On 18 March 2026, the European Commission presented its proposal for EU Inc., a new harmonised corporate legal framework intended to “make it easier for businesses to start, operate, and grow across the EU”.[1] The proposal is part of a broader political agenda to strengthen EU competitiveness and reduce the administrative complexity that currently characterises cross-border business activity within the EU Single Market.
This article explains what the current system looks like, what EU Inc. proposes to change, and what the key legal and practical implications are for (equine) businesses operating or considering operating across EU borders.
The Current Landscape: 27 Systems, No Single Standard
Today, any company seeking to expand across EU borders must contend with 27 different national legal systems and more than 60 distinct company legal forms.[2] This fragmentation means that incorporating in a new member state typically involves separate registration processes, different documentation requirements, multiple tax identification numbers, and, in many cases, the involvement of local lawyers, notaries, and translators.
The result is a process that can take weeks or even months, raising costs and slowing growth. Particularly for startups and scale-ups seeking rapid expansion the high costs and extensive paperwork can be deterrent. For investors, the patchwork of jurisdiction-specific corporate structures adds layers of due diligence and uncertainty, making European companies comparatively less attractive than their counterparts in more uniform markets.[3]
This fragmentation is not new. The EU has previously attempted to create pan-European corporate solutions including the Societas Europaea (2004), the European Private Company (2010), and the Single-Member Company (2014) but each initiative fell short due to administrative complexity and a lack of political agreement among member states.[4]
The issue was brought back into sharp focus in 2024, when Mario Draghi’s report on European competitiveness warned that overregulation and market fragmentation were materially undermining the EU’s economic standing relative to the United States and China.[5] In response, the European Commission’s Competitiveness Compass, published in January 2025, identified EU Inc. as a central deliverable.[6]
What Is EU Inc.?
EU Inc. is an optional, digital-by-default European corporate framework, proposed in the form of a regulation under Article 114 of the Treaty on the Functioning of the European Union.[7]
Article 114 TFEU empowers the EU legislature (primarily the European Parliament and the Council of the European Union) to adopt measures that harmonise national laws where necessary for the establishment and functioning of the internal market. It is the EU’s main legal basis for removing regulatory divergences that hinder cross-border trade or risk creating future barriers.
It is also considered the “cornerstone and starting point of the EU’s 28th regime”[8] which was addressed in Enrico Letta’s report in 2024. The objective of the 28th regime was to improve the EU’s single market by removing the previously mentioned fragmentation and creating a special framework.[9] This is what EU Inc. aims to do as it does not replace existing national company frameworks but instead adds a 28th option allowing founders and businesses to incorporate under a single, harmonised set of EU-wide rules rather than choosing one of the existing national forms.[10]
The proposal originated partly from the EU-INC civil society campaign, led by startup founders, venture capitalists, and investors, who lobbied for a pan-European legal entity alongside a centralised business registry and standardised investment documents.[11] Their core argument was that European startups, unlike their US counterparts, face structural disadvantages when trying to raise capital and scale internationally due to the absence of a single recognised corporate form.
Key Features of the EU Inc. Proposal
The Commission’s proposal includes the following principal elements:[12]
Rapid digital incorporation
An EU Inc. company can be registered within 48 hours, entirely online, for less than €100, with no minimum share capital requirement. Founders submit their company information once via an EU-level interface connecting national business registers. In a subsequent phase, the Commission plans to establish a new central EU register.
Fully digital lifecycle
All corporate processes (from incorporation through to liquidation) will be digital by default. This includes financing operations and share transfers, removing the need for in-person formalities and mandatory intermediaries.
Simplified insolvency procedures
Innovative startups will have access to streamlined insolvency procedures to facilitate winding down, enabling founders to restart more quickly. General liquidation procedures will also be fully digital.
