The European Commission is still planning to present, on Wednesday 18 March, before the European Spring Summit, its proposal for a 28th regime for companies, which the Member States consider essential for boosting the EU’s competitiveness.
The scheme, which is optional, is designed to enable so-called ‘innovative’ companies to be set up in a simplified manner within 48 hours, with the ability to operate rapidly in all Member States, but also to be wound up just as quickly, thanks to its exclusively digital form.
According to two draft texts seen by Agence Europe on Thursday 12 March, the Commission is to propose a draft regulation for this area of company law, based on Article 114 of the EU Treaty and requiring a qualified majority, as requested by the European Parliament in an own-initiative report. This is despite the fact that the Legal Service of the EU Council took the view, in 2025, that the use of Article 114 as a legal basis in company law for the European Cross-Border Association proposal was not possible.
Alongside this regulation, the Commission could also propose an EU Council recommendation on possible definitions of innovative enterprises, in particular startups, scaleups and high-growth scaleups.
EU Inc. via a centralised European interface. The draft regulation, in its provisional version, is expected to make it easy for founders to set up a so-called EU Inc. company. This will be done via a centralised infrastructure at EU level, regardless of the Member State in which they wish to set it up.
The Commission will thus have to set up a centralised, user-friendly “EU central interface”, the text states. This interface would allow the necessary procedures to be completed without having to use 27 different ones.
Integrated into the Business Registers Interconnection System (BRIS), which connects all Member States’ business registers and enables cross-border secure exchanges between them via the platform, the EU central interface should securely transmit the information and documents to the business register of the Member State where the EU Inc. company is to be registered.
The business registers should then automatically exchange the relevant information with the preventive control authorities. The interface should also allow founders, or their authorised representatives, to track the status of the registration of the company in real time.
The EU central interface should provide for a fast track formation procedure including preventive control within 48 hours and with a maximum cost of €100.
Subsidiaries. This procedure would apply when the EU Inc. is formed with the harmonised application form and EU templates for articles of association. The form and EU templates should be made available in a machine-readable and searchable format to foster cross-border interoperability and facilitate the automatic exchange of data between authorities. They should be accessible on the EU central interface.
“Similarly, existing companies, including EU Inc. companies, should be able to set up a subsidiary through the same procedure”, explains the Commission.
While the setting up of a company, under national law, often requires founders to submit separately information about the company to several public authorities for tax, social security or anti-money laundering purposes, these rules and procedures should be harmonised by ensuring a single exchange of data between the business register of registration of an EU Inc. and the relevant national authorities, the text explains, in order to reduce administrative burden.
Applying the principle of a single exchange in relation to tax authorities, social security authorities and the beneficial ownership registers should also contribute to tackling possible abuses by ensuring that business registers share data with other authorities as well as with the beneficial ownership register, and all use the same company information.
The reliable and up-to date information about EU Inc. companies at EU level through BRIS and in the national business registers would cover the information throughout the lifecycle of the company including liquidation.
European Digital Business Wallet. In addition, the ‘European Business Wallet’ will support companies in business-to-business and business-to-government communications. EU Inc. companies and other companies, once formed and registered in the business register, may purchase it to securely authenticate, store and share documents.
The regulation also envisages the European Business Wallet as one of the options for EU Inc. companies, together with trust services, to sign forms when registering a branch or setting up a subsidiary.
National employee participation rules preserved. The draft text also states that it is important to ensure that the EU Inc. corporate legal framework provides an easily recognisable but also a reliable and trustworthy legal form for founders, companies, investors and other stakeholders, and that this legal form cannot be used to circumvent any rights, including employees’ rights to participation in company boards.
Therefore, the EU Inc. companies should be subject to employee participation rules, where such rules exist, of the Member State where an EU Inc. company has its registered office and subject to rules on employee participation under Directive (EU) 2017/1132 in case an EU Inc. company is created by or carries out a cross-border conversion, merger or division.
“This would guarantee equal treatment of EU Inc. companies with existing national company forms and ensure that national safeguards and acquired employee rights are not undermined”, says the Commission.
The text also adds that EU Inc. companies should benefit from an employee share ownership plan, covering not only the members of the board and employees of the EU Inc. company but also those of its subsidiaries.
Recital 80 of the draft text also states that the EU legal framework on information and consultation of employees should also apply to EU Inc. companies, where appropriate, without providing further details on employees’ rights. It also simply states that national laws should also apply to issues not covered by this regulation, such as taxation or social security.
However, dispute resolution remains a matter for national courts, as no cross-border mechanism is proposed.
Definitions. The draft annex to the recommendation defines an ‘innovative enterprise’ as an enterprise which has incurred research and innovation costs representing at least 10% of its total operating costs in at least one of the three preceding years or which plans to market products that are genuinely new and creative compared with what exists on the market.
Links to the draft: https://aeur.eu/f/l5o ; https://aeur.eu/f/l5h (Original version in French by Solenn Paulic with Anne Damiani)