The European Commission’s proposal for a unified corporate framework, EU Inc, arrived on 18 March 2026 with a known blend of ambition and restraint. Positioned as a so-called “28th regime,” it introduces an optional, digital-by-default legal structure designed to allow companies to incorporate rapidly and operate under a single core set of EU rules across the Single Market. That sounds good and is a clear response to demands by coordinated efforts of European startups and their representative bodies.
The political intent is unmistakable: Europe must compete more aggressively with the United States and China, not only through regulation, but through speed, simplicity, and scale. The proposal promises simpler governance, better insolvency-related procedures, and a harmonised corporate framework aimed squarely at innovative start-ups.
For many startup representatives, the EC proposal is already seen as a compromise that falls short of fully meeting expectations. This critique sits somewhat uneasily with a sector that emphasises iterative processes and step-by-step improvements. More broadly, the startup ecosystem has long challenged traditional corporate approaches that aim to deliver complete solutions in a single step, while promoting its own iterative model of innovation. In the policy context, however, expectations appear less aligned with this incremental logic.
The EC proposal is innovative in that it takes political realities into account and sets up a negotiation between European Parliament and Council that allows for further refinement and targeted intervention. Whether the final legal text, assuming it is not significantly delayed by Member States, will address all demands put forward by the startup sector remains to be seen. Whether all such demands are equally relevant is another question.
Apart from this, for all its promise, EU Inc still remains notably underdeveloped in one critical dimension: how companies formed under this new regime will raise capital.
A Corporate Framework Without Financial Rails?
EU Inc addresses a long-standing structural weakness of the European economy: fragmentation in corporate law. By offering a single, optional legal regime, it reduces the need to navigate 27 national systems and dozens of legal forms, an obstacle that has historically hindered cross-border scaling within Europe.
However, while EU Inc may reduce incorporation friction, it does not eliminate the broader constraints of the European business environment. Companies operating across borders will still face divergent national rules on taxation, labour law, and supervision. These limitations have been explicitly acknowledged by the Commission itself.
Still, the proposal is largely silent on how EU Inc entities will interact with the EU’s evolving financial architecture. This is striking because, in parallel, the Union has spent years constructing precisely the tools needed to support cross-border fundraising. These frameworks are still evolving, but they are already in place, being used and scaling.
Parallel Integration: Missing
Over the past decade, the EU has built a layered regulatory framework for capital formation:
- The European Crowdfunding Service Providers Regulation enables cross-border crowdfunding under a single licence.
- The Markets in Crypto-Assets Regulation establishes a harmonised regime for crypto-assets outside traditional securities.
- The DLT Pilot Regime creates a controlled environment for tokenised financial instruments, though as a time-limited experiment and not for permanent integration.
- The Capital Markets Union has aimed to deepen and integrate capital markets across the Union.
Individually, these initiatives address fragmentation in capital markets. Collectively, they form the beginnings of a new European fundraising ecosystem.
Yet, EU Inc does not explicitly connect to any of them. This suggests that the interaction between corporate law innovation and capital market development is not yet fully articulated across policy domains.
The result is a structural disconnect: a harmonised corporate form without a fully integrated capital-raising framework.
Unlike Delaware, where corporate law and securities regulation operate within a single national legal and supervisory framework, the EU’s approach remains fragmented, with EU Inc as a corporate layer, MiCA as a crypto layer, and ECSPR as a crowdfunding layer, each governed by different rules and institutions. While comparisons with Delaware are frequently made, they overlook the fundamentally different scale and complexity of the European Union.
Tokenisation: Fragmentation
Nowhere is this disconnect clearer than in the treatment of tokenisation. While MiCA is often presented as the EU’s flagship digital finance regulation, it explicitly excludes financial instruments governed under MiFID II. In practice, this creates a bifurcated system:
- Crypto-assets, such as utility tokens and stablecoins, fall under MiCA.
- Tokenised shares and debt instruments remain subject to traditional securities law.
The DLT Pilot Regime partially bridges this gap by enabling experimentation with tokenised securities trading and settlement. However, it remains a temporary and limited framework rather than a fully integrated market solution.
EU Inc, with its digital-first design and cross-border recognition, could provide the missing corporate layer for tokenised finance. But without explicit alignment with securities law, the Prospectus Regulation, and DLT infrastructures, this potential remains largely theoretical.
