Company LawEuropean Law
An assessment of the March 2026 EU Inc. proposal: European company law reform between faster incorporation, employee stock options and the ambition of a genuine European "28th regime".
With the proposed EU Inc., the European Commission in mid-March 2026 tabled a draft Regulation intended to create a new harmonised corporate form across the Union. Politically, the initiative sits within the broader project of a European "28th regime": an optional, EU-wide legal framework meant to coexist with the 27 national systems and to enable innovative businesses to use the Single Market as a genuinely integrated legal and economic space. In the Commission's own framing, EU Inc. is the company-law cornerstone of that broader project.
The proposal starts from a diagnosis that is difficult to dispute. Businesses seeking to incorporate in Europe and scale across borders still operate in a fragmented legal environment consisting of 27 national legal systems and more than 60 company law forms. For startups and scaleups, that diversity often functions less as meaningful freedom of choice than as a source of transaction costs, legal complexity, procedural delay and structural uncertainty. From that perspective, fragmentation in company law is not merely a technical inconvenience; it is a competitiveness problem for the internal market itself.
The proposal starts from a diagnosis that is difficult to dispute.
EU Inc. does not seek to abolish national corporate forms. Instead, it introduces an optional European regime alongside them. Founders would therefore remain free to choose between a domestic company form and the new EU Inc. The Commission also stresses that the new form should be the same in every Member State and that entrepreneurs should be free to choose the Member State in which they incorporate. This legislative design is significant: harmonisation is pursued not through replacement of domestic models, but through the creation of a competitive European form intended to coexist with them.
The most immediately visible innovation concerns incorporation. The proposal provides for a "fast-track" formation process via a central EU interface, to be completed within 48 hours and at a maximum cost of EUR 100, provided that founders use the harmonised EU templates for the articles of association. If bespoke articles are used instead, registration should still take place entirely online, but within five working days. The underlying logic is clear: incorporation is being reconceived as a standardised digital Single Market process rather than as a primarily national set of formalities.
That logic continues throughout the company's lifecycle. The regime is designed to be digital by default: company-law procedures should, as a rule, be completed fully online, with physical presence required only in exceptional and justified cases. The proposal also implements a "once-only" principle, under which company information submitted during registration should be reused by competent authorities — such as those dealing with tax identification, VAT, social security or beneficial ownership — without the company having to file the same information again. In its explanatory material, the Commission further envisages first an EU-level interface and later a central EU register for EU Inc. companies.
The most consequential part of the proposal, however, lies in capital and share structure. EU Inc. would require no minimum capital; its shares would, as a rule, have no nominal value, unless the articles of association provide otherwise. Share transfers, moreover, would be capable of being completed and registered fully online. Most notably, Member States would not be allowed to impose additional formalities for the legal validity of a transfer, expressly including a notarial deed. These choices are of considerable systemic importance: the proposal is clearly intended to make the European corporate form more compatible with venture capital financing, rapid capital operations and the efficient circulation of equity interests.
The draft also introduces a dedicated Employee Stock Option framework. Under Article 79, income derived from warrants issued under the EU-ESO regime would generally not be deemed to accrue at grant, vesting or exercise, but only upon the disposal of the acquired shares. This is accompanied by simplified insolvency and winding-up mechanisms for innovative startups, intended to reduce procedural complexity, cost and duration. In that respect, the proposal reflects a broader conceptual move: company law is no longer treated merely as a law of incorporation or internal governance, but as a framework for the full lifecycle of an innovative business, including the possibility of restarting after failure.
From an academic and doctrinal standpoint, however, an important objection remains. EU Inc. undoubtedly creates a harmonised core, but it does not yet amount to a fully self-standing European company law regime. Article 4 of the draft expressly states that EU Inc. companies are governed by the Regulation and by their articles of association, but that matters not covered by either remain governed by the national law of the Member State of registration. That is the model's central point of tension: the form is European, yet a significant part of its legal operation remains tethered to domestic law. It is therefore unsurprising that recent scholarly commentary has already argued that the success of the "28th regime" will depend on the extent to which those national dependencies can be reduced and the European regulatory core made genuinely coherent and autonomous.
A further limitation is acknowledged by the Commission itself. The provisions touching on taxation and employee participation are expressly not intended to harmonise those fields as such. National labour law remains applicable, and the rules on employee participation are, in principle, linked to the Member State of registration. EU Inc. is therefore not, at least in its current form, a complete European corporate constitution. It is better understood as a highly ambitious company-law component within a wider integration project that remains unfinished.
EU Inc. is neither mere symbolism nor already a finished European equivalent of Delaware. Rather, it is the most serious attempt so far to recalibrate the company law architecture of the Single Market to the needs of innovative, digital and cross-border firms. Its strengths lie in standardisation, digitalisation and greater compatibility with growth finance; its weaknesses lie in the continuing dependence on national law. Whether it will become a genuinely attractive reference model for European incorporations will depend on the legislative process and, later, on practical uptake. Even now, however, one point is unmistakable: the quality of European company law has once again become a matter of European competitiveness.