Executive takeaway
EU-Inc (the “28th regime”) is an optional, EU-wide company-law framework designed to reduce the fixed coordination costs of scaling a startup across 27 national systems. On 20 January 2026, Commission President Ursula von der Leyen publicly confirmed the initiative and branded it “EU Inc”, framed as a single set of rules that applies seamlessly across the Union. If delivered as a fully digital, uniform regime (ideally via an EU Regulation), EU-Inc could make EU-wide incorporation and expansion materially simpler. But it will not solve Europe’s scale-up gap alone, because key constraints (tax treatment of equity, labour rules, late-stage capital depth, exit markets) sit largely outside company law.
The Question EU-Inc Is Trying to Answer
Europe increasingly frames its startup challenge as conversion and retention: the EU can create startups, but struggles to scale them into large companies that grow and remain in Europe. Evidence points to a persistent late-stage gap: EU venture investment has been around 0.03% of GDP vs 0.19% in the US, and EU scale-ups have raised ~50% less cumulative capital than US peers by year 10. [1]
Financing is only half the story. The other structural constraint is operational: the Single Market still behaves like 27 separate legal and administrative environments for high-growth companies. Founders expanding across borders repeatedly face duplicated work (incorporation procedures, documentation formats, inconsistent e-government services, and uneven recognition of “foreign” documents). This is not always a hard blocker, but it slows execution when speed matters.
Fragmentation is measurable. A 2025 Parliament analysis notes cross-border expansion remains costly and inefficient, with an EIB survey finding 28% of EU startups dedicate ≥10% of staff to regulatory tasks. Basic startup fundamentals remain uneven across Europe: only 33% of countries enable one-day incorporation, 57% allow incorporation for under €100, and just 48% accept incorporation documents issued in another EU Member State as valid proof for business registration. [2][3]
Companies already adapt to this fragmentation in practice. Cross-border reorganisations (including mergers, conversions, and seat transfers) are heavily concentrated in a small number of legal hubs: between 2000 and 2023, 17,559 cross-border corporate mobility transactions were recorded, with Luxembourg (~29%), Germany (~25%), and the Netherlands (~20%) together accounting for roughly three-quarters of the total. This concentration indicates that legal environments differ materially across jurisdictions, and firms respond accordingly. [4]
All of this sets up the practical question driving EU-Inc: Can the EU create a single, EU-wide corporate pathway that reduces the repeated fixed work of building a multi-country company and scaling?
Where Policy Stands in January 2026
EU-Inc is now on a concrete institutional track. In May 2025, the Commission committed to proposing an optional EU-wide company-law framework in 2026. On 20 January 2026, Commission President Ursula von der Leyen confirmed that the Commission will soon put forward the 28th regime, branded as “EU Inc”, as a single and simple set of rules intended to apply seamlessly across the EU. [5][6]
The same week, the European Parliament adopted formal recommendations for the Commission’s proposal (492 for, 144 against, 28 abstentions), calling for a “Unified European Company (S.EU)” with fully digital registration in 48 hours, €1 minimum paid-in capital, and a Commission-operated uniform multilingual portal accessible across Member States. [7]
The key design uncertainty is the legal instrument:
- A Regulation would apply directly and uniformly EU-wide (higher chance of consistency).
- A Directive would require transposition into national law (higher risk of uneven implementation).
This choice will heavily determine whether EU-Inc becomes a widely adopted default, or another EU form that exists in principle but underdelivers in practice. The next section explores what a strong EU-Inc could change in practice, and where its limits are.
EU-Inc in Practice: What It Can Change, and What It Cannot
EU-Inc is best understood as an optional EU-level company-law regime designed to reduce the corporate and administrative friction of scaling across multiple Member States. It targets the company-law layer (incorporation, governance, corporate mobility), not the broader regulatory landscape. This means that it can meaningfully simplify how a startup is formed and operated across borders, but it will not unify taxation, labour rules, licensing, or enforcement across 27 national systems.
Faster, more predictable incorporation and baseline governance
EU-Inc could make incorporation less of a strategic jurisdiction choice and more of a standardized entry point into the Single Market. In practice, it could:
· Standardise core corporate building blocks investors and founders rely on and reduce legal duplication across countries by enabling term sheets and governance assumptions to be more consistent regardless of where the company is registered.
· Support digital-first incorporation by default, raising the baseline in countries where the process remains slow or notary-dependent.
The practical impact will depend heavily on execution: a uniform statute will not deliver meaningful gains if the process still runs through 27 registries with uneven speed, document requirements, and administrative friction points.
Easier seat transfer and corporate mobility
While the EU already provides a framework for cross-border reorganisations through the Mobility Directive, these transactions often remain costly and procedural. EU-Inc could make mobility simpler by allowing startups to move their registered office within the EU without changing legal identity, reducing the need for complex conversions or merger-based workarounds. This would remove a significant corporate-law burden when companies expand or relocate.
That said, corporate mobility does not eliminate the operational realities of moving: changes in tax residence, labour compliance, and sector permits would still apply when activities relocate.
