For years, Europe’s founders have had to navigate 27 different company law regimes just to expand across the Single Market. EU Inc. was designed to fix that, and now, the Parliament has had its first real say on how well the Commission’s proposal delivers.

On 29 June 2026, the European Parliament’s Committee on Legal Affairs (JURI) published its draft report on the EU Inc. proposal, with René Repasi (S&D) as rapporteur.

We take a closer look at what the draft report gets right and where it still falls shorts from the startups community’s asks.

The Good: What the draft report gets right

The rapporteur’s draft builds constructively on several of ACT’s core asks, keeping with the 28th regime’s founding principles.

  • Core digital-first architecture is preserved. The report keeps the fully digital, 48-hour incorporation period, the €100 fee cap, and the harmonised EU templates for articles of association, maintaining the fast, low-cost, digital-first formation process the startup community has been advocating for.
  • The EU-ESOP framework is strengthened, not diluted. The draft adds Employee Stock Ownership Plans (EU-ESOPs) alongside the original stock option scheme, giving founders more tools to share equity with their teams.
  • A real step forward on dispute resolution. The draft introduces an out-of-court dispute settlement mechanism for business-to-business disputes, together with comprehensive information on costs, and encourages Member States to set up specialised judicial chambers. It is paired with a public database of EU Inc. case law. This is something that ACT has been calling for over the past months, and we will keep pushing for a dedicated EU-level court, to ensure a fairer and more horizontal approach.
  • A brand-new EU Inc. digital platform. The draft adds an entirely new chapter creating an open-access digital platform, interoperable with the e-Justice portal, BRIS, and the EU central interface. It would offer multilingual, step-by-step registration guidance, information on dispute settlement options and financing opportunities, and access to the case-law database, including an AI-powered search tool and a notification system for changes to national laws. This wasn’t in the Commission’s original proposal and directly responds to the need for a one-stop, accessible information hub SMEs and founders require to actually use the regime.

The Bad: What still needs to be improved

Even though several of ACT’s main asks have been picked up in the draft report, real gaps remain.

  • No minimum harmonisation of tax and employment rules. The draft doesn’t include this at all. National tax and social security law will keep governing EU Inc. companies exactly as before, and an EU Inc. company wishing to hire in a Member State other than its registered office will still need to set up a local branch or subsidiary to do so.
  • Proposing a physical presence requirement. The draft deletes Article 103(2)(c), which had explicitly banned Member States from requiring a local representative or physical presence to complete a procedure needed to take up or exercise an economic activity, or to obtain an authorisation. Removing this safeguard leaves the door open for Member States to impose exactly the kind of local-presence requirements that force EU Inc. companies into branches or subsidiaries just to operate cross-border, unfortunately reinforcing the structural disincentive to pan-European hiring and operations that ACT flagged in its assessment of the Commission’s original text.
  • A list of excluded economic activities: The draft adds a new Annex listing economic activities considered unlikely to develop a product, service, or process that significantly differs from previous iterations. An EU Inc. company simply cannot be formed around any activity on that list. This risk creates a new source of legal uncertainty at the point of formation.
  • The fast-track formation deadline can be extended with no real limit. The text allows the two-working-day registration period to be extended ‘by the time strictly necessary’ whenever additional checks are needed due to a higher risk of fraud, abuse, or money laundering. The safeguard itself is reasonable, but as drafted there’s no hard deadline on the extension and no requirement for authorities to document or justify why the additional time was needed. This will leave room for the process to run indefinitely in practice, undermining the very speed guarantee the regime is built around.
  • Still no push for a full EU central registry. The draft keeps the Commission’s model intact: an EU central interface that connects to, rather than replaces, national company registries. No amendment moves toward the single, EU-level registry that we called for.
  • Access to public markets is weakened, not expanded. The draft report also deletes provisions related to the admission of EU Inc. companies to trading on a regulated market and adds a new requirement that an EU Inc. company must first convert into a public limited company under Union or national law before it can seek admission to trading at all. Neither restriction existed in the Commission’s original text, and together they add friction for the later-stage, high-growth companies EU Inc. is meant to serve.
  • The 10-year startup ceiling may be too rigid. The new Article 2 definition caps ‘startup’ status at fewer than 100 employees, €10 million in annual turnover or balance sheet total, and less than 10 years since registration. This definition determines which EU Inc. companies can access the simplified insolvency proceedings. ACT supports extending simplified winding-up beyond innovative startups to all EU Inc. companies, but a hard ceiling at year 10 risks excluding companies that are still scaling and still need this procedure, potentially penalising exactly the kind of innovative startups the regime is meant to support.

Conclusion

The draft report shows that the Parliament has heard the asks from the startup community: preserving the fast-track mechanism, establishing an out-of-court dispute resolution mechanism and the EU-ESOP framework are on the table. The report embeds 246 amendments and reflects input gathered from a wide range of stakeholders, including business associations, trade unions, notary bodies, and academics.

But the gaps that matter most to founders, like tax harmonisation, cross-border hiring, a real central registry, and now new hurdles like the physical-presence and the excluded-activities list, still need to be addressed.

Shadow rapporteurs from the other political groups have until 17 July to table their own amendments, after which the file moves into negotiations within the JURI Committee. The Parliament is expected to vote on its position in October, with the Council running its own parallel process in the meantime. If timelines hold, the final adoption is expected by the end of the year. ACT shared its proposed amendments to shadow rapporteurs to close these gaps, and we will keep engaging with the Parliament and the Council to make sure EU Inc. delivers the simplification it was designed for.