EU Inc and the 28th Regime: From Company Law Simplification to Capital Markets Infrastructure?

EU RegCORE Client Alert | Capital Markets Union + Savings and Investment Union

QuickTake

On 18 March 2026, the European Commission published a package of measures proposing EU Inc—an optional, European Union (EU)-wide harmonised corporate legal framework, the so-called 28th regime. The proposal (COM(2026) 321 final) takes the form of a directly applicable Regulation based on Article 114 Treaty on the Functioning of the European Union (TFEU) and allows companies to incorporate and operate under a single European company-law form across all 27 Member States. The initiative forms part of the Commission’s broader Competitiveness Compass, the Single Market Strategy, the EU “Startup and Scaleup Strategy” and the “One Europe, One Market Roadmap”.

As explored in this Client Alert specifically through the financial services lens, the proposal is not merely a matter for founders and company lawyers but also financial services firms that may engage with EU Inc as a potential new company form. EU Inc should be judged by whether it creates a more bankable, investable, transferable, supervisable and market-infrastructure-compatible European company form. It may affect the way European companies are financed, structured, diligenced, listed, lent to, invested in, pledged, transferred, restructured and supervised. The proposal therefore sits alongside and should be read together with, the Savings and Investments Union (SIU), capital markets integration, private-market liquidity, securitisation, listing and post-trade reform agendas.

EU Inc is a financing-architecture proposal, not just a company-law simplification

Europe’s difficulty is not a shortage of founders or ideas—the Commission’s impact assessment records overwhelming demand from the start-up and Small and Medium-sized Enterprise (SME) community, including over fifteen thousand signatures behind the original EU Inc campaign and 1,467 consultation responses, 96% of whose corporate respondents were SMEs.

The deeper problem, as the Draghi and Letta reportsSee coverage on the Draghi and Letta Reports available here.Show Footnote both concluded, is that 27 distinct national corporate-law systems generate legal uncertainty and transaction costs that discourage companies from scaling within the Single Market and push some toward incorporation outside the Union altogether. This is a financing-architecture problem as much as a company-law problem: a founder’s inability to answer “which law governs my share pledge, my convertible note or my insolvency filing” cheaply and reliably is precisely the kind of friction that raises the cost of capital.

The EU Inc proposal touches the whole chain from formation through seed/venture financing, bank lending, private credit, secondary transfers, Initial Public Offering (IPO)/listing and insolvency/restructuring. At present, the answer to whether EU Inc delivers on its financial-markets promise is partly, but not yet decisively. The current EU Inc proposal is thus promising but incomplete. It may reduce incorporation and governance friction, but its financial-markets impact will depend on whether the final regime delivers legal certainty on share transfers, investor-familiar governance, predictable insolvency treatment, compatibility with financial market infrastructure and regulatory recognition across the EU’s capital-markets and prudential architecture.

Key elements of the EU Inc proposal include:

