A new type of EU company
On 18 March 2026, the European Commission published its proposal for a new pan-European, corporate legal framework (the EU Inc. Regulation). Aimed at innovative startups and scaleups, the EU Inc. Regulation will provide businesses with the option of quick, low-cost incorporation as an ‘EU Inc.’ in any EU Member State and in accordance with a single legal regime.
Evidence shows that EU innovative companies struggle to scale up and compete globally. The EU Inc. Regulation is designed to support and encourage EU innovation and entrepreneurship by making it easier for businesses to grow and expand across the bloc. Ultimately, it is hoped that this will have a chilling effect on the number of EU innovative companies, particularly tech companies, migrating to markets such as the US.
A simplified framework
EU Inc. will not replace national company frameworks – like the Societas Europaea, it is an optional EU company framework that will sit alongside national regimes. Businesses will be able to incorporate as an EU Inc. from the start, or to convert from an existing national company type to an EU Inc.
The EU Inc. Regulation aims to simplify the process from incorporation and registration, through to scale up and, if necessary, winding up. Key features of the EU Inc. include the following.
Fast, online incorporation: An EU Inc. company may be registered via an online central register (to be established) for a maximum fee of €100. Registration must be completed within 48 hours if the company has adopted standard articles of association (to be issued by the European Commission), and within five days where non-standard articles are used.
Legal form: An EU Inc. company will take the form of a private limited liability company with no minimum share capital requirements.
Reduced administrative burden: A “once-only” principle for the submission of information will be applied, meaning that, once filed via the central register, company information need not be resubmitted to other authorities (e.g. for tax and VAT numbers).
Digital-only administration: Member States will be required to ensure that all procedures within scope of the EU Inc. Regulation may be carried out exclusively, and fully, online.
One company, one market: A company registered as an EU Inc. will enjoy freedom of establishment and be recognised automatically in all Member States. The EU Inc. Regulation also includes a blacklist of prohibited national practices to ensure that EU Inc. companies are treated in the same way as other limited liability companies formed under EU Member State laws.
Governing law: An EU Inc. will still be incorporated in its chosen Member State and have its registered office in that jurisdiction. It will be primarily governed by the EU Inc. Regulation and its articles of association. National law will continue to apply for matters outside the scope of the EU Inc. Regulation, which include taxation, employment, and health and safety matters.
Admission to trading: An EU Inc. company may trade its shares on a multilateral trading facility and trading on an EU regulated market may be possible if it’s permitted under the laws of the Member State of incorporation.
Fast-track winding up: A solvent EU Inc. company will be able to benefit from a fast-track liquidation procedure provided that certain conditions are met. The EU Inc. Regulation also introduces simplified insolvency procedures for EU Inc. companies meeting the “innovative startups” criteria (discussed below).
Innovative enterprises, startups and scaleups
In addition to the EU Inc. Regulation, the European Commission has also adopted a Recommendation on the definitions of an innovative enterprise, innovative startup and innovative scaleup. While not legally binding, this instrument recommends applying harmonised definitions to certain types of businesses across the EU in order to improve the effectiveness and equity of innovation policy making and initiatives. The Recommendation introduces three new definitions:
Innovative enterprise: A company that either: (a) in at least one of the three preceding financial years, has incurred research and development costs representing at least 10% of its total operating costs or at least 5% of its total net sales; or (b) in the last three financial years, has or will soon develop a major innovation, which holds risks of market or technological failure.
Innovative startup: An innovative enterprise with less than 100 employees, operating for less than 10 years, and with an annual turnover of less than €10m.
Innovative scaleup: An innovative enterprise with an annual turnover of more than €10m that increased the number of its employees or revenues by 20% in the last two years. It also must employ less than 750 people or not be publicly listed.
Ongoing and future initiatives
Some commentators have argued that the EU Inc. Regulation does not go far enough. Some of these concerns are addressed in Communication: Towards a 28th Regime for EU companies, which covers the following:
The European Commission will continue its efforts to reduce administrative burdens, including achieving the maximum digitalisation of interactions between companies and public authorities (e.g. through the use of the European Business Wallet).
Member States are encouraged to consider setting up specialised courts to handle disputes on EU Inc. company law. One of the criticisms of the proposal is that it does not include plans to set up a specialised EU court, which would help ensure the uniform application of the EU Inc. Regulation.
The European Venture Capital Funds Regulation will be reviewed as part of measures to promote access to capital for start-ups and scale-ups.
As part of the upcoming Fair Labour Mobility Package, the European Commission will explore the possibility of allowing 100% cross-border telework for innovative start-ups and scale-ups across the EU.
The European Commission has proposed a Head Office Tax (HOT) system that would allow small and medium-sized enterprises to apply the tax rules of their home country.
Next steps
The EU Inc. Regulation is a good news story for the EU and for Ireland more specifically. For Irish companies looking to expand, it could significantly reduce administrative overhead by removing the need to navigate multiple incorporation processes. A single, harmonised corporate structure could also help sell Irish startups to international investors, such as US venture capitalists.
The EU Inc. Regulation must now go through the EU legislative process. The European Commission has pledged “to do its utmost to support the co-legislators with an objective to reach an agreement by the end of 2026”, which is an ambitious target. We’ll be watching developments with interest.
