Brussels targets faster company creation, aiming to boost competitiveness

The European Commission recently presented its proposal for EU Inc., a new single set of corporate rules designed as the foundation of the EU’s 28th regime.

The initiative introduces an optional, digital by default European corporate framework aimed at making it easier for businesses to start, operate and grow across the EU.

The Commission said the proposal is intended to encourage companies to remain in Europe while also attracting those that had previously considered relocating elsewhere.

Currently, entrepreneurs and innovative firms face a fragmented corporate legal landscape, with 27 national legal systems and more than 60 company legal forms across the bloc.

This complexity can delay the establishment of companies for weeks or months, increasing costs and discouraging business expansion.

EU Inc. seeks to address these challenges by offering a single harmonised regulatory framework, allowing companies to operate without navigating multiple national regimes.

The proposal builds on calls to improve competitiveness, including those outlined in the Draghi Report, and forms part of the Commission’s political guidelines for 2024 to 2029.

“Europe has the talent, the ideas and the ambition to become the best place for innovators,” said President of the European Commission Ursula von der Leyen.

“Yet today, European entrepreneurs who want to scale up face 27 legal systems and more than 60 national company forms,” she stated.

“With EU Inc., we are making it drastically easier to start and grow a business all across Europe,” she continued.

“Any entrepreneur will be able to create a company within 48 hours, from anywhere in the European Union, and fully online,” she explained.

“This crucial step is just the beginning,” von der Leyen said.

“Our goal is clear one Europe one market by 2028,” she added.

The Commission has urged the European Parliament and the Council to reach agreement on the proposal by the end of 2026.

Under the proposal, companies would benefit from faster registration processes, enabling them to be established within 48 hours at a cost of less than €100 and without minimum share capital requirements.

The framework would introduce simplified administrative procedures, allowing businesses to submit company information once through an EU level interface linking national registers, followed by the creation of a central EU register.

EU Inc. companies would also receive tax identification and VAT numbers without resubmitting documentation, reducing administrative burdens.

Corporate processes would be fully digital throughout a company’s lifecycle, reinforcing efficiency and accessibility.

The proposal includes digital liquidation procedures, enabling founders to wind down operations more quickly and cost effectively.

It also offers simplified insolvency procedures for innovative startups, allowing entrepreneurs to test ideas and restart where necessary.

Measures to improve investment conditions include removal of in person formalities, digital financing procedures, and simplified share transfers without mandatory intermediaries.

Member states would also have the option to grant EU Inc. companies access to stock exchanges, enhancing capital raising opportunities.

The framework would allow companies to introduce employee stock option plans across the EU, with taxation applied only when income is realised upon sale.

The proposal further guarantees full access to the single market, enabling companies to choose their member state of incorporation.

Safeguards are included to ensure national employment and social laws remain fully applicable, alongside rules on co-determination and corporate governance.

EU Inc. companies would also benefit from flexible share structures, allowing different classes of shares with varying economic and voting rights.

Alongside the proposal, the Commission adopted a communication outlining further steps to complete the 28th regime, including enhanced digital interaction between businesses and public authorities through initiatives such as the European Business Wallet.

The communication also encourages member states to consider specialised judicial chambers or courts to handle disputes related to EU Inc. company law.

The Commission is exploring the possibility of 100 per cent cross border telework for startups and scale ups under a forthcoming Fair Labour Mobility Package.

Additional measures include improving access to capital, building on initiatives such as the Savings and Investment Union, potential revisions to pension fund investment rules, and a review of European venture capital frameworks.

On taxation, the Commission has proposed a Head Office Tax system, allowing small and medium sized enterprises to apply the tax rules of their home country.

The Business in Europe Framework for Income Taxation initiative aims to establish a single legislative framework for corporate taxation across the EU.

An upcoming Omnibus simplification package on direct taxation is also expected to reduce administrative burdens for businesses.

The Commission further adopted a recommendation defining innovative enterprises, startups and scale ups, aimed at improving policy monitoring and providing clarity for investors and decision makers.

The proposal will now be examined by the European Parliament and the Council, with the Commission aiming to support negotiations towards an agreement by the end of 2026.

EU Inc. forms a key part of the EU’s competitiveness agenda, supporting innovation and growth within the single market.

It does not replace national company frameworks but instead provides an optional harmonised structure available across the EU.

The initiative builds on the Competitiveness Compass presented in January 2025, which aims to restore economic dynamism and boost growth.

It also reflects calls from the European Council in March 2025 for the creation of a 28th company law regime to support innovative businesses.