• Who? Two distinct constituencies are affected. First, founders, start-ups, scale-ups, SMEs and growth companies seeking a standardised, low-cost, digitally native European company form—as well as their shareholders, employees (particularly for EU Stock Option Plans–ESOPs) and early-stage investors. Second, the financial services firms that service them: banks (venture debt, growth lending, acquisition finance), investment firms, asset managers (Venture Capital (VC), Private Equity (PE), European Long-Term Investment Funds (ELTIFs), European Venture Capital Funds (EuVECAs)), insurers (allocation and underwriting), payment firms, market infrastructure providers, custodians, Central Securities Depository (CSDs), fintechs, crypto-asset service providers, pension funds and their advisers, underwriters, arrangers and legal counsel.
• What? An optional EU-wide company form established by Regulation, with no minimum share capital, 48-hour digital registration for a maximum of EUR 100, dematerialised shares, flexible share classes (including multiple-voting rights), simplified digital share transfers, simple agreement for future equity (SAFE) and keep it simple security (convertible note) (KISS) compatibility, ESOPs and a pathway (via Member State option) to public-market admission. For founders and companies, EU Inc offers reduced incorporation friction and cross-border scalability. For financial services firms, the question is whether EU Inc creates a company form that is bankable, investable, transferable and supervisable at scale.
• Where? All 27 EU Member States. EU Inc companies would have free choice of incorporation Member State and automatic recognition across the Single Market. The regime does not depend on national transposition (it is a Regulation, not a Directive). For companies, this means a single European legal form operable anywhere in the Union. For financial services firms, this means a standardised counterparty, issuer or borrower profile—though for general insolvency proceedings, the applicable forum and law would ordinarily be determined through the centre of main interests (COMI) framework under Regulation (EU) 2015/848. The EU Inc’s Member State of registration would provide a rebuttable starting point for COMI but would not necessarily determine the jurisdiction or applicable insolvency law. Security and enforcement outcomes would also interact with national law.
• When? Published 18 March 2026. The proposal (2026/0074(COD)) is before the European Parliament (JURI Committee, rapporteur René Repasi MEP) and Council (Working Party on Company Law, meetings on 8 July, 23 July, 1 September and 10 September 2026). The Commission aims for political agreement by end-2026, monitored via the One Europe, One Market Roadmap. The Irish EU Presidency (July-December 2026) has prioritised SIU-related files.See our coverage available here.Show Footnote The window for substantive legislative engagement is now.
• How? EU Inc companies would acquire legal personality on registration in a national business register through a central EU interface built on Business Registers Interconnection System (BRIS), with harmonised bilingual templates, a 48-hour target deadline and EUR 100 cost ceiling. Digital share registers, online share transfers, digital capital increases and once-only data transmission reduce administrative friction. For founders, this streamlines formation, capital-raising and governance. For financial services firms, the question is how EU Inc interacts with existing diligence, documentation, custody, settlement and supervisory frameworks—firms should map exposure across their value chain.
• Why? Europe has 40,000+ VC-backed tech startups but only 331 unicorns versus 1,963 in the US. Divergent national company-law frameworks were identified by 85%+ of respondents as barriers to cross-border scaling. The proposal responds to the Draghi Report’s call for an “Innovative European Company”, the Letta Report’s “Simplified European Company” and repeated calls from business associations dating to the failed Societas Privata Europaea (SPE) proposal. For founders, EU Inc promises reduced fragmentation and lower transaction costs. For financial services firms, the question is not whether EU Inc simplifies formation (it does), but whether it creates a company form that financial markets can price, trade, pledge, settle and supervise at scale.

Key immediate considerations

1. The strongest immediate use case for EU Inc is for venture capital and growth equity
   
   Flexible share classes, digital share transfers, SAFE/KISS compatibility, simpler capital increases, more predictable ESOP treatment, lower cross-border syndication friction and cleaner cap tables address many legal-fragmentation costs that currently raise European VC/growth transaction costs. But if EU Inc remains too dependent on national law, it reduces incorporation friction without resolving the legal-fragmentation premium priced into European deals.
2. The bank lending and debt capital markets impact depends on predictability, not speed
   
   For lenders, underwriters and debt investors, EU Inc’s value lies not in 48-hour incorporation but in whether it creates a standardised borrower/issuer profile—standardised corporate authority, enforceable share pledges, predictable insolvency treatment, harmonised creditor remedies and efficient restructuring. Much of this terrain still interacts with national insolvency, secured-transactions and civil-procedure law and is not resolved by the current proposal.
3. Market infrastructure compatibility and digital-native design are the long-term opportunity
   
   The proposal opens a genuine path toward digitally native share registers, Distributed Ledger Technology (DLT)-based securities issuance, settlement-finality-compliant transfer mechanics, CSD interoperability, tokenised private-market shares, automated corporate actions and machine-readable cap tables. But the current framework is closer to digital administration than full market-infrastructure integration. Full compatibility with Central Securities Depositories Regulation (CSDR), the DLT Pilot Regime, eIDAS/European Digital Identity Wallet and the emerging European Business Wallet ecosystem will determine whether EU Inc becomes a regulated corporate-data-and-securities-infrastructure layer.
4. The live legislative question is ambition, not principle
   
   Mainstream business associations, investor associations and financial-market bodies broadly welcome the concept. The debate is whether the final text becomes a genuinely scalable European company form (a “Delaware-style” digital-first vehicle with a central register and standardised financing tools) or merely a harmonised label layered onto 27 national company-law substrates. Trade unions and labour-side stakeholders fear deregulatory arbitrage absent stronger employee-participation safeguards. The Commission aims for political agreement by end of 2026.
5. The file has moved from concept to legislative bargaining
   
   As of 12 July 2026, EU Inc is in the ordinary legislative procedure: tabled in Parliament under JURI (rapporteur René Repasi MEP), under technical scrutiny in the Council Working Party on Company Law and awaiting a European Economic and Social Committee (EESC) opinion. Co-legislators are working toward an end-2026 political agreement. For financial services firms, the near-term task is legislative monitoring and targeted advocacy—not implementation planning—because consequential questions (register centralisation, national-law fallback, insolvency and netting treatment, Anti-Money Laundering (AML) safeguards) remain open.