EU Inc (the 28th regime) · 2026/0074(COD)
Supports the EU Inc. proposal as a necessary step to reduce fragmentation for startups and scaleups but wants to preserve core features and address structural risks to ensure it is practical and enforceable.
Allow any startup or scale-up to opt into the 28th regime, enabling seamless cross-border operations and mutual recognition of company actions and documents across all Member States.
“Operating as a 28th regime company should feel like operating in a single country, even when team members, customers, or regulators are spread across Europe. The regime should guarantee mutual recognition of company actions and documents – for instance, a board resolution or shareholder meeting minutes from a 28th regime company should be accepted in all Member States without additional legalisation or translation requirements.”
One Company, One Market_ Delivering a True 28th Regime for Europe’s Startups.pdf, page 7
Maintain the 48-hour incorporation timeline and €100 cost cap with binding timelines for tax and VAT registration to ensure companies are operational quickly.
“The 48-hour incorporation timeline and €100 cost cap are central to the proposal and must be maintained. To ensure this is effective in practice: tax identification (TIN) and VAT registration must be compatible with the 48-hour timeline; these processes should be subject to binding timelines, not best-efforts clauses; a maximum timeline (e.g. 5 working days from registration) should be introduced.”
EU-Inc_Key-Recommendations_AFS_ESN.pdf, page 2
Ensure EU Inc. supports freedom of establishment allowing separation of registered offices, headquarters, operations, and teams across Member States without linking incorporation to a single place of operations.
“EU Inc. should fully support the freedom of establishment within the Single Market, including the possibility to separate registered offices, headquarters, operational presence, and teams across different Member States.”
EU-Inc_Key-Recommendations_AFS_ESN.pdf, page 2
Keep a fully digital lifecycle for incorporation, operation, and closure, limiting exceptions like notarial involvement so they do not delay timelines or increase costs.
“A fully digital lifecycle should remain the standard across incorporation, operation, and closure. Exceptions under Article 14, including notarial involvement, should only be permitted where they: do not delay the 48-hour timeline; do not increase costs beyond the €100 cap.”
EU-Inc_Key-Recommendations_AFS_ESN.pdf, page 3
Use EU templates that fully replace national formalities without additional national checks and cover multiple share classes, option pools, investor rights, convertible instruments, and resolutions.
“EU templates are essential to enabling speed and standardisation. When used they must fully replace national formalities and not be subject to additional national checks. They must also be commercially usable, not merely legally valid. This includes covering: multiple share classes, option pools and EU-ESO structures, standard investor rights, convertible or SAFE-like instruments, board and shareholder resolutions, share issuance and transfer documentation.”
EU-Inc_Key-Recommendations_AFS_ESN.pdf, page 3
Establish a fully digital, fast (within 48 hours) incorporation process with a central EU registry and a single EU-wide incorporation platform or one-stop shop, leveraging EU digital identity and business registers interconnection.
“Fast, Digital-First Incorporation: Entrepreneurs should be able to found a 28th regime company online within 48 hours across the EU. The process must be fully digital and streamlined – leveraging the EU Business Registers Interconnection (BRIS), eIDAS digital identity, and the upcoming European Digital Business Wallet. A single central EU incorporation platform or one-stop shop could be created, with data automatically synchronized to national business registers as needed.”
One Company, One Market_ Delivering a True 28th Regime for Europe’s Startups.pdf, page 5
Preserve flexibility in financing with no minimum capital requirement, flexible capital structures, multiple share classes, and fast issuance tools aligned with venture capital practices.
“The proposal’s flexibility in financing should be preserved: no minimum capital requirement, flexible capital structures and multiple share classes, fast and simplified issuance tools aligned with venture capital practices.”
EU-Inc_Key-Recommendations_AFS_ESN.pdf, page 4
Provide modern, flexible corporate structures including share classes and venture financing instruments, with simplified and harmonised rules for capital increases and share transfers to facilitate investment and employee equity.
“Flexible Governance and Shares: The new EU company form should come with a modern, flexible governance structure suitable for startups. This includes the ability to issue different classes of shares (e.g. non-voting shares, preference shares) and to implement vesting arrangements or conditional equity (important for both investors and co-founders). Rules for capital increases and share transfers should be simplified and harmonised, making it easy to bring in new shareholders or allow employee equity to materialise without unnecessary red tape.”
One Company, One Market_ Delivering a True 28th Regime for Europe’s Startups.pdf, page 6
Develop a standardised convertible instrument (EU-FAST) and preserve the once-only principle with digital infrastructure including digital share registers and transfers.
Maintain taxation at exit as a core principle of the EU-Employee Stock Options framework and preserve it even if tax provisions are separated from the main file.
“Taxation at exit must remain a core principle of the EU-Employee Stock Options framework. If competence constraints require separating tax provisions from the main file, the principle should still be preserved as part of the broader political package.”
EU-Inc_Key-Recommendations_AFS_ESN.pdf, page 4
Standardise employee stock option plans (ESOPs) across the EU to allow options granted by a 28th regime company to be recognised and exercised EU-wide, facilitating cross-border employee ownership.
