The European Union is on the cusp of a major reform in company law. In January 2026, European Commission President Ursula von der Leyen announced plans for a new “28th regime” — often dubbed EU Inc. — at the World Economic Forum in Davos. This optional, EU-wide legal framework would operate alongside the existing 27 national company laws, creating a unified rulebook for businesses operating across borders.
The initiative addresses a long-standing barrier in the EU’s single market: the fragmentation of company laws across member states. Currently, startups and scale-ups face high administrative costs and legal complexities when expanding beyond their home country. Compliance with multiple national rules can deter investment and slow growth, prompting many European companies to relocate to more unified jurisdictions like the US state of Delaware.
What Is the 28th Regime?
The 28th regime would introduce a supranational company form, primarily for private limited liability companies — the most common structure for startups. Key features include:
- Fully harmonized rules on incorporation, governance, shareholder rights, and digital registration (potentially within 48 hours via a single EU portal).
- Optional adoption: Companies could choose this framework instead of a national one, without replacing existing laws.
- Scope limitations: Taxation, labor law, insolvency, and worker protections would remain under national jurisdiction to avoid controversy.
Inspired by earlier reports from Enrico Letta and Mario Draghi, the regime aims to make Europe more attractive for innovation. The European Parliament supported the concept in a January 2026 resolution, calling for fast-tracked digital tools and safeguards for employee rights.
Benefits for Businesses and the Economy
Proponents argue this single rulebook would slash costs, speed up scaling, and attract venture capital. European startups often struggle compared to US counterparts due to regulatory hurdles.
A unified framework could help retain talent and investment within Europe, fostering more “unicorns” and boosting overall competitiveness. Features like employee stock options and simplified cross-border operations would particularly benefit tech and innovative firms.
Current Status and Challenges
As of February 2026, the European Commission is preparing a formal legislative proposal, expected in Q1 2026. Adoption could allow the first companies to register under the new regime by 2027.
However, the plan faces criticism. Labor groups and some MEPs worry it could indirectly undermine worker protections or co-determination rights if companies opt for the EU form to bypass stricter national rules. Balancing simplification with social standards remains a key debate.
Looking Ahead
If successful, the 28th regime could mark a significant step toward a truly integrated EU capital market. By reducing barriers, it promises faster growth, lower costs, and a more vibrant startup ecosystem — helping Europe compete globally in innovation.