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The European Commission recently presented its proposal for a new legal form: the EU Inc. An optional, digital-by-default European corporate framework, offering a new single set of corporate rules. The proposed measures are especially relevant for start-up and scale-up companies that would otherwise not yet be ready to deal with the (legal) complexities in the European market.
Our experts discuss why the EU Inc. is a welcome addition to the European corporate toolbox, and how it may incentivise businesses to remain in (or move to) the European Union.
Fragmented corporate law poses operational challenges for businesses
One of the challenges entrepreneurs in the European Union face, is the fragmentation of corporate law. Individual member states maintain different legal forms, requirements and procedures and there is no centralised uniformity. And although businesses within the European Union enjoy a high level of (economic) freedom, when it comes to cross-border business, this legal complexity is often experienced as a hurdle, hindering growth.
The EU Inc. as an attractive accelerator
Strengthening the EU’s competitiveness by offering an easily accessible, harmonised legal form is one of the main goals of this initiative. Although start-ups and scale-ups and businesses in the tech-sector are the primary focus, the optional corporate form would be open to all companies. This should make it easier for businesses to start, operate and grow across the EU.
The European Commission hopes that the new framework will support the ambitions of companies in the EU, attract new companies from outside the Union, and even convince companies that had previously relocated elsewhere to return.
Faster, simpler and easier: key points of the EU Inc.
The EU Inc framework offers a single set of rules at EU level, governing matters such as incorporation, corporate governance, and disclosure requirements. This is all aimed at simplifying access to - and flexibility on - the Single Market. Key features of the EU Inc. proposal include:
Faster and simpler registration. An EU Inc. company can be founded within 48 hours, for less than € 100. There is no minimum share capital requirement;
Company information need only be submitted once through an EU-level interface, and fully digital operations are envisioned throughout the company's lifecycle;
A simplified liquidation procedures, enabling founders to test out innovative ideas and (re)start again with less hassle;
Removal of in-person formalities, with digital procedures for financing operations, better conditions for attracting investment, and simplified share transfer methods including the option to access the stock exchange;
Full access to the single market, as the choice of EU country of incorporation is contingent on fewer (legal) considerations, by freely choosing the EU country in which they incorporate;
Better safeguards against abuse, as national employment and social laws are not affected by the proposal. The applicable safeguards of the EU country of registration will apply to the EU Inc. company in full;
EU templates for standard articles of association. Also, articles of association will be required in two languages: English, and the language of the state of registration.
Political agreement yet to be reached on the EU Inc.
The proposal was published by the European Commission on 18 March 2026. It has yet to be discussed by the Council of the European Union and the European Parliament. It is hoped that this process will lead to political agreement on the matter before the end of this year. Depending on the timing, the proposal may enter into force as soon as 2027.
However, the negotiations may lead to changes to the current proposal, before a common final text is agreed upon. If you have any questions about the legislative process surrounding the EU Inc. Please reach out to the international tax advisors at Baker Tilly. Together with our Legal Advisory, Employment Advisory and Corporate Finance colleagues, we would be happy to discuss the opportunities this proposal offers.
The legislation and regulations in this area may be subject to change. We recommend that you discuss the potential impact of this with your Baker Tilly advisor.
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