Europe has finally taken a meaningful step towards a 28th regime – but not yet the 28th regime Europe actually needs. The European Commission’s new “EU Inc.” proposal improves how companies are formed, financed, and structured across borders – and it does so in a way that is more ambitious than many had expected. But if Europe’s goal is to unlock productivity, competitiveness, and true cross-border scaling, this initiative should be seen not as the endpoint, but as the foundation for a broader and more powerful model of legal integration.
In that sense, EU Inc. is both welcome and instructive: it shows what is possible – and what still remains to be done.
The proposal itself deserves credit. It goes well beyond a narrow “startup vehicle” and introduces a European corporate legal form open to a wide range of firms. It simplifies incorporation, enables digital registration, facilitates cross-border structures, and streamlines core corporate functions such as capital increases, share transfers, and employee stock ownership. These are tangible improvements that reduce administrative burdens, lower legal complexity, and make Europe a more predictable environment for investors and entrepreneurs.
The proposal’s ambition becomes clearer when looking at its operational provisions:
Source: European Commission (2026). Regulation of the European Parliament and of the Council on the 28th regime corporate legal framework (‘EU Inc.’).
For individual firms that rely on cross-border capital, scalable governance structures, and equity-based growth models, these changes can be significant. These firms struggle with fragmented corporate frameworks that complicate investment and ownership structures. EU Inc. directly addresses these frictions and, in doing so, strengthens one of the key building blocks of a more integrated Single Market.
At the same time, the proposal is deliberately focused – and it is precisely this focus that defines its substantive limits.
Despite being framed as a “28th regime”, EU Inc. remains primarily a company law instrument. It simplifies the legal shell of the firm, but leaves largely untouched the broader horizontal policies that shape how businesses operate across borders. Taxation remains fragmented. Labour law continues to differ across Member States. Insolvency regimes, licensing requirements, reporting obligations, and sector-specific regulations all remain largely national.
As a result, EU Inc. simplifies the legal shell of the firm – but not yet the full environment in which the firm operates.
This distinction is critical for assessing its economic impact – which, while positive, has in the past been overstated by the Commission, the Parliament, Member States, and parts of Europe’s startup and business community.
The proposal will deliver real but bounded gains. It reduces transaction costs, improves access to finance, and lowers barriers to cross-border corporate structuring. These are meaningful contributions to Europe’s competitiveness. But they are not, on their own, sufficient to transform Europe’s poor productivity performance.
The most binding constraints on scaling in Europe lie in the cumulative effect of fragmented rules across labour markets, taxation, social security systems, and regulatory compliance. These deeper frictions remain largely untouched.
The benefits are therefore likely to be unevenly distributed and, at the macroeconomic level, very limited. Venture-backed firms, scaleups, and companies operating across borders with complex ownership structures are likely to gain the most. For most SMEs, most service providers, and most firms in regulated sectors, the main barriers to growth lie elsewhere. For them, EU Inc. may offer a cleaner corporate wrapper, but not yet a decisive change in their ability to scale across Europe.
Seen in this light, EU Inc. is best understood as a first pillar of a broader 28th regime.
The next step is to extend this logic beyond company law. One useful reference point is the United States’ Universal Commercial Code (UCC), which provides a common framework for key areas of commercial activity across states. The UCC is relatively focused in scope, but it has been highly effective in aligning the rules that govern contracts, sales, and secured transactions, while preserving state-level sovereignty through adoption and implementation.
For Europe, the opportunity is even greater.
Rather than replicating the UCC narrowly, European policymakers – not necessarily the European Commission – could build on the EU Inc. approach to develop a broader set of optional, common frameworks covering core domains of economic activity, including contract law, insolvency, and secured lending, with extensions into areas such as labour mobility (labour market regulation) and all elements of taxation and tax coordination.
These “universal” frameworks could be designed at a supra-federal level – drawing on the logic of the Uniform Commercial Code in the United States, where a central drafting body develops harmonised legal standards that are subsequently adopted by individual states – while also allowing firms to opt into them for cross-border operations. Over time, this hybrid approach could foster a more coherent, predictable, and scalable legal environment in the areas that matter most for business.
This is not a marginal institutional tweak – it would represent a fundamentally different pathway to European integration.
Such an approach would combine two advantages:
- It would respect national sovereignty, avoiding the political constraints of full harmonisation under the current institutional framework of the European Union.
- At the same time, it would progressively align the rules that shape business activity across large parts of the Single Market – from business formation and financing to hiring, contracting, and restructuring. This is precisely where the largest gains in productivity and competitiveness can be unlocked – and where today’s fragmentation often requires not only translators for 24 official languages, but also armies of legal and tax advisers.
The EU Inc. proposal suggests that this model is politically and technically feasible – but whether Europe can actually deliver such frameworks will ultimately depend on the political process and the extent to which the proposal survives dilution.
And this also raises an institutional question that Europe can no longer avoid.
If the ambition is to achieve deeper Single Market integration in core economic domains, Europe may need to complement the Commission’s role with stronger, more focused lawmaking capacity dedicated specifically to horizontal market integration.
This could take the form of a more competitive institutional dynamic – where proposals for optional, business-facing legal frameworks are developed with greater speed, clarity, and a sharper focus on economic impact. In practice, this would mean equipping the EU with a much more effective engine for designing and advancing integration where it matters most for firms operating across borders – not unlike the role played by the Uniform Law Commission in the United States.
But this also places a clear responsibility on the current political process.
The EU Inc. proposal should not be diluted to the point where its economic value is undermined. If that happens, Member States should be prepared to reject a weakened version. Conversely, those Member States that recognise its potential should move ahead – by embedding the framework in national law and cooperating with like-minded partners to establish the transnational mechanisms needed to make the regime work in practice.
Europe does not lack ideas. However, under its current governance framework for legal integration, the EU often lacks the institutional machinery – and the political discipline – to translate them into coherent, universal, and scalable frameworks.
EU Inc. is therefore an important step forward. The challenge now is to preserve its ambition, build on it, and extend its logic to other horizontal domains – by broadening its scope, deepening integration, and strengthening the institutional capacity to deliver a truly unified market for European business.
Europe does not lack companies. It lacks scale. The next phase of reform must aim to change that.