EU-INC: A New Framework to Boost European Startup Competitiveness

The European Commission is poised to unveil a groundbreaking initiative, EU-INC (the “28th regime”), designed to streamline company formation and enhance the competitiveness of European startups and scale-ups. Scheduled for release on March 18, 2026, the proposal aims to address the fragmented regulatory landscape that has historically hindered growth and innovation within the European Union.

What is EU-INC?

EU-INC, legally designated as the ‘28th Regime’, envisions a standardized EU legal entity with a central, digital-first registry. This would allow companies to register quickly and affordably across the bloc, mirroring the ease of incorporation found in the United States and China . The initiative was initially a grassroots proposal from founders, investors, and operators across Europe.

Key Pillars of the EU-INC Framework

The EU-INC framework centers around three core pillars:

• 48-Hour Digital Incorporation: The ability to register a company in any EU Member State within 48 hours through fully digital procedures.
• Maximum Cost of €100: A capped cost of €100 for the incorporation process, reducing financial barriers for entrepreneurs.
• Pan-European Employee Share Ownership Plan: A unified scheme for offering stock options, valid throughout the EU, simplifying equity distribution for startups.

Addressing Fragmentation and Enhancing Competitiveness

Currently, Europe’s 27 different company law systems create significant hurdles for startups seeking to scale across borders . EU-INC aims to overcome this bureaucratic fragmentation, which is seen as a major obstacle to the EU’s competitiveness. The proposal is optional and establishes a European limited liability company with harmonized rules.

The March Council and Legislative Timeline

The European Commission President has indicated that the EU-INC proposal will be presented before the March European Council meeting, scheduled for March 19-20, 2026 . The Commission’s legislative proposal is currently scheduled for March 18, 2026, according to the European Parliament’s Legislative Train tracker . Ursula von der Leyen aims for the “One Europe, One Market” ambition to be reached by the end of 2027.

Concerns and Potential Challenges

Recent leaks of the proposal suggest it may fall short of establishing a truly independent European company form . Instead of a centralized system, the draft reportedly defers legal interpretation to national courts and company registration to national registries. This approach could result in 27 different variations of EU-INC, undermining the goal of a unified framework. Ecosystem groups are urging the EU to deliver a single corporate framework to avoid founders continuing to choose Delaware for incorporation .

Looking Ahead

The EU-INC proposal represents a significant step towards fostering a more competitive and innovation-friendly environment for European startups. The success of the initiative will depend on the Commission’s ability to deliver a truly harmonized framework that addresses the concerns raised by the startup community and avoids perpetuating existing fragmentation. The publication of the draft legal text on March 18th will be a critical moment for founders, lawyers, and VCs to assess the actual mechanism, scope, and safeguards of the new regime.