The Proposed Regulation on the 28th Regime Corporate Legal Framework
COM(2026) 321 final — 2026/0074 (COD)
1. What is this about?
The European Commission has published a proposal for a Regulation on the 28th regime corporate legal framework, the “EU Inc.” (COM(2026) 321 final). If adopted, this would create a new legal form of a European limited liability company applicable in the legal order of each Member State.
The Regulation is based on Article 114 TFEU and, if adopted, will be directly applicable, meaning that no transposition into national law will be required. Where neither the Regulation nor the articles of association cover a particular matter, national law will step in. Each Member State must designate which national legal form will serve as the residual reference — for Belgium, this will almost certainly be the BV/SRL. The Regulation will apply 12 months after its entry into force.
Although the EU Inc. is designed primarily with startups and scaleups in mind, it is legally open to all founders and companies. Both natural and legal persons can form one, either from scratch or through domestic or cross-border operations involving existing companies.
2. How does the EU Inc. work?
Legal nature
The EU Inc. is a new legal form that EU law introduces into each Member State’s legal order. An EU Inc. registered in Belgium will be governed by a uniform set of EU rules on the matters the Regulation covers, by its articles of association and, for the matters not covered by the Regulation, by Belgian law. It acquires legal personality on the date of its registration in the business register and must be recognised by all other Member States.
Every EU Inc. must carry the mention “EU Inc.” in its name, have its registered office and central administration or principal place of business in the EU, and receive a European Unique Identifier upon registration.
Articles of association
The articles of association must be a single document, covering the mandatory matters set out in the Annex to the Regulation. They must be machine-readable and store information in structured data. Most importantly, they must exist in at least two languages: (i) the official language or languages of the Member State of registration and (ii) English. This requirement is one of the most immediately practical features of the EU Inc. for cross-border investors. Where the company uses the EU template articles, both versions have equal legal value. For tailor-made articles, the national language prevails in case of discrepancy.
The Commission will adopt EU templates for standard articles of association (the EU templates). Where these templates are used, any national requirement for notarial or other authentication of the articles of association is deemed fulfilled.
Formation
The Regulation creates a centralised EU central interface, as part of the business registers interconnections system (BRIS), through which founders can set up an EU Inc. regardless of which Member State they choose. The headline feature is the fast-track procedure: where the harmonised application form is submitted together with the articles of association in an EU template through this interface, the entire process — including preventive control and registration — must be completed within 48 hours, at a maximum cost of EUR 100, a cap that will be reviewed every five years, indexed to HICP.
Preventive control is maintained. The articles of association at the time of the formation, and any amendments, are subject to administrative, judicial, or notarial scrutiny. In Belgium, this means the notary will most likely remain involved — but within a radically compressed timeframe.
Founders can also form an EU Inc. through the EU central interface with tailor-made articles of association, or online with the national business register. Existing companies can set up EU Inc. subsidiaries, with BRIS automatically retrieving the parent’s data. And an EU Inc. can be created by converting, merging, or dividing existing companies — domestically or cross-border — subject to a two-year waiting period.
All procedures are digital-only. Physical presence may be required only in exceptional cases of suspected identity fraud. Under the “once-only” principle, information submitted to the business register at formation is automatically shared with tax, VAT, social security, and beneficial ownership authorities — the company does not need to file separately.
Governance
The governance model is lean and familiar. The EU Inc. is managed by a board of directors — consisting of one or more natural persons, with at least one resident in the EU.
The board exercises all powers not reserved to the general meeting or another statutory body by the Regulation or the articles of association, and the general meeting may give binding instructions to the board.
Where the EU Inc. has several directors, they represent the company jointly by default and are referred to as “co-directors”. The articles of association or the general meeting may provide for individual representation, but this is only opposable to third parties if it has been publicly disclosed. Other limitations may not be relied upon against third parties.
Directors’ duties are codified: they must act in accordance with the articles of association, in good faith and in the company’s best interests, and with reasonable care, skill, and diligence. The Regulation includes a business judgment rule: a director is not liable for a business decision taken in good faith, with reasonable prudence, and in the reasonable belief of acting in the company’s best interests. Beyond these harmonised rules, residual liability is governed by national law.
Unless otherwise provided in the articles of association or authorised by the general meeting, conflicts of interest must be disclosed to the board, and the conflicted director(s) must abstain from the decision. The articles of association may require approval or notification for related party transactions, and may prohibit certain related party transactions.
General meetings can be held fully online or in hybrid form, and decisions can be adopted by written resolutions where the articles of association permit it or all shareholders agree in writing to cast votes in writing. The default voting rules are straightforward: simple majority quorum and simple majority vote, with a two-thirds qualified majority for amendments to the articles of association. These default rules may be freely adapted in the articles of association.
Shares and transfers
Shares in an EU Inc. are dematerialised and recorded in a mandatory digital register, which the company must create at registration and keep up to date. The articles of association may allow the use of distributed ledger technology (DLT). After each transfer, the company must issue a digital share certificate, authenticated using qualified electronic trust services.
All shares carry equal rights and obligations unless the articles of association create multiple classes of shares. Classes of shares may carry different economic rights, voting rights, veto rights, or specific governance rights — including multiple voting rights and shares without voting rights. The default rule is one share, one vote.