Alongside the proposal, the Commission has adopted a Recommendation establishing common definitions of innovative enterprises, innovative start-ups, and innovative scale-ups for use across EU policy. A company qualifies as an innovative enterprise if, in at least one of the three preceding financial years, its research and development expenditure amounted to at least 10% of its total operating costs or at least 5% of its total net sales. A company may also qualify if it has developed, is developing, or will in the foreseeable future develop products, services, or business processes that are new or substantially improved compared to the state of the art in its industry and that carry a risk of technological or industrial failure. An innovative start-up is an autonomous innovative enterprise that has been operating for fewer than ten years, employs fewer than 100 persons, and whose annual turnover or balance sheet total does not exceed €10 million. An innovative scale-up must exceed the €10 million turnover or balance sheet threshold, must have achieved an average annualised increase in headcount or revenues of more than 20% over the two preceding years, and must satisfy at least one of the following: it employs fewer than 750 persons, or it is not publicly listed.[13]
EU-wide employee stock option plans
EU Inc. companies will be able to offer harmonised stock option plans to employees regardless of where they are located in the EU. Importantly, stock options will be taxed only at the point of sale, not at the time of grant, a provision seen as particularly significant for talent attraction in capital-constrained startups.[14]
Free choice of incorporation state
Companies will be free to choose the member state in which they incorporate, with a blacklist of prohibited practices to ensure that EU Inc. companies are treated equivalently to companies incorporated under national law.[15]
Flexible share structures
EU Inc. companies may create different classes of shares with varying economic or voting rights, offering, for example, protection against hostile takeovers.[16]
Access to capital markets
Member states may allow EU Inc. companies access to stock exchanges, with simplified procedures for financing operations.[17]
What EU Inc. Does Not Change
It is important to note the boundaries of the proposal. National employment and social laws are not affected.[18] The proposal expressly preserves the application of national employment and social law. An EU Inc. company will be subject to the same employment obligations and worker protection rules as any domestically incorporated company in its member state of registration. This includes co-determination arrangements and employee representation rights at board level, which remain governed exclusively by the law of the member state in which the company is registered.[19]
Taxation similarly remains national. Companies will continue to pay taxes in the jurisdictions where they operate.[20] The Commission has proposed complementary measures in this area – including the Head Office Tax (HOT) system for SMEs and the BEFIT initiative for corporate taxation – but these are separate from the EU Inc. framework itself.[21]
Legal and Procedural Considerations of EU Inc.
Legislative form
The Commission has opted for a regulation rather than a directive. A regulation is directly applicable in all member states without the need for national implementing legislation, which supports greater uniformity. The use of Article 114 TFEU means that the proposal requires only a qualified majority in the Council, rather than unanimity – a deliberate choice to avoid the deadlocks that undermined earlier initiatives.[22]
Court structure
The Communication accompanying the proposal calls on member states to consider establishing specialised judicial chambers or courts with jurisdiction to handle EU Inc. company law disputes, with the aim of ensuring consistent and effective application of the rules.[23] Startup associations have expressed a preference for a centralised European court, arguing that reliance on national courts risks undermining the standardisation the proposal sets out to achieve.[24]
Parliamentary scrutiny
The proposal now passes to the European Parliament and the Council. The Commission hopes that an agreement can be reached by the end of 2026.[25] The Parliament had already adopted a broad-based report on the 28th regime prior to the Commission’s formal proposal, signalling political support.[26] However, the Parliament’s rapporteur has indicated that elements are missing from the current proposal, including asset lock provisions to prevent hostile acquisitions, and stronger protections for creditors and employee board participation.[27]
Timeline
If legislative agreement is reached by end 2026, the first EU Inc. companies could be incorporated in 2027 or 2028.[28]
Relevance for International Operations and Cross-Border Equine Business
EU Inc. is primarily aimed at innovative startups and scale-ups, but the framework is available to all companies. Its implications extend to internationally active sectors such as the equine industry, where businesses frequently operate across multiple EU member states for breeding, training, sales, and competition.[29]
For businesses that currently maintain separate legal entities, contracts, and compliance structures in multiple member states, the EU Inc. framework offers a potential simplification of corporate architecture.
For investors, the standardisation of corporate form and investment documentation is expected to reduce due diligence costs and make European companies more legible to international capital. For employees, a harmonised stock option regime addresses one of the more practical barriers to talent mobility across borders.[30]
Conclusion
EU Inc. represents the most significant attempt in over two decades to create a genuinely unified corporate legal framework for the European Union. If enacted as proposed, it will offer international operations and equine businesses an alternative to the current system of fragmented national regimes: a single, digitally accessible, and comparatively low-cost way to incorporate and operate across all EU member states.
The proposal is still at an early legislative stage, and its final shape will be determined through negotiations between the Commission, the Parliament, and the Council over the course of 2026. Businesses and investors with a stake in EU market access should monitor developments closely.
For specific advice on how EU Inc. may affect your corporate structure or cross-border equine operations, please contact Schelstraete Equine Law.
FAQ – EU Inc. Explained
What is EU Inc.?
EU Inc. is a proposed EU-wide corporate legal framework that allows businesses to incorporate and operate across all EU member states under a single, harmonised set of rules. It is designed to simplify cross-border business and reduce administrative burdens.
Is EU Inc. mandatory for companies in the EU?
No, EU Inc. is optional. It will exist alongside national company structures as an additional “28th regime,” meaning businesses can choose whether to adopt it or continue using national legal forms.
How quickly can a company be set up under EU Inc.?
The proposal aims to allow companies to be incorporated within 48 hours through a fully digital process, with minimal cost and no minimum share capital requirement.
