A new chapter in European company law
Against a backdrop of sustained political pressure to address Europe’s innovation and competitiveness gap, the European Commission has published its long-anticipated legislative proposal for an EU-wide corporate legal form, commonly referred to as “EU Inc”. The proposal forms the centrepiece of a new “28th regime” corporate legal framework, introducing a harmonised EU-wide company form aimed primarily at supporting startups and scaleups, while being open to all founders and companies across the Union.
Europe’s businesses are operating across 27 Member States, each with its own company law system, its own formation requirements, its own administrative procedures. The EU Inc proposal is framed explicitly as a competitiveness measure, responding to concerns raised in the Draghi and Letta reports that the fragmentation of national corporate rules holds back EU companies from scaling across borders and competing globally. The legal basis for the proposal is Article 114 TFEU, and the instrument of choice is a Regulation, ensuring a coherent, unified framework, with the legal form to be made available within each Member State’s legal order.
The Commission’s impact assessment identifies the core problem clearly: fragmented corporate rules and burdensome, often non-digital corporate rules and procedures throughout a company’s lifecycle, coupled with investor-entry and exit friction and difficulties offering competitive employee equity across member states. The solution proposed is not to replace national company forms, but to offer an optional, harmonised alternative that any eligible company can choose – a single coherent corporate rulebook that operates identically across all 27 Member States.
The Commission’s legislative proposal was published on 18 March 2026. To mark this, we have published a dedicated podcast as part of our EU Presidency initiative exploring the proposal in depth. The podcast is hosted by Susanne McMenamin, Corporate partner and head of Matheson’s Governance, Securities and Reporting Group, who discusses the mechanics, structure and commercial appeal of EU Inc with Dr Thomas B Courtney, author of The Law of Companies, former Chair of Ireland’s Company Law Review Group, and Special Advisor to EU Commissioner Michael McGrath on the 28th regime and the EU Inc proposal.
Key features of the proposal
Fast, low-cost incorporation: the 48-hour promise
A central feature of the proposal is fast-track incorporation: a 48-hour registration timeframe and a fee cap of €100 for straightforward incorporations using standard template articles. The podcast explores how digital identity verification, structured data, automated register checks and standardised templates could make rapid processing achievable in practice, and notes that the 48-hour and €100 fast-track is linked to using the standard template articles, with bespoke articles potentially extending the timeframe to up to five working days. Standard template articles will not only speed up incorporation where the template is used, but will also serve to create a level of uniformity across the EU for all EU Inc companies which has never before been achieved.
Digital-by-default across the corporate lifecycle
The episode emphasises that the proposal’s digital ambition extends well beyond formation. EU Inc is designed to be “digital-by-default” across the full corporate lifecycle, from incorporation through governance and filings to capital increases, share issuances and share transfers, with the removal of mandatory intermediary involvement, while preserving the ability to use intermediaries where a company chooses to do so. Article 10 of the draft Regulation sets a “digital-only” principle for all procedures within scope, permitting physical presence only on an exceptional and individually justified basis. Digital by default is not the ceiling – but it is the mandatory floor.
EU central interface built on BRIS
The podcast explains that EU Inc registration would flow through an EU central interface built on the existing Business Registers Interconnection System (BRIS), while preserving the national register as the authoritative source of company information and harmonising core rules across incorporation, governance and capital. For an EU Inc incorporated in Ireland, registration would be through the Companies Registration Office; the registered seat would generally determine the applicable law, administrative functions and the relevant supervisory and enforcement authority, while harmonised core rules would reduce the fragmentation that currently exists across Member States.
This is a pragmatic design choice: it leverages existing infrastructure and respects Member State competence over their registers, while still delivering a single point of entry for founders.
Once-only registration: tax, VAT, social security and beneficial ownership
Article 20 of the draft Regulation provides for automatic digital exchange from the business register to authorities issuing tax identification numbers and VAT numbers, social security authorities, and the beneficial ownership register – without the company being required to resubmit the same information – and provides that the company obtains its tax and VAT numbers digitally without a separate application, subject to limited exceptions for VAT-specific information. The Commission presents this “once-only” registration as one of the defining features of EU Inc. The podcast discusses the proposal’s ambition to join up currently siloed registrations – companies registration, tax, beneficial ownership and VAT – while recognising the practical systems-remediation challenge this involves and emphasising that meaningful lead-in time for Member States will be important.
