EU adopts position on "EU Inc" company status

The Council of the European Union adopted its position on 23 October 2026 regarding "EU Inc," a proposed optional company status for young businesses operating across multiple EU countries. This status aims to simplify the process of setting up and managing a company in different member states.

Key features of the proposal

The proposal includes an online registration process that must be completed within 48 hours, with a maximum cost of 100 euros. This streamlined approach is intended to encourage entrepreneurship and facilitate the growth of businesses across the EU single market.

Scope of the new framework

The Council's proposal adds the "28th regime" to the existing 27 national company laws, meaning that companies can choose this framework without replacing their current legal status. However, this remains a negotiating position and is not yet an applicable regulation.

Reduced integration and harmonization

Governments have narrowed the scope of the original proposal, making the framework less integrated than previously planned. Several provisions, such as those on the shareholder register, administrative exchanges, and incorporation procedures, have been adjusted to accommodate national differences.

Removed elements from the proposal

According to a review of the Council's mandate, the central register and the chapter on insolvency have been removed from the text. This change affects how companies can manage procedural differences when operating in multiple countries.

Employee benefits limited to smaller firms

The European share options scheme, designed to attract and retain employees, remains in the proposal. However, the associated tax benefits are restricted to companies with fewer than 750 employees and an annual turnover of no more than 150 million euros.

Employee participation rules

Employee participation in company decisions primarily follows the rules of the member state where the company is headquartered. However, an optional mechanism allows for considering participation thresholds met in other countries where the company operates.

Enhanced regulatory controls

Member states have introduced stricter controls on the registration and ongoing management of companies. National authorities may refuse registration if it relates to money laundering, terrorist financing, or other criminal activities, as defined by their national laws.

Implementation timeline

The Council proposes a 21-month implementation period for the regulation after it enters into force. This timeline does not set the start date for companies to use the new status but outlines the period needed to prepare for its application.

Next steps in the legislative process

The proposal is still subject to the full European legislative process. Discussions between the Council and the European Parliament can begin once the Parliament adopts its position. The final agreement will determine how much common regulation can reduce legal and administrative barriers for cross-border businesses.