Transfers are freely permitted by default — the opposite of the Belgian BV/SRL, where consent requirements apply unless the articles of association opt out. The transfer procedure is fully online: a qualified electronic seal or signature suffices, and no additional formalities — including a notarial deed — are required. The company must register the transfer or provide grounds for refusal within three working days.
Financing
This is where the Regulation breaks the most new ground. The financing framework is explicitly designed to attract cross-border equity investment and to compete for global venture capital.
There is no minimum capital requirement. The company may have EUR 0 in capital throughout its entire existence, and there is no obligation to build up capital or legal reserves over time. This is a clean departure from the continental European tradition. Where capital does exist, it must be expressed in euro or the national currency and is subject to conventional maintenance rules. In the absence of capital, creditor protection is achieved through modern balance sheet and solvency tests governing distributions.
The consideration for shares may take the form of any transfer of economic value, including an undertaking to perform work and supply services for considerations not to be contributed to the capital. Consideration that is to be contributed to the capital must be fully paid at issuance, but consideration that is not to be contributed to the capital may be deferred up to five years.
The board of directors or another company body can be authorised by the articles of association to issue new shares up to a specified maximum number of shares, including with the power to restrict or exclude pre-emption rights on new shares issued against cash consideration. Subscriptions are made electronically, and Member States may not impose additional formalities such as notarial deeds. Pre-emption rights apply by default for new shares issued against cash consideration (14-day exercise period), unless otherwise provided in the articles of association or limited or excluded by the general meeting.
Convertible instruments — including SAFEs, KISS notes, and warrants — are explicitly facilitated. The general meeting decides on their issuance, but can delegate this to the board or another company body. Once instruments are outstanding, the board is deemed authorised to issue the underlying shares without further shareholder approval, and existing shareholders have no pre-emption rights on those shares. For convertible instruments, the exchange of claims for shares is treated as a cash consideration.
Distributions require a general meeting decision and only take effect if the board certifies, in a statement signed by all directors, that two tests are satisfied based on the most recent financial statements: (i) a balance sheet test (the net assets must remain above liabilities plus capital) and (ii) a solvency test (the company must be able to pay its debts as they fall due in the normal course of business in the 12 months following the distribution). Directors who sign a false statement are jointly and severally liable, and shareholders must return unlawful distributions where they knew or should have known of the irregularities.
The EU Inc. may also issue redeemable shares, which are cancelled upon redemption and provide investors with a built-in exit mechanism. The redemption price is payable only if the distribution safeguards are met. Where the company has capital, any reduction requires a balance sheet and solvency test accompanied by an independent expert report.
Employee equity: the EU-ESO
For anyone working with startups that hire across borders, this chapter may be the single most consequential part of the Regulation. The EU Employee Stock Option Plan is designed to solve a problem that has frustrated European founders for years: the fragmentation of employee equity taxation across the Member States.
Under the EU-ESO, the company may issue warrants to board members and employees of the EU Inc. and its subsidiaries. Persons holding more than 25% of voting rights are excluded. The general meeting decides on the plan’s establishment, setting the eligible group, the maximum number of warrants, and a mandatory vesting period of at least 24 months. Warrants are non-transferable and issued for no consideration. The board is deemed authorised to issue the warrants and the underlying shares — or transfer treasury shares — within the limits of the plan, without pre-emption rights.
The taxation provisions are the headline. No taxable income arises at grant, at vesting, or when the holder exercises the warrant. Income is deemed to arise only when the shares obtained by exercising the warrant are disposed of. The taxable amount is the difference between fair market value at disposal and the acquisition price. Member States remain free to determine how this income is characterised and at what rate it is taxed, but they must ensure the EU-ESO receives treatment no less favourable than comparable national schemes. The tax provisions apply to all EU Inc. companies — a narrower scope limited to startups and scaleups was discussed but not retained in the final proposal.
This is a fundamental shift from the current Belgian approach, where the Law of 26 March 1999 taxes stock options at grant — the 60th day after the written offer — on a flat-rate percentage of the underlying share value, regardless of whether the option is ever exercised or produces any economic gain.
Cross-border features
An EU Inc. may open branches in other Member States, registered through the same EU central interface with the 48-hour/EUR 100 fast-track available. The once-only principle applies to branches too. Cross-border conversions, mergers, and divisions are carried out under Directive 2017/1132.
To facilitate cross-border operations, EU Inc. companies can use the harmonised EU Company Certificate, issued by business registers and accepted across all Member States, as well as the digital EU power of attorney. Documents from business registers are exempt from legalisation and apostille requirements, and translation requirements are significantly reduced where information is accessible through BRIS or the EU Company Certificate. Company data is available through BRIS in all official EU languages, and authorities may not request information that is already publicly available there.
3. What to watch
The proposal now enters the ordinary legislative procedure. Several points will attract debate: the 48-hour/EUR 100 fast-track will test national administrative capacity, particularly in Member States with notarial systems like Belgium; the EU-ESO tax deferral may face resistance from Member States that tax options at earlier stages; the insolvency chapter applies only to EU Inc. companies qualifying as “innovative startups” as defined in a forthcoming Commission Recommendation — a definition that will determine how wide or narrow the simplified winding-up procedure actually reaches; and the anti-discrimination provisions may generate sovereignty concerns.
We will follow the legislative process closely. If you would like to discuss how the EU Inc. might affect your business or investment strategy, we are happy to help.
