Introduction

 
 
 

In a context characterised by the coexistence of 27 national corporate systems with heterogeneous disciplines, regulatory fragmentation is now a legal and structural obstacle. New companies that want to open up and consolidate within a market have to face in most cases regulatory barriers to the entry of those same markets in which they want to operate. As a result, they have negative spill-over effects that directly affect the ability of companies to operate efficiently and effectively. The International Monetary Fund (IMF) reported that these barriers to services within the European Union are comparable to a hidden duty of 110%, while for goods they reach 45%, compared with 15% in the United States.[1]These non-tariff barriers are caused by a lack of harmonisation of company law rules. The problem lies in the application of EU law at national level and in the incompleteness or divergence of e-government solutions.

 
 
 

The European Union has reacted by proposing a 28th corporate law regime which represents a systematic response to the need to overcome the existing regulatory barrier by introducing a legal framework that will have to complement national models.

 

 

A New European Corporate Form: EU Inc.

 
 
 

In recent times, there is more than ever the need to find a tool to boost continental competitiveness, seeking an innovative legal framework: the aim is to develop a new corporate structure that is truly European. This is a long-term goal pursued by several experts in the sector. The former presidents of the Council Enrico Letta and Mario Draghi have addressed the issue in two reports aimed at relaunching European competitiveness. Enrico Letta expressed herself in his reportMuch more than a marketpublished in April 2024 on the future of the single market, requiring the introduction of an optional European legal framework for businesses. In September of that year, the report by Draghi was published (The future of European competitiveness),which explicitly recalled the 28th scheme, with the aim of harmonising company law and making the European market more ambitious.

 
 
 

This is how the idea of theEU Inc.The 28th regime contains a new, unique set of corporate rules, which is an optional European form, the rules of which will be applied seamlessly throughout the European Union. The system will be digital by definition and will help companies to circumvent the complexity of national regulations. It will seek to strengthen the European technological ecosystem, to overcome bureaucratic barriers to flexibility and slow down corporate operations. The need for this solution had begun to become apparent, in order to prevent companies from being opened outside the EU, hampered by rigid national laws.

 
 
 

The President of the European Commission Ursula von der Leyen in presenting the new form EU Inc. has highlighted that European entrepreneurs still need to focus on 27 legal systems and over 60 different national corporate forms." Consequently, most of European talent and ambitions are taking refuge in more flexible corporate systems that facilitate the expansion of businesses. EU Inc. aims to bring a great change on the European scene, facilitating the growth of a company in Europe.

 

 

Key Points of the Draft Regulation

 
 

On 18 March this year 107 articles were published with a minimum content of the articles of association annexed to the proposal for a Regulation COM (2026) 321 final. This draft regulation provides for a new form of limited liability company, valid for all eligible undertakings. Initially, entry filters were provided, limiting the applicability of this scheme depending on the type of undertaking, but now they have been completely eliminated. Indeed, all companies formed by one or more natural or legal persons are subject to this new European corporate framework: that is, all companies regardless of how they have been formed, if from zero, through conversion, merger or division. This form of legislation would not radically replace the 27 national systems, but would be complementary to them as an additional option. The Regulation contains clear and equal principles for all countries that must adopt them without modifying them. As a regulation and not a directive, it should not be adapted to the national regulatory environment.

 
 
 

There are several elements in the proposal that go alongside the discipline provided by the individual 27 corporate systems including a faster registration: the establishment of the company, as anticipated in Ursula von der Leyen's speech, will be guaranteed in less than 48 hours and at a lower cost of 100 euros. The procedures will be consecutively simplified, in fact, it will be sufficient to transmit the information of the enterprises only once through a single interface at European level. It is expected the development of a new European central register that will assign a tax identification number and a VAT number to the enterprises without it is necessary to submit the relative documentation again. Indeed, it will be simpler and faster to share with the own enterprise, subjecting itself also to lower costs. The operations will become entirely digital, thus adopting a much more technological and systematic approach, except for exceptional cases where there will be to be investigations in presence (in a registered office in one of the 27 States).Business Registers Interconnection System)[2], i.e. an infrastructure that allows the automatic search for information on enterprises. This system was established by Directive BRIS 2012/17/EU, codified within Directive 2017/1132. Active since 8 June 2017 this infrastructure has tried to link the registers of companies of the Member States of the European Union. The objective was to create the conditions to promote the full realization of the freedoms of establishment and enterprise. The system pursues, in fact, the principle of the "infrastructure" of the European Union.once-only, i.e. as reiterated, according to which the data will be entered only once.

 
 
 

A further facilitation that will be promoted through the adoption of the 28th regime is that of more favourable conditions to attract investment: the transfer of shares will be simplified and will not be necessary to involve intermediaries. The aim is to create stock option plans for employees valid throughout the EU that will be taxed only once, or on the income generated at the time of sale. Therefore this will allow greater flexibility in the shares, creating different classes of shares with various economic and voting rights to protect their business from hostile acquisitions.European Employee Stock Option)[3]The Commission's initiative in March 2026 consists of deferred taxation, i.e. only when the shares are sold and not when the shares are exercised or allocated, avoiding taxes on income not realised (dry tax). EU-ESO warrants provide for a so-called minimum period ofdressingIn summary, employees have financial instruments (defined as "the "new" instruments) available to them.warrant) which gives them the right, but not the obligation, to purchase shares of the company at a pre-defined price (s.a.strike price, operating price) after a certain period of preservation. Employees thus have this title, and not the actual shares, which can be exercised within the ripening time, at the penalty of forfeiture of the right - i.e. warrants lose completely value.Employee Stock Options)are very similar to warrants, differ from the latter as they are expected to be pure incentives for employees or managers. For this reason they are considered more as clauses of employment contracts (or incentive plans). The great economic revolution of the system consists in the fact that taxation takes place when the income is realized and not when you become holders of the ESO/warrant, or at the time of exercise. Overall according to preliminary estimates in Brussels the reform could generate significant savings for the companies, estimated in hundreds of millions of euros in ten years.

