Registration within 48 hours of submitting an application, a minimum share capital of just €1, a fully digital company lifecycle and simplified liquidation rules, all operating under the same, harmonised rules across the European Union – this is how the latest proposal for a Regulation of the European Parliament and of the Council (EU) on the corporate legal framework of the 28th legal system – ‘EU Inc.’ (the “Draft Regulation”). Published on 18 March 2026, the Draft Regulation represents a further step, following the introduction of the European Company (Societas Europea) and Directive 2017/1132, towards the harmonisation of company law within the European Union.

Speed and simplicity of company formation as the draft’s core principles

According to the European Commission’s communication on the Draft Regulation, it addresses the needs of innovative companies by enabling them to start operating in the European Union quickly and easily. Company registration is to take place within 48 hours of submitting the application, and the maximum cost will not exceed €100. The entire process will be fully digital – with the aim of establishing a central register for EU Inc. companies in the future. Additionally, the Draft Regulation provides for the introduction of the ‘once-only’ principle – under which it will be necessary to submit only the application for company registration, and on this basis, the company will automatically be assigned a tax identification number and a VAT number.

EU Inc. is intended to serve as an alternative to national solutions, operating within a broader package of measures

The draft Regulation is intended to form the foundation for a broader package of solutions known as the 28th (company) law system, operating alongside the national regulations of individual Member States. The proposed solutions are intended to make it easier for businesses to operate across the entire EU. Among other things, they envisage further digitalisation through the introduction of European business wallets, which is the subject of a draft Regulation of the European Parliament and of the Council (EU) on the establishment of European business wallets. Furthermore, solutions are already being introduced to streamline cooperation and the exchange of information between existing national systems and registers. An interesting proposal contained in the Draft Regulation is the introduction of the possibility of having documents translated by an ‘AI translation agent’ approved by the relevant Member State – which is intended to eliminate the costs currently borne by companies in their dealings with public administration resulting from language barriers.

Tax matters remain regulated at national level – but with a view to harmonisation

EU Inc. companies will continue to be subject to national tax laws due to a lack of harmonisation, for example in the area of CIT. In its communication on the draft regulation, the European Commission outlined a proposal to create a Head Office Tax (‘HOT’) system allowing micro, small and medium-sized enterprises operating in several EU Member States to apply the tax rules of the Member State in which their head office is located. Work on the draft Council Directive establishing a Head Office Tax system for micro, small and medium-sized enterprises, intended to introduce the HOT system, has been ongoing since 2023. Furthermore, at the same time, work began on the draft Council Directive on Business in Europe: A Framework for Income Taxation (BEFIT), which aims to harmonise the framework for the taxation of certain legal entities within the Union.

Work on EU Inc. is, in fact, only just beginning 

The publication of the draft regulation is only the first step towards the adoption of the final legislation. The EU legislator’s aim is to reach an agreement between the European Parliament and the Council on the final form of the legislation by the end of 2026 – and therefore the regulation cannot be adopted until 2027 at the earliest. However, it should be borne in mind that full effectiveness depends on progress in other legislative processes. For example, the full implementation of digitalisation will require the adoption of a regulation of the European Parliament and of the Council on the establishment of European business wallets. Similarly, in the context of document translation using an AI translation agent, it will be necessary to issue appropriate national legislation approving the relevant software. It is therefore likely that, if the legislative process proceeds as planned, it will be possible to set up an EU Inc. as early as 2028 – but it will be necessary to wait a little longer to take full advantage of the opportunities offered by this new type of entity.

Authors: Tomasz Pieczyk – Attorney-at-law, Managing Partner at SKP Law Firm, Tymoteusz Kwidziński – Legal associate at SKP Law Firm.