The long-promised fix for EU’s fragmented market is facing its moment of truth. The 28th regime lands in the European Parliament — and quickly runs into a clash over how much simplification is too much.
The European Commission last month proudly presented its plans for a so-called 28th regime: an effort to make Europe a place where companies can finally scale across borders with ease. The idea, branded as EU Inc., is meant to signal a shift away from fragmentation towards a single market that actually functions as one.
But while Parliament’s support for the ambition is broad, MEPs are already split over what the regime should look like. And whether the Commission’s proposal goes far enough, or perhaps too far.
A single rulebook — on paper
The 28th regime would offer companies a single, optional rulebook for operating across borders. The aim is to reduce the fragmentation that has long held European firms back, without replacing national systems entirely.
That fragmentation is widely seen as one of the reasons why Europe, despite producing more startups than the United States, struggles to turn them into global champions. Between 2008 and 2021, roughly a third of European unicorns relocated abroad. Among them companies such as Spotify, Klarna and BioNTech are often cited as examples.
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“Fragmenting into 27 national markets means sending gifts to the Americans, the Chinese and the rest of the world,” said Enrico Letta, whose report on the future of the Single Market helped revive momentum behind the idea.
Broad backing, early fault lines
“I do not say this very often, but I think this proposal is a very solid basis for such a landmark legislation,” said MEP Axel Voss (EPP/DEU), capturing the sense among some lawmakers that Brussels may finally be delivering on years of promises to simplify doing business across the EU.
Others, however, were quicker to point to gaps. For René Repasi (S&D/DEU), Parliament’s rapporteur on the file, even the branding raises questions. The label “EU Inc.”, he argued, borrows too heavily from American corporate concepts and does not sit comfortably within Europe’s legal traditions.
He also warned that the Commission’s headline promise of allowing companies to be set up within 48 hours risks coming at the expense of safeguards. “Crash barriers are lacking,” he said, pointing to what he sees as insufficient protections for employees, creditors and anti-money laundering rules.
That tension between speed and safeguards runs through much of the parliamentary divisions. While the Commission is trying to cut red tape, some lawmakers fear it may also cut corners. Several warned that without stronger protections, the new framework risks being “stained” before it is even implemented.
Similar concerns were raised by Pascale Piera (PfE/FRA) who pointed to potential risks around fraud, opaque ownership structures and distortions between national social systems. Questions around employee protections have also surfaced repeatedly, particularly from those worried about the emergence of a parallel, lighter-touch framework.
A long-overdue fix?
At the same time, there is a strong sense that such a framework is long overdue. “As a young person learning about Europe, you would think a law like this already exists,” said Lukas Sieper (Renew/DEU), reflecting frustration with how incomplete the Single Market still feels in practice.
That sentiment underlines the political appeal of the proposal: EU Inc. is a symbol of whether Brussels can actually deliver on its long-standing promise to remove barriers within its own market.
Concerns beyond Parliament
The divisions in Parliament are mirrored outside Brussels. Trade unions and labour groups fear the regime could trigger “regime shopping”, with companies choosing to base themselves in jurisdictions offering the weakest labour protections.
Business groups, meanwhile, worry about another problem. Without deeper harmonisation in areas such as taxation, insolvency rules or intellectual property, they argue that the 28th regime alone may not significantly change how companies operate in practice.
Investor concerns have also surfaced. Some warn that the proposed framework could weaken shareholder rights, particularly if companies using the EU Inc. structure decide to go public.
According to Rients Abma, director of Eumedion, which represents institutional investors, core principles of corporate governance could be undermined: “There is a risk of a serious breach of the fundamental principles of company law. Shareholders in such an EU Inc. company may soon no longer be able to step in when things start to go wrong. In such cases, shareholders might have fewer tools to intervene if a company runs into trouble,” he told Dutch newspaper FD.
A milestone or a halfway house?
For now, the Commission remains optimistic, estimating that up to 300,000 companies will opt into the new regime. But the real test lies ahead. And the question remains whether EU Inc. will become the genuine step towards a functioning Single Market that Europe so desperately needs, or if it will ultimately remain a well-intentioned compromise that leaves the underlying fragmentation largely intact.
