a common, optional scheme with harmonized deferred taxation to help companies attract and retain top talent.
Digitalization and Data Transparency
The EU Inc. Framework embraces digitalization, with fully digital insolvency procedures and automatic transmission of company data to relevant authorities – adhering to the “once-only principle.” This aims to reduce administrative burdens and improve transparency. Safeguards against fraud and abuse are also included in the proposal.
Aligning with Broader EU Priorities
This initiative is directly linked to the broader goals outlined in the European Commission’s Political Guidelines for 2024-2029, which prioritize strengthening Europe’s competitiveness and promoting sustainable innovation. The “New Plan for Europe’s sustainable prosperity and competitiveness” specifically aims to combine economic growth with the objectives of the European Green Deal.
Impact on SMEs
A new SME and competitiveness check will be implemented to avoid unnecessary administrative burdens, while maintaining high standards. This is a key component of the broader effort to support small and medium-sized enterprises, which are considered vital to the European economy.
Documents Available
- Communication: Towards a 28th regime for EU companies
- Proposal for an EU Inc. Corporate legal framework
- Annex to the Proposal for an EU Inc. Corporate legal framework
- Factsheet: Proposal for an EU Inc. Corporate legal framework
- Impact assessment report for an EU Inc. Corporate legal framework: Executive summary
- Impact assessment for an EU Inc. Corporate legal framework part 1
- Impact assessment report for an EU Inc. Corporate legal framework part 2
- Impact assessment report for an EU Inc. Corporate legal framework part 3
FAQ
What is the “28th regime”?
It’s a new, harmonized corporate legal regime for companies operating within the European Union, designed to simplify business operations and boost competitiveness.
Is EU Inc. Mandatory?
No, EU Inc. Is a voluntary framework. Companies can choose to operate under existing national company forms if they prefer.
How much will it cost to register a company under EU Inc.?
The maximum registration cost is EUR 100.
How long will company registration take?
The proposed registration timeframe is within 48 hours.
Who is this framework designed for?
While available to any founder, it is particularly designed for innovative companies and startups.
What are the key priorities of the European Commission for 2024-2029?
The key priorities include a New Plan for Sustainable Prosperity and Competitiveness in Europe, among others.
What is the “once-only principle”?
It refers to the automatic transmission of company data to relevant authorities, reducing administrative burdens for businesses.
Will this impact existing national company laws?
No, EU Inc. Operates alongside existing national company forms, offering an alternative option for businesses.
Where can I find more information?
Detailed documentation, including the proposal and impact assessments, are available through the European Commission’s website.
What is the Clean Industrial Deal?
It focuses on implementing the existing legal framework for 2030.
What are the seven key priorities identified by Ursula von der Leyen and the 26 Commissioners?
A New Plan for Sustainable Prosperity and Competitiveness in Europe is one of the seven key priorities.
Do you have thoughts on the EU Inc. Framework? Share your comments below!