The Proposed Regulation for an EU Inc. Corporate Legal Framework: A First Reading

On 18 March 2026, the European Commission presented the proposal for a Regulation on the 28th regime corporate legal framework – ‘EU inc.’.

The initiative introduces a new, optional European limited liability company, conceived as a “28th regime”. Rather than approximating national laws, the proposal establishes a self-standing and directly applicable corporate framework, coexisting with domestic company forms and freely selectable by market actors. It addresses a structural asymmetry of the internal market: economic integration has not been matched by a comparable level of legal integration in company law.

The proposal thus seeks to reduce legal fragmentation and transaction costs for cross-border activity by offering a single European corporate vehicle. Its design reflects a broader policy shift towards digitalisation, regulatory simplification and support for high-growth and innovative firms operating across Member States.

The Proposed Regulation

The proposed Regulation is structured in a comprehensive set of chapters covering the entire life cycle of the EU Inc.

Chapter I sets out general provisions, including subject matter, definitions and the optional nature of the regime. Chapter II governs formation and Chapter III registration, establishing fully digital incorporation procedures, standardised templates and rules on registration and legal personality. In particular, the EU Inc. is incorporated entirely online, without any physical presence, through a central European interface integrated into the Business Registers Interconnection System (BRIS), via an accelerated procedure to be completed within 48 hours and at a maximum cost of EUR 100, provided that harmonised templates and standard articles of association are used. Founders are identified through the European Digital Identity Wallet (noted by Marion Ho-Dac on this blog), removing the need for in-person verification before public authorities or notaries. The proposal also embeds the “once only” principle: information submitted to one public authority is not to be re-submitted to others. Any natural or legal person may form an EU Inc., which may also result from cross-border conversions, mergers or divisions; upon registration in a Member State, it acquires legal personality and full access to the internal market without further formalities.

As regards capital and shares, the proposal departs from traditional minimum capital requirements and relies instead on solvency-based safeguards. Under Chapter VII, no minimum capital is required: creditor protection is ensured through directors’ duties and solvency and balance-sheet tests applied at the time of distributions and capital operations. This marks a shift from the traditional continental model – where a fixed minimum capital serves as an ex ante guarantee – to a functional approach focused on the company’s actual ability to meet its obligations as they fall due, akin to systems developed in UK and Delaware corporate law.

Chapter IV regulates cross-border branches and mobility, linking the EU Inc. to existing EU rules on conversions, mergers and divisions.

Chapter V lays down the organisational framework. It introduces a flexible governance structure centred on a board of directors and a general meeting, with default rules on representation, directors’ duties, liability, conflicts of interest and shareholder decision-making. It also confirms that both shareholders’ meetings and board meetings may be held fully online with electronic written resolutions or in hybrid form, and requires Member States to designate specialised judicial sections for EU Inc. disputes, with a view to ensuring expertise and uniform application.

Chapter VI establishes a fully dematerialised share regime. Shares are recorded in a digital register with constitutive effect, and detailed provisions govern their issuance, transfer and the rights attached to different classes, including multiple voting rights and other tailored arrangements. Briefly, the regime accommodates venture capital techniques (e.g. multiple share classes, convertible instruments such as SAFEs and KISS, and fully digital share transfers without notarial intervention), and introduces an EU-wide stock option framework.

Chapter VII addresses financing, while Chapter VIII introduces the EU employee stock option plan.

Chapter IX regulates dissolution and removal from the register, including coordinated interactions with tax authorities. Chapter X introduces a simplified winding-up regime for insolvent innovative startups, characterised by digital procedures, standard forms and the use of electronic auction platforms for asset realisation. Chapter XI contains a list of prohibited national requirements, aiming to prevent discriminatory or restrictive measures against EU Inc. companies operating cross-border.

Finally, Chapter XII sets out final provisions, including rules on data protection, accounting, penalties, committee procedures and review mechanisms.

Remarks

From a private international law perspective, the most significant aspect of the proposal arguably concerns its approach to the law applicable to the company. Article 4 provides that matters not governed by the Regulation or by the articles of association are governed by the law applicable to the corresponding national company form in the Member State where the EU Inc. has its registered office. In functional terms, the proposal therefore appears to endorse an incorporation-oriented connecting factor: the applicable company law is linked to the State of registration rather than to the company’s real seat or effective centre of administration.

This choice deserves particular attention because it may operate not only as an internal rule completing the EU Inc. regime, but also as a broader statement on corporate mobility within the Union. The question is whether Article 4 merely displaces national conflict-of-laws rules for the EU Inc. itself – by imposing a uniform connecting factor for this supranational entity – or whether it signals a more general EU preference for incorporation as the relevant criterion in company law matters. Read in the broader context of the Court of Justice’s case law on freedom of establishment (see Centros, Überseering, Inspire Art, Polbud and Edil Work 2 as noted by Matthias Lehmann on this blog), the proposal may be understood as further consolidating the progressive shift away from real-seat approaches within the internal market.

The coexistence between uniform substantive rules and residual recourse to national law is not unusual in EU legislation. Earlier supranational company forms, most notably the Societas Europaea (SE) under Council Regulation (EC) No 2157/2001 and the European Cooperative Society (SCE) under Council Regulation (EC) No 1435/2003, were already built on a similar technique. The difference, however, is that those instruments were conceived as heavily hybrid structures, expressly embedded in the national law applicable to public limited-liability companies or cooperatives in the State of registration. By contrast, the EU Inc. is presented as a more autonomous and self-standing “digital-first” company form, designed to operate seamlessly across borders through harmonised incorporation, governance and registration mechanisms. Precisely for this reason, the role played by Article 4 becomes more conceptually relevant: despite the “rhetoric” of uniformity, the proposed Regulation still ultimately anchors the company to the legal system of the State of registration.

The proposal may therefore lead to a hybrid outcome: formally, a single European company form; practically, a framework whose operation will continue to depend, in part, on domestic corporate laws. Questions concerning directors’ liability, minority protection, insolvency or other matters lying outside the harmonised core may still vary depending on the Member State of registration. In that sense, the EU Inc. illustrates both the possibilities and the limits of European company law harmonisation.

To conclude, a more practical limitation emerges from the central role assigned to standardised templates. The fast-track incorporation is effectively conditional upon the use of pre-established model articles. Where founders depart from these templates and opt for tailored governance arrangements, the procedure may become longer, more expensive and, in certain countries, once again dependent on notarial involvement. In addition, the actual content of the model statutes remains to be determined through implementing acts. Their design will therefore be crucial: if the models prove insufficiently flexible, the simplification project may risk remaining more ambitious in principle than transformative in practice.