“The 28th regime is an opportunity to establish a baseline framework for employee ownership that works EU-wide. While taxation of stock options is largely a Member State competence, the corporate law mechanics of granting and transferring equity should be standardised under the 28th regime. For example, the regime could ensure that options granted by a 28th regime company are recognised in every Member State and can be exercised or ported if the employee moves within Europe.”
One Company, One Market_ Delivering a True 28th Regime for Europe’s Startups.pdf, page 6
Ensure employee stock options complement wages and labour protections, are transparent, workable, and accessible, avoiding schemes that justify low wages or poor conditions.
“Share options should complement wages and labour protections. Workers should not be expected to accept poor working conditions or below-market salaries in exchange for a hypothetical future exit. ... The debate should not be about whether employee ownership exists, but about ensuring that it is fair, transparent and genuinely accessible in practice.”
EU-Inc_Key-Recommendations_AFS_ESN.pdf, page 12
Respect existing worker participation rights without weakening them, apply national rules where thresholds are met, and avoid linking seat choice to workforce location to preserve legal predictability and cross-border flexibility.
“Where an EU Inc. owns a national subsidiary that meets national worker-participation thresholds, those national rules should continue to apply. Similarly, conversion into an EU Inc. in that same Member State should not remove or weaken rights that workers already hold. ... Worker participation should also not depend on forcing the registered seat to match the location of the workforce. Linking seat choice to workforce location would undermine the legal predictability and cross-border flexibility EU Inc. is meant to provide.”
EU-Inc_Key-Recommendations_AFS_ESN.pdf, page 13
Protect worker involvement where there is genuine operational presence while keeping governance obligations proportionate to startup size and maturity.
“A better approach is to protect worker involvement where there is a genuine operational presence, while keeping seat choice stable and predictable. ... EU Inc. should therefore preserve existing worker protections while ensuring that governance obligations remain proportionate to the size and maturity of startups and scaleups.”
EU-Inc_Key-Recommendations_AFS_ESN.pdf, page 14
Enable a 28th regime company to have a single legal status and registration valid across all Member States without requiring separate local incorporation or multiple subsidiaries.
“One Company, One Registry, One Market: A core mantra for the 28th regime is “one company form, one registry, one market”. In practice, this means the 28th regime company’s legal status and registration would be valid across all Member States without requiring separate local incorporation. A founder would no longer need to establish multiple subsidiaries or branch offices just to operate in different EU countries.”
One Company, One Market_ Delivering a True 28th Regime for Europe’s Startups.pdf, page 6
Keep EU Inc. as a Regulation to ensure a single, predictable EU-wide product without national variants.
“EU Inc. must remain a Regulation. Transforming it into a Directive or a national-label model would reintroduce fragmentation through national discretion.”
EU-Inc_Key-Recommendations_AFS_ESN.pdf, page 2
Base the 28th regime on Article 352 TFEU and establish it through a Regulation to create a truly uniform, optional EU company form, avoiding directives that lead to fragmentation.
“AFS stresses three conditions for success: (1) the legal base must be Article 352 TFEU to create a self-standing EU form; (2) scope must remain lean, avoiding overload with unrelated tax or labour law harmonisations; and (3) the regime must be co-created with startups and investors to ensure usability. A compromise that delivers 27 variations instead of one uniform framework would be a false victory, perpetuating fragmentation rather than fixing it.”
One Company, One Market_ Delivering a True 28th Regime for Europe’s Startups.pdf, page 2
Maintain the Commission’s proposal on simplified insolvency and fast-track liquidation as a key complement to fast incorporation, while continuing discussions on restructuring and second-chance entrepreneurship.
“On insolvency, AFS and ESN members broadly support simplified frameworks, as they facilitate faster winding-down, reduce costs, and enable capital recycling across borders. ... AFS and ESN therefore support maintaining the Commission’s proposal as it stands at this stage.”
EU-Inc_Key-Recommendations_AFS_ESN.pdf, page 7
Clarify branch requirements so that remote or cross-border operations do not automatically trigger mandatory branches, keeping branches optional where justified.
“The proposal should clarify when branches are required versus optional. From AFS and ESN’s perspective: remote-first operations, cross-border hiring, or distributed teams across the EU should not automatically trigger branch requirements; branches should remain optional tools where justified.”
EU-Inc_Key-Recommendations_AFS_ESN.pdf, page 7
Include simple, quick, and harmonised procedures for voluntary dissolution, insolvency, and restructuring with safeguards and 'honest debtor' discharge provisions to reduce stigma and encourage entrepreneurial risk-taking.
“The 28th regime should therefore incorporate simple and quick procedures for voluntary dissolution, insolvency, or restructuring of a company that is not succeeding. We propose minimum EU standards for fast-track dissolution of a 28th regime company, including “honest debtor” discharge provisions that allow failed entrepreneurs to move on without undue stigma. Early-stage startups should not face disproportionate liability or criminal-style penalties for genuine business failure.”
One Company, One Market_ Delivering a True 28th Regime for Europe’s Startups.pdf, page 7
Align taxation of employee stock options with liquidity events in parallel initiatives but avoid delaying the core 28th regime with comprehensive tax harmonisation.
“We also strongly advocate that taxation of stock options should be aligned with liquidity events, but this can be advanced in parallel initiatives so as not to delay the core 28th regime.”
One Company, One Market_ Delivering a True 28th Regime for Europe’s Startups.pdf, page 6
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