Every European founder knows the moment: the product is ready to scale, but the borders inside the EU suddenly feel very real. They then face the struggles of adapting to each market’s requirements and quirks.
As we’ve covered previously, this is precisely why the 28th Regime, or EU-Inc, has become such a compelling proposal. It wouldn’t replace national structures like the GmbH, SAS or S.R.O., but would provide a voluntary, EU-wide corporate form that works uniformly across all member states.
And over the past year, the idea has only gained momentum. In just days, more than 8,400 supporters, including founders of Stripe, Wise, Wolt and DeepL, and investors from Index Ventures, Atomico and Sequoia, signed onto a petition demanding meaningful legal simplification for European startups.
The window for influence is still open
Damian Boeselager, Member of the European Parliament and Vice-Chair of the ECON Committee, one of the leading voices in the policy discussions around EU-Inc, places the initiative within a broader economic reality. “Europe has a bit of an innovation problem,” he says. “The U.S. founded 200 companies in the last 50 years with a market cap of more than $10 billion. In Europe, it has been 14.” For him, the solution lies in modernizing the single market and finally removing the barriers that prevent companies from scaling across borders.
But the EU has historically hesitated to deeply harmonize corporate law, let alone taxation or labor law. That is why the 28th Regime is not an attempt to unify everything. Instead, it is a voluntary corporate form, a “28th option”, that founders can choose if it suits their scaling ambitions.
Iwona Anna Biernat, Co-lead & Legal strategy at the EU-IIC, explains that the initiative is at once a concrete policy design and a movement. “EU-Inc is both a concrete proposal for how the 28th Regime should function and a movement representing the European startup ecosystem,” she says.
“It is the community’s collective voice pushing for a model that truly solves the operational pain points founders face, while also respecting political realities.”
The new European Commission will begin shaping its legislative agenda in just six weeks, and the formal proposal for the 28th Regime is scheduled for March 2026. Until then, the window for influence is wide open, clarified Iwona, but not for long.
“Right now, the most important move for founders is not legal restructuring but advocacy,” Iwona stresses. “This is the moment when their voices still shape the outcome.”
Where is EU-Inc now?
Damian explains that the initiative began with the ecosystem itself. “There was a strong initiative by people who really know, venture capitalists, founders, who said, ‘hey, we need something like this.’ They pushed it into the speaking points of Ursula von der Leyen and other top officials.”
But after the early enthusiasm, Europe’s political machinery is starting to process the idea. Not with a great pace. There is a crucial legal design bifurcation ahead: Should EU-Inc be a Regulation or a Directive?
Damian explains the outcome: “If you go for a regulation, after negotiations it becomes active immediately and is standardized across the continent. If you go for a directive, there are two more years of national transposition, and member states can add requirements through gold-plating, which is the exact opposite of what we want.”
Iwona shares the same concern but frames it from the perspective of adoption:
“The ecosystem matters, but in this case the legal design matters even more, because if we get it wrong, founders simply will not adopt it. They will continue to incorporate outside the EU just to get the certainty and speed they can’t get at home.”
In other words, if the EU chooses the wrong instrument, EU-Inc risks becoming another symbolic initiative, promising just on paper.
The promise of EU-Inc rests on establishing a new continental baseline: instant digital incorporation, swift issuance of tax numbers, straightforward licensing to operate across borders, a single rulebook and a centralised registry. If the final proposal fails to include these features, the market will simply ignore it.
“What Europe needs is one trusted vehicle: one standard, one registry, one rulebook, i.e. EU-Inc,” Iwona argues. “Without a single rulebook there is no trust, no speed and no scale.”
Structural barriers
The 28th Regime is meant to be a fix, but for what, exactly? There are many structural barriers, mainly in fragmentation, that have remained consistent over the years:
- Corporate law
Hundreds of corporate forms exist across the EU, each with its own rights, obligations and insolvency rules. This creates confusion for investors and friction for founders.
“If you invest in a Finnish startup with a Finnish corporate form, you might have less idea about what your rights are,” Damian says. In contrast, American investors know the Delaware rulebook by heart and can rely on a predictable legal system.
- Labor law
This is where political resistance is strongest. “As soon as it goes to labor law, there’s a lot of fear,” Damian notes. Countries like Germany worry that a pan-European standard might water down high domestic protections. Yet companies need flexibility to hire in multiple countries without navigating 27 legal frameworks.
- Taxation and VAT compliance
For instance, one of the practical headaches for early-stage founders is VAT, especially for digital products. It remains an unresolved issue when operating across multiple countries and navigating when, where and how refunds should be processed.
- Cross-border hiring
A German company wanting to test the Polish market must often open a legal subsidiary, even though EU law theoretically allows cross-border operations without doing so.
“It’s not necessary because it’s against EU law,” Damian says. “But it is so much easier to do it that everyone ends up creating another legal entity.”
- Capital markets
Damian outlines that 70% of venture capital in Europe comes from within the founder’s own country. Only 30% comes from the U.S., and nearly 0% is pan-European. He calls this a lost opportunity, especially for Central and Eastern Europe.
“Italian investors are not investing enough in Romania. That’s a setback.”
A single corporate form could enable cross-border investment simply by reducing legal friction. Iwona frames the issue even more sharply: “Europe still operates in silos. Capital stays local, hiring stays local and even supposedly common rules get interpreted differently. For a high-growth company, that fragmentation slows you down more than any competitor ever will.”
European Parliament and United Europe
Support for EU-Inc spans the Commission President, top EU officials, leading founders, major venture funds and much of Europe’s startup community, creating an unusually broad pro-innovation coalition. The scepticism, however, comes from parts of the Social Democratic and Left groups, labour unions and several member states wary of ceding even limited regulatory control over areas they see as politically or symbolically important.
“Short-sighted national interests” remain the biggest obstacle, Damian argues. “People don’t understand that by giving up some national rules, the overall benefits for Europe would be huge.”
The European Parliament will eventually negotiate the law alongside the Council, with eight MEPs representing different political groups. Labor protections, corporate governance, capital mobility and insolvency rules will all be contested territory. But the ecosystem is already mobilized. Iwona believes this moment is unique: “This is a once-in-a-generation opportunity to build the legal foundation Europe’s entrepreneurs have always needed.”
The political climate is shaped by broader anxieties as well, such as declining competitiveness, demographic challenges, and geopolitical tensions. The next Commission must demonstrate bold action, and EU-Inc has become a symbol of Europe’s willingness, or unwillingness, to finally empower its innovators. The success of the 28th Regime will ultimately be determined by whether Europe chooses to treat startups as strategic assets. “Europe has to decide what kind of startup continent it wants to be: one that keeps founders in Europe, or one that pushes them away. Reduce friction and they will build here. Ignore it and they will build somewhere else,” concludes Iwona.
