On 18 March 2026, the European Commission presented its draft proposal for “EU Inc.” This harmonized legal framework aims to lay the groundwork for the 28th Regime, facilitating the founding, growth, and financing, particularly, but not only, of innovative companies. The goal is to reduce differences in company and insolvency law and improve access to capital.
Tobias H. Tröger, Director of the “Law and Finance” cluster at the Leibniz Institute for Financial Research SAFE and Professor of Civil, Commercial, and Business Law at Goethe University Frankfurt, sees the proposal as a missed opportunity to truly improve the financing of innovative companies and unleash economic dynamism:
“Instead of a precise instrument to promote innovative companies, the EU Commission has presented a broad but poorly targeted set of rules. An effective 28th regime provide a surgical tool to support startups and scale-ups and not the dinosaurs of the old-economy.” In light of geopolitical challenges, rising populism, and technological transformation, EU Inc. is not sufficiently attuned to high-growth firms that are crucial in closing Europe’s competitiveness gap, according to the legal scholar.
Lack of precision
The proposal lacks key elements that would actually improve financing conditions. This includes clear tailoring for growth companies.
“For innovative companies, the patchwork of 27 national legal systems remains where it matters most. The announced digital infrastructure is helpful, but not sufficient for their needs. The substantive corporate law impediments that prevent European startups from scaling are not, at their core, problems of digitization. They are problems of substantive legal fragmentation.”
The most important innovations – zero minimum capital requirement, non-par-value shares, “Simple Agreement for Future Equity” (SAFE) and “Keep It Simple Security,” (KISS) instrument compatibility, as well as a harmonized European employee stock ownership program with tax deferral to disposal – are unlikely to realize their full potential if they are enshrined in a regime that aims to serve the corporate law needs of a two-person deep tech startup just as well as a multinational group.
The political challenges for a multi-purpose vehicle
Tröger criticizes the proposal for imperiling a potentially meaningful project by bringing too many constituents to the table. Creating a general-purpose corporate form lets lobby groups form trade unions to public notaries take a keen interest in the political bargain, risking a barrage from all conceivable directions.
“The corporate governance and financial architecture of EU Inc. must be designed to accommodate the full range of corporate heterogeneity, most likely ending in a political compromise that allows everybody in, but serves nobody,” says Tröger.
Prof. Dr. Tobias Tröger, LL.M.
Director Cluster "Law and Finance"
