EU Inc.: What are the key elements of the proposal?

With the aim of promoting innovation and reducing bureaucratic hurdles, the European Commission published a proposal in March 2026 for a regulation on a new European company framework – ‘EU Inc.’, also known as the 28th regime. This legal form would exist alongside national company forms and would be available to any business, regardless of sector, size or age. The proposal follows a ‘digital by default’ approach. It would be possible to set up a company digitally within 48 hours from anywhere in the EU – i.e. including other Member States – for less than 100 euros, without any share capital. Moreover, EU Inc. companies would need to submit their data only once through a central EU-level repository.

Concerns about restrictions on co-determination rights and ‘regime shopping’

At a rally on 24 September at the Schuman roundabout outside the European Commission, the trade unions voiced their anger at the proposal. ETUC General Secretary Esther Lynch summed up the trade unions’ criticism of EU-Inc. as follows: ‘“Fix it or sink it”. The loopholes in the EU Inc policy are so big they could be seen from space and they will be easily exploited by bad bosses unless proper legal safeguards are included.’ Experts reached similar conclusions at the discussion event organised by the European Trade Union Institute (ETUI) on 11 September. They scrutinised the European Commission’s proposal in detail. Aline Hoffmann, Head of the Unit for the Europeanisation of Industrial Relations at the ETUI, explains that company law cannot be clearly separated from labour law. The EU Inc. Regulation, which was presented as a measure to promote the economy and the single market, directly interferes with individual and collective workers’ rights. ETUI Senior Researcher Marcus Meyer-Erdmann criticises the fact that the proposal opens the floodgates to ‘regime shopping’. EU Inc. companies could, for example, move their registered offices to Member States with more favourable corporate regimes to bypass comprehensive worker co-determination rules. According to Séverine Picard, Chief Executive Director of Progressive Policies, this provision would make it easier for companies to relocate at the expense of employees.

Increased risks arising from employee stock option plans and a controversial legal basis

Miloš Vlaisavljević, Policy Officer at the European Federation of Public Service Unions (EPSU) explains that the planned introduction of employee stock option plans for staff at EU-Inc. increases the risk of wage dumping, compounded by stock options. Companies could abusively reduce wages below the statutory minimum wage or the amounts negotiated in collective agreements. Furthermore, employees holding such stocks would have virtually no say in matters and would be exposed to significant risk due to a lack of information. Isabelle Schömann, Deputy General Secretary of the ETUC Executive Committee, believes that multinational companies in particular would benefit from the unlimited scope of EU Inc. Originally, the EU Inc. was intended to promote start-ups and scale-ups, but this is not reflected in the proposal. She also criticises the fact that the proposed regulation is based on Article 114 of the Treaty on the Functioning of the European Union (TFEU). This article is intended to apply to EU regulations aimed at harmonising national law and promoting the functioning of the single market. However, because EU Inc. would create a company form operating alongside national laws, it is not permissible under Article 114.

AK is also highly critical of the proposed EU Inc.

The European Commission’s proposal has significant shortcomings regarding the protection of workers’ interests and fair competition. For example, it allows for non-transparent ownership structures, which facilitate the establishment of shell companies and increase the risk of money laundering. Without adequate due diligence thresholds for limited companies, it is creditors, workers and the public sector who will have to bear the economic consequences of insolvencies and the abusive establishment of companies. Furthermore, this would also enable companies to circumvent employees’ participation rights through ‘legal’ means. What is presented as a major coup for modern European company law turns out, on closer inspection, to be a social step backwards and would lead to EU-wide competition to achieve the lowest standards.

What happens next? Negotiations are in full swing

Since the European Commission published its proposal on 18 March 2026, the Council and the European Parliament have been working on it at a rapid pace. In May, the Competitiveness Council welcomed the proposal on ‘EU Inc.’ by a majority and reaffirmed its commitment to reaching a final agreement by the end of 2026. Opinions have now been issued by the European Committee of the Regions and the European Economic and Social Committee. Several European Parliament committees too have already issued their views. On 10 September, the EMPL Committee, which is responsible for employment and social affairs, issued a relatively critical opinion. It warns against using EU Inc. to circumvent national labour law, workers’ co-determination and collective bargaining systems. EU Inc. should focus primarily on strengthening start-ups rather than serving as an alternative legal form for all businesses. Council working groups are currently meeting. The European Parliament could hold its first reading in October, with trilogue negotiations following in November.

Further information

ETUC: Unions protest over 'EU Inc' threat to workers' rights
ETUI: Innovation or Evasion? How the 28th Regime ‘EU Inc.’ undermines collective rights and shifts corporate risk on to workers
AK EUROPA: EU Inc. puts pressure on workers’ rights
AK EUROPA: Company law: A common 28th regime at EU level carries the risk of undermining important protection standards
Corporate Europe Observatory: EU Inc: A corporate master plan to attack our rights
EU Commission: Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on THE 28TH REGIME CORPORATE LEGAL FRAMEWORK - 'EU INC.'