EU Inc.: What Companies Need to Know Now!
A New European Corporate Form for Businesses Operating Across the EU Internal Market?
On 18 March 2026, the European Commission presented a proposal to introduce “EU Inc.” as part of a so-called “28th regime.” The aim is to further harmonise the legal framework for businesses within the EU internal market and to make cross-border operations easier, particularly for start-ups, SMEs, and internationally growing businesses.
Why the European Commission Wants to Introduce EU Inc.
At present, companies operating in more than one EU Member State are faced with a wide range of national rules and requirements. This applies in particular to company law, insolvency law, employment law, and tax law. In practice, this often results in multiple registrations, parallel administrative structures, and increased organisational and financial burdens.
With EU Inc., the European Commission aims to establish a new legal framework that would allow businesses operating across borders to use a more uniform and more digital corporate structure within the European Union.
What Is EU Inc.?
EU Inc. is the proposed new European corporate form intended to simplify the organisation of businesses carrying out cross-border activities within the EU. The concept forms part of a 28th regime, meaning an additional European legal framework alongside existing national corporate forms.
The objective is therefore not to replace national systems altogether, but to create an additional option for companies that operate or plan to expand across borders within the European Union.
What Does the Proposal Provide For?
According to the current proposal, EU Inc. is intended to include the following key elements:
Fully Digital Incorporation
An EU Inc. should be capable of being incorporated entirely online within 48 hours, at low cost and without minimum capital requirements.
Once-Only Principle
Company data should only need to be submitted once. On that basis, relevant identification numbers, including tax registrations, would be assigned automatically.
Harmonised Rules Throughout the Corporate Lifecycle
The proposal envisages uniform rules from incorporation to dissolution. This includes simplified digital insolvency procedures and standardised models for employee participation schemes.
Access to EU Tax Instruments
EU Inc. is also intended to be linked to existing EU tax initiatives, including the Head Office Tax (HOT) system for small and medium-sized enterprises and BEFIT.
Will National Tax, Employment and Social Security Rules Still Apply?
Yes. Based on the European Commission’s current position, national rules in the areas of employment law, social security law and tax law would remain in place. In those areas, the law of the Member State in which the EU Inc. is registered would continue to apply in principle.
This means that even if the corporate law framework were to become more harmonised, national requirements relating to taxation, social security and employee protection would still remain highly relevant.
What Could EU Inc. Mean for Businesses?
For companies operating across borders, EU Inc. could potentially lead to a significant reduction in administrative complexity. Instead of setting up and maintaining separate legal structures in several Member States, businesses may in future be able to rely on a more unified corporate form.
This could be particularly relevant for growth-oriented businesses, start-ups and internationally active corporate groups. At the same time, it will remain essential to review and comply with national tax and social security requirements on a country-by-country basis.
What Is the Current Legislative Status?
The proposal is currently part of the European legislative process. Based on the current timeline, an agreement between the European Parliament and the Council is being sought by the end of 2026.
It therefore remains to be seen whether EU Inc. will ultimately be adopted and what its final structure will look like. Even at this stage, however, the topic may already be of strategic relevance for internationally active businesses.
Conclusion
With EU Inc., the European Commission is seeking to make company formation and cross-border business activity within the European Union simpler, more digital and more efficient. For businesses, the proposal could create new opportunities in terms of structuring, expansion and administrative simplification.
At the same time, the final legislative outcome and the precise interaction with national tax, employment and social security rules will need to be monitored closely.
If you have further questions, our accountants will be happy to provide you with personal advisory. Additionally, we are available to advise you throughout France and Germany by phone and video conference. Your Franco-German tax consultancy FRADECO.
Disclaimer
Although the greatest possible care has been taken in the preparation of this newsletter, we reserve the right to make changes, errors, and omissions. The abstract legal presentation in this newsletter is no substitute for individual civil and tax law advice on a case-by-case basis. Subsequent changes to the legal framework, the views of the German or French tax authorities or case law, including with retrospective effect, are possible.