Crowdfunding: Unused
A similar pattern emerges in relation to crowdfunding. The European Crowdfunding Service Providers Regulation allows platforms to passport services across the EU, lowering barriers for cross-border fundraising. In principle, an EU Inc company could raise capital from retail investors across multiple Member States under a single platform license. In practice, however, frictions remain:
- Divergent national marketing rules
- Tax treatment differences
- Investor protection overlays
EU Inc does not address these frictions, nor does it provide a framework for standardised disclosures or fundraising pathways. The opportunity is clear, but the integration is absent. Early adopters are likely to lead the way in testing these synergies, but without explicit guidance, progress will be piecemeal.
Capital Markets Union: Structural Constraint
The broader context is the ongoing effort to build a Capital Markets Union, a project that has, for over a decade, sought to reduce Europe’s reliance on bank financing and deepen capital markets.
EU Inc aligns with this objective at a structural level. However, key barriers remain:
- The continued centrality of the Prospectus Regulation
- Fragmented post-trade and settlement infrastructures
- The absence of a unified approach to taxation, with initiatives such as the Common Consolidated Corporate Tax Base having faded away
Without progress on these fronts, EU Inc risks improving the form of European companies without fully addressing the function of European capital markets.
Political Economy: Integration by Design, Not by Default
The absence of explicit integration is not accidental. It reflects the political constraints of European policy making. Corporate law, taxation, and securities regulation remain deeply sensitive areas of national competence. Any attempt to fully integrate them within a single framework would likely face resistance from Member States concerned about regulatory arbitrage, fiscal sovereignty, or labour standards. These constraints are often underappreciated in parts of the startup debate.
In this context, EU Inc follows a familiar European logic: create a flexible framework and allow integration to emerge incrementally though following policy negotiations of the Level 1 and Level 2 measures, followed by later adjustments mirrowing market practice.
This approach is consistent with broader EU governance dynamics:
- Gradual harmonisation rather than sudden unification
- Optional regimes rather than mandatory convergence
- Early adopters paving the way for wider uptake
The next phase will depend on how this layer connects to crowdfunding ecosystems, tokenised finance infrastructures, public capital markets, and, ultimately, taxation frameworks. The onus is now on founders, crowdfunding platforms, and legal innovators to test the boundaries of EU Inc’s compatibility with MiCA and existing securities frameworks, pushing for clarifications where gaps exist, and building market infrastructure, such as digital registries and standardised documentation, that policymakers have yet to provide.
For policymakers, the Commission’s next move should be to issue guidance on how EU Inc companies can leverage MiCA for crypto-asset offerings, and existing securities frameworks for tokenised instruments, alongside ECSPR for cross-border crowdfunding, using the next steps in the negotiation to fix what the proposal so far leaves loose.
A Beginning, Not a Breakthrough
EU Inc is best understood not as a breakthrough for the startup ecosystem, but as a structural enabler. In startup terminology, an iteration. This is policy making with a Lean Startup approach, emphasising iteration and feedback within political constraints. The Commission is starting with a basic version of a policy proposal to gather insights and enable further refinement.
In this light, critiques from the startup ecosystem reflect a tension between expectations of rapid change and the realities of European policy making. The steps themselves are familiar:
- Start with a Minimum Viable Policy (MVP): Build a simple version of a policy to test its fit and gather feedback.
- Test and Pivot: Continuously validate the policy through implementation and stakeholder input.
- Focus on Stakeholder Feedback: Prioritise understanding needs before scaling.
- Iterate and Learn: Refine progressively rather than aiming for completeness from the outset.
EU Inc reduces one of the key frictions in the European system, corporate fragmentation, while leaving others largely untouched. Its success will therefore not be determined by the speed of incorporation or the number of firms adopting it, but by the extent to which it becomes embedded within Europe’s broader financial ecosystem.
The European model rarely delivers transformation in a single step. It advances through layers, legal, financial, and political, each building on the last. In that sense, EU Inc is entirely consistent with the European method: not a revolution, but a quiet, cumulative shift toward integration. And, as ever in Europe, its true impact will emerge not from the proposal itself, but from what follows.
