On March 18, 2026, the European Commission (EC) published its Proposal for a Regulation establishing a new corporate legal framework - “EU Inc.”, which introduces a harmonized set of rules for a new EU company form, the EU Inc. Companies in the EU can choose this form, regardless of their size, their business, their EU country of incorporation and/or headquarter. The aim is to facilitate starting and growing a business in the EU, attracting investments, and reducing the costs of failure.

The proposed regulation is seen as the key legislative measure of a wider response from the EU institutions to the demands of the European startup ecosystem, which is further laid out in the accompanying “Communication towards a 28th regime”. The regulation is also accompanied by a Recommendation providing first-ever EU-wide definitions of “innovative enterprises”, “innovative startups” and “innovative scaleups”.

Why does it matter?

The EC recognizes that the EU lacks an innovation-friendly corporate framework, and far too many entrepreneurs and innovative companies wishing to expand across EU borders face navigating a fragmented corporate legal landscape with 27 national legal systems. This complexity can delay setting up a company, slow growth, raise costs and discourage scaling up.

According to the EC’s own data, the EU hosts over 40,000 venture capital (VC)-backed tech startups and creates more of them than any other region globally. Yet, at the same time, the EU had only 331 unicorns...

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