Does EU Inc. replace national company laws?
No, EU Inc. does not replace national frameworks. It complements them by offering a unified alternative for companies that want to operate more easily across borders.
How does EU Inc. affect taxation?
EU Inc. does not harmonise corporate taxation. Companies will still be taxed according to the national tax laws of the countries in which they operate.
When will EU Inc. come into effect?
If adopted, the first EU Inc. companies could be established as early as 2027 or 2028, depending on the legislative process.
How will EU Inc. impact cross-border equine businesses?
EU Inc. can simplify corporate structures for equine businesses operating across multiple EU countries by reducing the need for multiple entities, streamlining compliance, and facilitating investment and talent mobility.
Disclaimer
This article serves as an introduction to the subject matter addressed and is provided solely for general informational purposes. It does not constitute legal advice, nor does it establish an attorney-client relationship between the reader and our firm. No rights may be derived from the contents of this article.
Although every effort has been made to ensure accuracy, no warranty is given as to the completeness or currency of the information presented. The law is subject to change, and its application will vary depending on the specific circumstances of each situation.
Readers should not act or refrain from acting on the basis of this article without first seeking specific legal advice tailored to their situation. Our firm excludes all liability for any loss or damage arising from reliance on the information contained herein, to the fullest extent permitted by applicable Dutch law.
For legal advice specific to your situation, please contact our office at info@schelstraete.com.
This article is written by: Lara Schönherr; Luc Schelstraete; Piotr Wawrzyniak
Sources
[1] European Commission. (2026, March 18). Commission presents proposal for EU Inc. – unlocking the full potential of the Single Market for Europe’s entrepreneurs. European Commission. https://ec.europa.eu/commission/presscorner/detail/en/ip_26_614
[2] Directorate-General for Communication. (2026, March 18). EU Inc. – making business easier in the European Union. European Commission. https://commission.europa.eu/news-and-media/news/eu-inc-making-business-easier-european-union-2026-03-18_en
[3] Batista Cabanas, L., & Heinz, E. (2026, February 24). What is EU-INC and its plan to make European businesses borderless? Euronews. https://www.euronews.com/my-europe/2026/02/03/what-is-eu-inc-and-its-plan-to-make-european-businesses-borderless
[4] Ibid
[5] Ibid
[6] European Commission. (2026, March 18), supra note 1.
[7] Greenacre, M. (2026, March 18). Commission pitches ‘game changing’ EU-wide company regime. Science|Business. https://sciencebusiness.net/news/start-ups/commission-pitches-game-changing-eu-wide-company-regime
[8] European Commission. (2026, March 18), supra note 1.
[9] Évroux, C. & Hallak, I. (2025, December). The 28th regime. European Parliamentary Research Service (ERPS). https://www.europarl.europa.eu/RegData/etudes/BRIE/2025/779233/EPRS_BRI(2025)779233_EN.pdf
[10] European Commission. (2026, March 18), supra note 1.
[11] EU-INC. (n.d.). EU-INC – One Europe. One Standard. – Pan-European legal entity. EU-INC. https://www.eu-inc.org
[12] European Commission. (2026, March 18), supra note 1.
[13] European Commission. (2026, March 18). Commission Recommendation of 18.3.2026 on the definition of innovative enterprises, innovative startups and innovative scaleups. https://research-and-innovation.ec.europa.eu/document/download/4e3cd140-47ed-4de2-be02-af1f344a2990_en
[14] Greenacre, M. (2026, March 18), supra note 7.
[15] European Commission. (2026, March 18), supra note 1.
[16] Ibid
[17] Ibid
[18] Ibid
[19] Ibid
[20] Firm24. (2026, February 17). EU Inc is bevestigd. Wat betekent dit voor ondernemers? Firm24. https://www.firm24.com/blog/eu-inc-is-bevestigd/
[21] Batista Cabanas, L., & Heinz, E. (2026, February 24), supra note 3.
[22] Greenacre, M. (2026, March 18), supra note 7.
[23] Directorate-General for Communication. (2026, March 18). EU Inc. – making business easier in the European Union. European Commission. https://commission.europa.eu/news-and-media/news/eu-inc-making-business-easier-european-union-2026-03-18_en
[24] Greenacre, M. (2026, March 18), supra note 7.
[25] European Commission. (2026, March 18), supra note 1.
[26] Batista Cabanas, L., & Heinz, E. (2026, February 24), supra note 3.
[27] Greenacre, M. (2026, March 18), supra note 7.
[28] Firm24. (2026, February 17), supra note 20.
[29] Directorate-General for Communication. (2026, March 18), supra note 23.
[30] Batista Cabanas, L., & Heinz, E. (2026, February 24), supra note 3.
