Today, the European Commission presented a draft regulation for the EU Inc. – a unified corporate form designed for the entire EU. As the cornerstone of a potential “28th regime”, it aims to harmonise further areas of law in the long term. Currently, fragmented national company laws hinder cross-border activities, increase administrative burdens, and drive up costs from incorporation to insolvency.
What does the EU Inc. offer?
The draft proposes several key improvements:
- Rapid incorporation: Digitalised processes enable the registration of an EU Inc. within 48 hours, using standardised templates.
- Flexible capital requirements: No minimum capital is required, though strict solvency and balance sheet checks will protect creditors.
- EU-wide recognition: A uniform legal framework facilitates cross-border mergers and acquisitions.
The draft regulation aligns with demands set out in the “E6 Paper” (see TSI kompakt, 11 March). However, it does not address core areas of national civil law – including tax, labour, and insolvency law.
Potential opportunities for the securitisation market?
While the focus is clearly on start-ups, the scope of the EU Inc. extends further. Although details are not yet finalised, the EU Inc. holds additional promise: if all parties to a securitisation transaction operate as EU Inc. entities, processes could become more efficient – since national regulations could eventually be replaced. That said, the road ahead is likely to be long, and during the transition, mixed portfolios might even create extra work.
Outlook: Assessment and next steps
The EU Inc. is primarily a corporate law instrument, simplifying the legal structure of companies. However, the real challenges – fragmented taxation, divergent labour laws, national insolvency rules, and sector-specific regulations – remain unresolved for now. Nevertheless, the EU Inc. opens the door to establishing at least an effective 28th corporate law regime.
The draft will now be debated in the European Parliament and Council. By March 2027, member states are expected to create the technical and legal conditions needed to transpose the EU Inc. into national law.