European Commission Unveils EU Inc. Proposal to Simplify Business Across the Single Market

The European Commission has unveiled its proposal for EU Inc., a new unified corporate framework intended to serve as the foundation for the EU’s 28th company law regime. The initiative introduces an optional, digital-by-default European corporate structure aimed at making it easier for businesses to start, operate, and expand across the EU. According to the Commission, the proposal is designed to encourage companies to remain in Europe while attracting businesses that might have previously considered relocating elsewhere.

Currently, entrepreneurs and innovative firms must navigate a fragmented legal landscape with 27 national systems and more than 60 company forms, which can delay the creation of companies by weeks or months, increase costs, and discourage expansion. EU Inc. aims to address these challenges by offering a single harmonised framework, allowing companies to operate without managing multiple national regimes. The proposal builds on calls to improve competitiveness outlined in the Draghi Report and forms part of the Commission’s political guidelines for 2024 to 2029.

“Europe has the talent, the ideas and the ambition to become the best place for innovators,” said Ursula von der Leyen. “Yet today, European entrepreneurs who want to scale up face 27 legal systems and more than 60 national company forms,” she stated. “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.” Von der Leyen added, “This crucial step is just the beginning. Our goal is clear: one Europe, one market by 2028.”

The Commission has urged the European Parliament and the Council of the European Union to reach agreement on the proposal by the end of 2026. Under the framework, companies would benefit from faster registration, enabling incorporation within 48 hours at a cost of less than €100 and without minimum share capital requirements. Simplified administrative procedures would allow businesses to submit company information once through an EU-level interface linking national registers, followed by the creation of a central EU register. EU Inc. companies would also automatically receive tax identification and VAT numbers, eliminating the need to resubmit documentation and reducing administrative burdens.

Corporate processes would be fully digital throughout a company’s lifecycle, including digital liquidation procedures that enable founders to wind down operations quickly and cost-effectively. Simplified insolvency processes for innovative startups are also included, allowing entrepreneurs to test ideas and restart operations where necessary. Investment conditions would be improved through the removal of in-person formalities, digital financing procedures, and simplified share transfers without mandatory intermediaries. Member states would have the option to grant EU Inc. companies access to stock exchanges, enhancing capital-raising opportunities. Companies could also introduce employee stock option plans across the EU, with taxation applied only when income is realized upon sale.

The framework guarantees full access to the single market, enabling companies to choose their member state of incorporation while ensuring that national employment and social laws, co-determination rules, and corporate governance requirements remain fully applicable. Flexible share structures would allow different classes of shares with varying economic and voting rights.

Alongside the EU Inc. proposal, the Commission adopted a communication outlining further steps to complete the 28th regime, including enhanced digital interaction between businesses and public authorities through initiatives such as the European Business Wallet. The communication encourages member states to consider specialised judicial chambers or courts to handle disputes related to EU Inc. company law. The Commission is also exploring the possibility of 100 per cent cross-border telework for startups and scale-ups under a forthcoming Fair Labour Mobility Package. Additional measures include improving access to capital, building on initiatives such as the Savings and Investment Union, potential revisions to pension fund investment rules, and a review of European venture capital frameworks.

On taxation, the Commission proposed a Head Office Tax system allowing SMEs to apply the tax rules of their home country, as part of the Business in Europe Framework for Income Taxation initiative, which aims to establish a single legislative framework for corporate taxation across the EU. An upcoming Omnibus simplification package on direct taxation is expected to reduce administrative burdens for businesses. The Commission also adopted a recommendation defining innovative enterprises, startups, and scale-ups, designed to improve policy monitoring and provide clarity for investors and decision-makers.

The proposal will now be examined by the European Parliament and the Council, with the Commission aiming to support negotiations toward an agreement by the end of 2026. EU Inc. is positioned as a key part of the EU’s competitiveness agenda, supporting innovation and growth within the single market. It does not replace national company frameworks but offers an optional harmonised structure available across the EU. The initiative builds on the Competitiveness Compass presented in January 2025, aimed at restoring economic dynamism and boosting growth, and reflects calls from the European Council in March 2025 for the creation of a 28th company law regime to support innovative businesses.

By fLEXI tEAM