The 28th Regime: A New EU-Wide Legal Framework for Companies

What the 28th Regime means

The European Union is built on 27 national legal systems, one for each member state. A company today is always a creature of national law: a German GmbH, a French SARL, an Estonian OÜ, an Irish LTD. The 28th Regime proposes a 28th option that sits on top of those 27, a harmonised company form that a founder can choose in a member state. National rules still govern matters outside its scope.

Two things make it different from a normal reform. It is optional: founders who prefer a national entity keep it, and nothing is forced on existing companies. And it is additive: it adds a legal form alongside existing ones. EU rules would harmonise covered matters; national rules would still apply to others.

"EU Inc" is the popular name for this idea. The 28th Regime is the legal mechanism that would make EU Inc real. For the wider picture, start with our overview of EU Inc.

Where the 28th Regime came from

The concept of a 28th regime has circulated in Brussels for years, but it gained real momentum in 2024. Two influential reports put it firmly on the agenda:

• Enrico Letta's report on the Single Market, "Much more than a market" (April 2024), argued that fragmentation across 27 legal systems holds European companies back, and floated a common European legal status.
• Mario Draghi's report on European competitiveness (September 2024) went further, explicitly recommending a 28th regime so innovative companies can scale across the EU without re-incorporating country by country.

In parallel, a founder-led campaign, the EU Inc initiative, gathered tens of thousands of signatures calling for exactly this. European Commission President Ursula von der Leyen picked up the thread in her political guidelines, and the Commission's EU Startup and Scaleup Strategy (May 2025) committed to bringing a proposal forward. The draft regulation followed on 18 March 2026.

What the 28th Regime would change

The March Commission proposal describes a company that is digital by default. The following are proposed features, not settled rules. Council and Parliament drafting can change them. The headline features founders care about:

• One online incorporation, valid EU-wide. Register once through a single EU-level digital interface and operate in all 27 member states, instead of forming a new entity in each country.
• Fast and cheap setup. The target is formation in around 48 hours for at most €100 when you use the EU standard templates (five working days without them), with identity verified through eIDAS and a once-only data principle.
• No minimum capital. You would not lock up any capital to incorporate. Instead of a capital buffer, every distribution must pass a balance-sheet and a 12-month solvency test, and modern instruments like SAFEs and convertibles are explicitly allowed.
• Startup-ready shares and governance. A fully digital share register, multiple voting rights that member states cannot prohibit, and a codified business judgment rule for directors.
• One proposed optional employee stock option (EU-ESO) framework, so a startup can grant options across countries under one structure, with tax deferred until the shares are sold.
• A proposed digital second chance. The Commission included simplified liquidation and winding-up provisions. Insolvency treatment is disputed and should not be assumed to survive in the final text.

Because it is proposed as an EU Regulation (not a Directive), the adopted rules would apply directly. National law would still govern matters left outside the harmonised provisions. The Commission based it on Article 114 TFEU, the internal-market article, which lets the Council decide by qualified majority rather than the unanimity older EU company forms required. That legal-basis choice is deliberate, and genuinely contested: some legal scholars argue a different basis is needed, especially for anything touching tax.

One detail matters for founders: under Article 4, anything the Regulation does not cover is filled by the national company law each member state designates as the EU Inc's foundation (a German EU Inc would sit on GmbH law, for example). So the label is uniform across all 27 states, even though the underlying law is not identical.

Who the 28th Regime is for

The proposal is aimed at innovative, cross-border companies: startups that raise from investors in several countries, remote-first teams, and founders who sell across the EU from day one. It is deliberately reachable by non-EU founders too, since the whole point is a single digital entity. Under Article 42(2), at least one director would need to be resident in the EU. See the rules for non-EU founders.

You would not need to be a large company to use it. The no-minimum-capital, low-cost, fully digital design is the opposite of the EU's existing cross-border vehicle, which is exactly why that older option never reached startups.

How it differs from the Societas Europaea (SE)

The EU has had a pan-European company since 2004: the Societas Europaea (SE). In practice it never reached founders, because it was built for large corporates. The Commission's own proposal says the SE needs €120,000 of capital, "making it not appropriate to newly created startups." The 28th Regime is designed to fix precisely the things that kept the SE out of reach.

Where the SE harmonised the holding company, the 28th Regime aims to harmonise the starting line.

Status, and what happens next

The 28th Regime is not law yet. The Commission's proposal (COM(2026) 321), presented by Commissioner Michael McGrath on 18 March 2026, follows the EU's ordinary legislative procedure. The European Parliament, where René Repasi is the lead rapporteur, and the Council of the EU must agree on a final text. Political agreement by the end of 2026 remains a target. The Council mandate proposes general application at the end of the 21st month after entry into force. The Commission proposed 12 months. The final timetable is not agreed.

We track every step on the EU Inc timeline and post developments as they happen in EU Inc news.

The Council agreed its position on 23 October. As checked on 24 October 2026, Parliament is awaiting a committee decision. Read what changed in the Council position and the application timetable.

Primary sources

• European Commission: EU Inc, a new harmonised corporate legal regime, the official hub with the proposal, annex and factsheet.
• European Commission news: EU Inc, making business easier in the European Union (18 March 2026).