The European Parliament has given broad support to a “EU-inc”: a new EU legal framework designed to make it easier for companies to operate across borders. This week, MEPs voted 492 in favour, 144 against with 28 abstentions, adopting a series of recommendations that will now feed into the European Commission’s proposal for the so-called “28th regime” — part of its broader strategy to make the EU more competitive.
The framework should provide companies with a single, harmonised set of rules across the EU. As a result, company registration should be faster, cross-border operations easier, and access to investment and talent improved. Rather than replacing national company law, the 28th regime would offer an optional European structure designed to make the continent more competitive in the global market.
MEPs hail potential benefits for startups and SMEs
Rapporteur René Repasi (S&D/DEU) underlined the potential of the new framework to remove long-standing barriers for innovators: “Today’s vote shows that Europe can and must fix what has long held innovators back against global competitors”. Ms Repasi also welcomed the rare moment of unity: “When was the last time we saw such a broad centre majority on a piece of substance?”
Axel Voss (EPP/DEU) hailed it as a potential game-changer: “A new company form enabling 48-hour creation, fully digital operation, faster and better access to scale-up investment — unlocks Europe’s ideas and talent.”
Virgil Popescu (EPP/ROM) also laid out his vision: “The 28th regime must be open to all companies – no size or sector limits; truly EU-uniform; be fully digitalised; and leave national taxes alone.”
You might be interested
Votes against the resolution predominantly came from the Left as well as the Patriots. The Left’s main worry is that the 28th regime may erode social standards across the EU. Civil society organisation Corporate Europe Observatory echoes these concerns and has previously expressed that the unified rules may not be as strong as national workers’ rights: “Trade unions warn against the emergence of a two-tier labour market and a race to the bottom in social rights.”
On the other end of the political spectrum, the Patriots voted against it as they fear it could come at the cost of national sovereignty.
Directive vs regulation: a legal crossroads
A key question is the legal form the 28th regime will ultimately take. Startups have strongly advocated for a regulation, which would be immediately applicable across all EU countries. The European Parliament, however, has now recommended a directive, which would require each member state to transpose the framework into national law over a period of years.
Critics warn that a directive approach risks reproducing the fragmentation the 28th regime aims to eliminate: “For founders, it will mean 27 transpositions, 27 interpretations, and 27 opportunities for divergence and delay. It means replacing one patchwork with another,” warned a coalition of 27 startup associations in an open letter to the European Commission last year.
EU Perspectives also spoke to MEP Reinier van Lanschot (Greens/NLD) earlier this year, who similarly warned that the initiative might become irrelevant if it is implemented as a directive. The 28th regime is crucial, he said. “Europe is good at starting companies, but terrible at scaling them. Europe needs global champions. Therefore we need one European legal entity with one European rulebook, not 27.” However, he does view the Parliament’s directive recommendation as a “missed opportunity”: Rules are fine — as long as there is only one set of rules, not 27 different ones. So this has to be a regulation.”
Some MEPs, including Repasi, support the directive approach as a pragmatic compromise, since achieving unanimous support from all member states for a regulation may prove politically impossible.
The final shape it takes place remains contingent on the outcome of the discussions between the Council, Parliament and Commission.
Von der Leyen promotes EU Inc. in Davos
The Parliament’s vote coincided with European Commission President Ursula von der Leyen’s speech at the World Economic Forum in Davos, where she framed the 28th regime as a solution to Europe’s fragmented corporate landscape: “We will soon put forward our 28th regime. The ultimate aim is to create a truly European company structure. We call it EU Inc., with a single and simple set of rules that will apply seamlessly all over our Union. Our entrepreneurs will be able to register a company in any Member State within 48 hours — fully online. Ultimately, we need a system where companies can do business and raise financing seamlessly across Europe — just as easily as in uniform markets like the US or China. If we get this right, this will not only help EU companies grow, but attract investment from across the world.”