Investor-friendly capital structure and governance flexibility
EU Inc is designed to be investor-friendly. In the podcast, Susanne and Tom discuss how the proposal permits multiple share classes with differentiated voting and economic rights, alongside a zero or one euro minimum capital, with creditor protection achieved through solvency tests and director liability rather than paid-in capital requirements. Preference shares, liquidation preferences, and anti-dilution protections will continue to be reflected in the EU Inc framework. The real advantage is that those structures could be applied consistently across Member States, reducing the need to adapt term sheets to different national company law regimes.
EU-wide employee stock options
One of the most practically significant features of the proposal for the startup ecosystem is the EU-wide Employee Stock Option (EU-ESO) framework, which would enable standardised employee equity options. The podcast acknowledges that employee share ownership is considered to be a key tool for attracting skilled workers. Currently, an Irish company with employees across several Member States which has an employee stock option scheme must negotiate multiple and often conflicting tax treatments across the EU. Article 79 of the proposed Regulation will standardise the timing of taxation of options, deferring taxation to the point of disposal rather than exercise, addressing the well-known “dry tax” problem under which employees face a tax charge when they exercise options but before they receive any cash proceeds. The podcast notes that while the timing of taxation is harmonised, tax rates and capital gains treatment remain jurisdiction-specific.
Fast-track solvent liquidation and simplified winding-up, employment rights and anti-money laundering safeguards
The podcast describes a fast-track digital liquidation process targeted at companies without significant assets or liabilities, designed to complete within approximately three months, conducted entirely electronically, with creditor and tax authority protections retained. Fast-track digital liquidation is primarily (though not exclusively) directed at solvent companies which wish to shut down. There are also proposals for the fast-tracking of the insolvent winding-up of EU Inc companies which come within the definition of innovative startups. This development will complement the 2026 insolvency harmonisation directive. While procedures may become faster and more accessible, the underlying protections for creditors and the core principles of insolvency law will continue to be anchored in national law.
On anti-money laundering (AML), the podcast discusses how founders and directors will authenticate their identity using recognised electronic identification tools in line with the eIDAS Regulation, with incorporation data transmitted to the relevant national register via BRIS. Member States will remain free to apply additional scrutiny where required, ensuring that digital incorporation does not weaken safeguards against fraud or misuse, though any such checks will remain subject to strict time and cost deadlines.
Practical takeaways and what to watch in negotiations ahead
The podcast concludes that EU Inc is more likely to strengthen Ireland’s proposition than dilute it. A founder or investor choosing Ireland would no longer be choosing between Ireland and Europe – they could more easily choose Ireland within Europe, and still operate through a more seamless cross-border company law framework.
The key risk is not technical complexity, it is political drift. Ireland’s Presidency of the EU must focus on four priorities: (1) protect the core architecture – optionality, digital by default, the removal of national barriers; (2) resolve the sensitive issues early – particularly employment safeguards and anti-abuse; (3) keep the scope disciplined – avoid expansion into unrelated areas; and (4) drive alignment with Parliament from the outset so that trilogues are realistic.
The Commission has set an objective of reaching political agreement by end of 2026. The podcast notes implementation would require additional time for implementing acts and the construction of technical infrastructure. In the Commission’s own framing, EU Inc is intended to be the starting point of a wider 28th regime: one designed to help startups, scaleups and innovative enterprises operate more seamlessly across borders and access funding more effectively within the single market. Whether it achieves that ambition will depend on what emerges from Council and Parliament negotiations, the quality of the implementing measures, and ultimately, the willingness of founders, investors and their advisers to adopt it. Time will tell whether Ireland positions itself as a leading jurisdiction of registration for EU Inc – given its English-language environment, common law tradition, modern Companies Act and established international business ecosystem, it has great potential to do so.
Matheson will be monitoring the legislative process closely. In the meantime, this podcast episode provides a practical starting point for any founder, investor or adviser seeking to understand what EU Inc is, what it could mean in practice, and how to think about it in the context of corporate structuring decisions being made today. For further information, please contact Susanne McMenamin or any member of Matheson’s Corporate team.