Practical usability through digital delivery
The real impact of EU-Inc will depend less on the statute itself than on whether it is delivered through a consistent digital system. Previous EU-wide forms (such as the SE or SCE) saw limited uptake among startups because they were complex and relied heavily on national procedures. EU-Inc will only be adopted at scale if registries and document recognition work smoothly across borders, and if routine actions (updates, branch registration, filings) can be done without repeated local legal friction. Parliament explicitly proposes a Commission-operated uniform digital multilingual portal to support seamless operation and investor-facing transparency across Member States. [7]
Streamlined cross-border fundraising and due diligence
By standardizing the corporate structure, EU-Inc could reduce cross-border due diligence costs and make EU startups more legible to international investors. This is relevant given the prevalence of foreign lead investors in European scale-up rounds (82% of €500M+ valuation deals had a foreign lead). However, EU-Inc does not solve Europe’s structural scale-up financing gap. That gap depends on fund sizes, institutional capital allocation, and exit markets, not on company law alone.
Employee equity
EU-Inc could make employee equity easier to administer by standardising the legal instrument and improving cross-border consistency in plan design. But it cannot harmonise the tax treatment of stock options, which remains largely national and politically difficult to unify at EU level.
Bottom line: EU-Inc can reduce the cost and complexity when startups scale across borders and make incorporation, governance, and mobility more predictable. However, it cannot by itself harmonise the tax, labour, insolvency, or enforcement systems that still shape how companies operate across 27 Member States.
What to watch in 2026
To assess early whether EU-Inc is on track to deliver meaningful impact, observers should focus on a small set of clear indicators in both the legislation and its implementation.
· Instrument: Did the Commission choose a regulation (stronger, uniform application) or directive (more room for national variation)? This sets the tone.
· Harmonisation vs. Delegation: Review the proposal closely. Are the core rules set directly at EU level, or does the text rely heavily on clauses allowing Member States to deviate? A high number of matters deferred to national law would weaken consistency.
· Portability: Is there a clear, easy process for seat transfer in the law? If it is missing or overly complex, that signals limited practical value.
· Digital Infrastructure: Does the proposal require fully digital registration within 48 hours and establish a Commission-operated uniform multilingual portal usable across Member States (not just 27 separate registries with uneven execution)?
· Eligibility: Are there eligibility criteria to use EU-Inc? If yes, are they simple (e.g. just an SME definition) or complicated? Complexity here means less adoption and fewer users. Does the proposal include a €1 minimum paid-in capital (Parliament’s benchmark), or a higher threshold that weakens usability?
· Employee equity: Does the law include something on stock options/ESOPs at least in company law terms? It’s not a deal-breaker if absent but including it shows ambition and responsiveness to startup needs.
EU-Inc is not a full solution to Europe’s scale-up gap, but it targets a clear, measurable obstacle: the fixed legal and administrative cost of operating across 27 systems. If it is genuinely simpler than the best national options, digital-first, and implemented consistently, it can remove meaningful friction from incorporation, cross-border expansion, and corporate mobility. This would make it easier for high-growth startups to scale within Europe without duplicating structures market by market.
Its success will ultimately be judged by adoption and real-world usability. EU-Inc can make cross-border operations faster and more predictable, but it will not replace the need for deeper capital-market reforms or resolve national differences in taxation and labour law. The key question is whether it becomes a practical default for startups and investors or remains a niche option with limited impact.
References:
- European Investment Bank (2024). “The scale-up gap: Financial market constraints holding back innovative firms in the European Union.” (June 2024, EIB Thematic Study) – see especially pp. 21–25 for data on VC investment as % of GDP, capital raised by EU vs US scale-ups (50% gap at 10 years), and statistics on foreign investors and acquisitions. Available here. [1]
- European Startup Nations Alliance (ESNA) (2024). “Laying the Foundation for Europe’s Startup and Scaleup Strategy” (Compendium, 2024) – includes Startup Nations Standards (SNS) 2023 Report data on one-day company creation (33% of countries), sub-€100 cost (57%), cross-border document acceptance (48%), and stock option regime implementation (57%). Available here. [2]
- European Parliament Policy Department C (JURI Committee) (2025). “Identification of hurdles that companies, especially innovative start-ups, face in the EU justifying the need for a 28th Regime” (In-depth Analysis, PE 775.947, July 2025). Available here. [3]
- Shweta Kad (2025). “EU-Inc: A Move Towards a Pan-European Regulatory Framework for Europe’s Startups” (Bachelor’s Thesis, Metropolia UAS, April 2025) – an empirical and legal analysis highlighting persistent fragmentation. Available here. [4]
- European Commission (2025). “EU Startup and Scale-up Strategy – Choose Europe to Start and Scale” (Staff Working Document & Communication, May 2025). Available here. [5]
- EU-Inc / LinkedIn (20 Jan 2026). Transcript of von der Leyen announcing the Commission will “soon put forward” the 28th regime, branded “EU Inc”, as a single set of rules applying seamlessly across the Union. Available here. [6]
- European Parliament (20 Jan 2026). “EU competitiveness: MEPs propose new legal framework for innovative companies” (press release; vote results + S.EU details incl. €1 capital, 48h registration, multilingual portal, ESOP/stock options). Available here. [7]