New 28th Regime for Founders and Global Business in the EU: Main Points

TL;DR

• The European Union is proposing the 28th Regime a single optional company form across all 27 member states, without picking a national legal system first.
• The 28th Regime is aimed at fixing the European stock option problem: no tax at grant, vesting, or exercise — only when shares are sold.
• It’s not the law yet, but the legislative process stays on schedule; the earliest time the founders could use it is late 2027.
• Existing jurisdictions — Cyprus, Estonia, Netherlands — remain the right choice for now.

The 28th regime explained

The 28th regime — formally called EU Inc. — is the European Union’s answer to a bunch of problems. It introduces a new optional EU-wide corporate framework, proposed by the European Commission on 18 March 2026. 

Right now, starting a company in one EU country and operating in another means navigating two different legal systems. Doing business across, say, five EU countries means five different systems. There are 27 national legal systems and more than 60 company legal forms in the EU, and setting up can take weeks or months.

Note: The 28th regime does not replace the 27 national systems. It sits alongside them as a 28th option. 

What Changed For Founders With the 28th Regime

We help businesses with company formation, and we can see that this is the most significant structural change to EU corporate law in a generation.

For years, the conversation with international founders has been: which EU country fits your business? Cyprus for the tax regime and Non-Dom. Estonia for a digital-first remote setup. The Netherlands or Luxembourg for holding structures. Each comes with a national legal framework, a specific banking environment, local compliance obligations, and a substance demand.

Basically, if you want to start a company and operate across Europe right now, you have to pick one country, incorporate there, and then figure out how to operate in every other country separately. It’s slow, it’s expensive, and it was designed for a world where businesses were mostly local. 

The catch is that the 28th Regime is not the law yet. It’s a proposal that has to go through the European Parliament and the Council, and that process is still running. If it passes by the end of 2026 and enters into force 12 months after that, the earliest time the earliest founders would use it is probably late 2027 or early 2028. But the direction is clear, and the political support is real — the European Council backed it in March 2026 as a priority.

The core features — what EU Inc. will offer if accepted

48-hour registration, €100 maximum, no minimum capital

Entrepreneurs will be able to register an EU Inc. within 48 hours, for a maximum cost of €100, with no minimum share capital requirement. The process is fully digital — physical presence is the exception, not the norm. Founders submit information once through a single EU-level interface connected to national registers via the Business Registers Interconnection System (BRIS). After registration, the company automatically receives its tax identification number (TIN) and VAT number — no separate visit to a national tax authority required.

For context: Cyprus company registration currently takes 8–12 business days. An Estonian OÜ via e-Residency can be done in under an hour if you have the e-Residency card — but that’s an exception born of Estonia’s specific digital infrastructure, not a European standard. EU Inc. would make that speed the baseline everywhere.

Share transfers without a notary

The requirement for notarial certification of share transfers is entirely waived under EU Inc. A digitally signed contract in accordance with the eIDAS standard is sufficient.

For founders who have dealt with German GmbH share transfers — or similar notarial requirements in Belgium, Austria, or Poland — this is significant. Share transfers that currently require in-person notary appointments, weeks of scheduling, and hundreds of euros in fees would become a digital process.

The EU Employee Stock Option Plan (EU-ESO)

This is arguably the most consequential feature for startups. The EU-ESO solves the “dry income” problem that has made European employee equity schemes unattractive for years. Under EU-ESO, no taxes are levied at grant, vesting, or exercise. Taxation is deferred until the point of sale.

The minimum vesting period is 24 months. Warrants are non-transferable and issued for no consideration. Persons holding more than 25% of voting rights are excluded from the programme.

The dry income problem — where employees owe tax on equity they cannot yet sell — has driven many European startups to incorporate in the UK, Delaware, or other jurisdictions with friendlier option taxation. A harmonised EU solution that defers tax to exit is a meaningful structural improvement.

Digital insolvency and fast-track liquidation

For innovative startups, EU Inc. provides simplified, fully digital insolvency procedures — allowing founders to wind down faster and at lower cost, and restart more quickly after a business failure.

Fast and cheap failure is a feature, not a bug. The EU has historically made it expensive and time-consuming to wind down a company, discouraging entrepreneurial risk-taking. This provision directly addresses that.

To sum up

EU Inc. is the most ambitious corporate law proposal the EU has produced in years. If it passes and is implemented well, it removes a real structural disadvantage that European founders have faced compared to their US and UK counterparts: the friction of 27 different legal systems.

For founders evaluating EU company formation today: EU Inc. does not change anything yet. The jurisdictions that work — Cyprus, Estonia, the Netherlands — still work for the reasons they have always worked. Watch the legislative process, especially the appointment of the rapporteur and the JURI Committee position. That will signal whether what emerges from the legislative process resembles the Commission’s proposal or a significantly amended version.

For founders building structures with a five-year horizon: this is worth tracking. The EU has political will, a legal text, and a deadline. Whether the output matches the ambition is the question that 2026 and 2027 will answer.

Legarithm advises on EU company formation across Bulgaria, Cyprus, Estonia, etc. If you are evaluating your European structure in light of the 28th regime proposal, reach out at legarithm.io.