 
 
 

Among other things, since this regulation is very broad, there are several issues that are addressed, including the use of Business Wallet (i.e. the virtual portfolio of corporate identity to preserve documents, certifications, etc.), the organisation of the company, the composition of the boards of directors and the quorums of the shareholders' meetings.

 
 
 

It must be clarified that the Regulation will also apply to foreign entities operating in a Member State: according to Article 54.1 of the Regulation.[4]the Treaty on the Functioning of the European Union (TFEU) must be treated in the same way as natural persons who are nationals of Member States.

 

 

Inspiration from the C-Corp State-owned Delaware

 
 
 

LupinEU Inc. is a system that is based on the structure of the US Delaware C-Corp. The companies of the so-called Delaware order are companies with a structure of C - Corporation which have chosen to form themselves according to the laws of the State of Delaware. Basically, all US companies are initially designated automatically as C Corporations, or receive this default tax classification, except in special cases where they have submitted specific registration forms or requests. This structure is known for its fiscal flexibility and the ease with which it is possible to operate in the United States. It offers an extremely simplified regulatory regime and considerable protection for shareholders and owners who can refer to corporate courts. It is aimed at companies of all sizes and the ratio of corporate regulations are oriented in a favourable way to the autonomy of the protagonism of the management company. Among other things, there are different benefits that follow from this operation, such as the level of privacy that is provided, since it is not necessary to list in the documents of constitution the names of the members of the board of directors. Above all, there is no tax on the state corporate income for the companies that have formed themselves in the State of Delaware but that do not carry out their activity there. In the European corporate scene the risk is that the most promising companies are faced with aDelaware fliporUS flip. In other words, they register as a subsidiary of an American holding company (parent company) in Delaware to access regulatory simplifications and a more mature financing market, while operating in the European context. This phenomenon involves a significant loss of talent, capital and fiscal capacity for the Union. It is estimated that about 30% of the so-called European unicorns have thus transferred their headquarters to the United States in the last 15 years.

 

 

 

 

Points from Clarity That Turns out Little Convincing

 
 

But, as usual, there are points that only partially work. One that partially convinces the public scene[5]This is the idea that this system may not be a genuine new European regime but rather a fragmentation of the applicable law. Article 4 of Regulation (EC) No. 2026) 321 final provides that matters not covered by the regulation or by the company statute remain governed by the national law of the Member State of registration. This is another unconvincing element, namely the lack of an ad hoc European court dealing with matters relating solely to the 28th regime: the market had requested the establishment of a European commercial court. The proposal merely recommends that States set up specialised courts, which increases the risk of divergent interpretations of the same rules, legal uncertainties which could discourage investors. Companies could face conflicts between the rules of the 28th regime and those of the 27 different administrative and bureaucratic systems. According to Article 11 of the Italian Constitution, it is envisaged that Community law rules should be taken directly on Italian territory, while remaining outside the internal source system. Antinomy cases should be solved individually by the common court which may subsequently raise a question of constitutionality. The Court of Justice of the European Union has stated that the national court responsible for applying Community rules has an obligation to ensure full effectiveness, disapplied where appropriate any conflicting provisions of national law.

 
 
 

In conclusion, it is worth mentioning the so-called "curse of the previousSocietas Europaea, a minority within the European market. Companies with a registered office within the EU may form as SEs which operate through their own bodies and operate in at least two EU countries.

 

 

♪ The Best is Enemy of the Good ♪

 
 
 

In the light of the criticisms made above, however, we cannot fail to welcome the proposal put forward by the European Commission. In conclusion, taking up the words usually attributed to Voltaire, the 28th regime represents a first but significant step in responding to the structural inefficiencies of the European market and a concrete opportunity to harmonise a company law that is too heterogeneous to serve the economic development needs of the Union.

 
 
 

[1]As reported in the reportEuropes Choice: Policies for Growth and Resiliencepublished on 16 December 2024 by the Director of the European Department at the IMF Alfred Kammer.

 

[2]See Articles 21 and 22 of Regulation (EC) No 321/2004

 

[3]See Articles 57 and 58 of Regulation (EC) No. 2026/2006

 

[4]Article 54 (1) of the Treaty on the Functioning of the European Union (TFEU) is a fundamental rule extending the right of establishment, provided for in Article 49 TFEU for natural persons, including legal persons. The provisions apply to companies having their governing bodies or their head office in a Member State.

 

[5]Martin Sandbu wrote in a report in the Financial Times•EU Inc • is a missed opportunity for start-ups, published on March 22, 2026, a list of critical points of the 28th regime, analysing possible doubts and indeterminateness.