On 18 March 2026, the European Commission published the proposal for a new, harmonised European legal form: the EU Inc.Under the EU Inc. companies could opt into a single, uniform set of rules applicable across the EU. Currently, differences between the 27 Member States in areas such as incorporation, governance, employment law and taxation create legal complexity and additional costs. The EU Inc. seeks to reduce this fragmentation by offering a harmonised alternative.

In the area of employment and remuneration, the proposal explicitly allows EU Inc. companies to implement employee stock ownership plans and to issue different classes of shares with distinct voting rights. EU Inc. companies may opt into a common EU scheme for employee stock options (EU‑ESO), which introduces a harmonised approach to the taxation of employee stock options across Member States.

Under the EU‑ESO scheme, taxation would generally take place only upon disposal of the underlying shares, rather than at grant or exercise. This mitigates the risk that employees are taxed at a time when no liquidity has been realised. In addition, the exercise of stock options would be subject to a minimum waiting period of 24 months, reinforcing the long‑term incentive character of such arrangements.

While the proposal offers clear opportunities, the precise interaction between the EU Inc. regime and national employment and tax law remains uncertain. It is not yet clear to what extent national mandatory employment...

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