Executive Summary
On 18 March 2026, the European Commission published its legislative proposal for EU Inc., a pan-European company structure designed to simplify business formation and cross-border operations across the European Union. This is a historic milestone, and it reflects direct engagement and months of advocacy from the startup and small and medium-sized enterprise (SME) community.
The proposal delivers meaningfully on several core priorities: fully digital 48-hour incorporation, no minimum share capital, flexible share structures for venture capital, an EU Employee Stock Option Plan (EU-ESOP) with deferred taxation, and use of a Regulation as the legal basis for uniform application. These are real wins.
However, significant gaps remain. Tax harmonisation, cross-border hiring, employee participation rules, and dispute resolution are all left to Member States. No standardised EU convertible investment instrument has been introduced. The central EU registry has been deferred. If left unaddressed through the legislative process and national implementation, these gaps risk turning EU Inc. into another layer of complexity on top of existing national regimes rather than a simplification.
This paper sets out our detailed assessment, our key remaining asks, and our recommended next steps as the proposal moves to the European Parliament and Council.
What We Welcome:
Use of the Regulation as the Legal Form
The Establishment of EU Inc. as a Corporate Framework in Which All Companies Can Opt In
Fast and Fully Digital Incorporation
Flexible Corporate Structure
EU Employee Stock Option Plan (EU-ESOP)
Where We Continue to Push:
Establishing a Fully Integrated EU-Level Company Registry
More Ambitious Framework for Insolvency and Cross-Border Winding-Up
Tax Harmonisation
Cross-Border Hiring
Absence of a Standardised EU Investment Instrument
Dispute Resolution and Legal Framework
Employee Participation
Recommended Next Steps
The EU Inc. proposal represents the most significant advance in European company law harmonisation. It reflects real progress on priorities that matter most to founders and investors, and ACT acknowledges and welcomes that progress.
The legislative proposal now moves to the European Parliament and the Council of the EU. The co-legislative process typically takes 12–24 months, and the outcome will be shaped significantly by how Parliament and Council approach the outstanding issues. ACT urges the European Parliament and Council to take the reactions from the startup community into consideration and amend the proposal accordingly. The gaps in tax harmonisation, cross-border hiring, investment instruments, and dispute resolution are not minor technical matters; they go to the heart of whether EU Inc. can deliver the simplification it promises.
Policymakers should prioritise full harmonisation when it comes to the EU Inc. proposal. That means a centralised registry and a specialised EU court or at minimum a harmonised procedural framework. These two changes would improve the proposal exponentially.
ACT will continue to engage constructively with the Commission, Parliament, Council, and national governments to ensure that the final text of EU Inc. and its implementation delivers real, lasting simplification for founders building European companies.