EU Inc. / 28th Regime: Why It Matters for Europe’s Innovation Ecosystems

The European Commission has put forward its proposal for the new 28th Regime/Eu Inc. But what is the 28th regime, in short? What does it mean, in practice? And what will actually change for regional startup and innovation ecosystems?

The European Commission has just put forward its proposal for this new company framework for innovative companies. But if you are not a legal or policy guru, what is the 28th regime, in short? What does it mean, in practice? And what will actually change for regional startup and innovation ecosystems?

To begin with, let’s look at the names: why 28? Because it would be an add-on to the existing 27 company regimes, one per EU Member State. And why EU-Inc.? It is the name chosen to reflect the European nature of this new type of company, and it comes from its promoter EU–INC. In practical terms, they are the same thing: a new framework that young and innovative companies (i.e., startups) can use to scale across borders.

In short, it will be a voluntary scheme that new companies can choose at the moment of incorporation, eliminating the need for startups to deal with a different set of national rules every time they enter a new EU country, as they have so far.

The framework aims to create a more digital and standardised route for setting up and running a company across the EU, with simpler procedures: operations like registration, sharing company information, or dealing with investors could become simpler.

Key features of EU Inc. include:

• Faster set-up: a company could be created online in up to 48 hours, for under €100.
• Less paperwork: information would only need to be submitted once through a connected EU system.
• Fully digital setup: most company procedures would happen online.
• Easier to close and restart: failed startups could close more simply, helping founders try again.
• More attractive framework for investment and talent with different share and stock options transfers.
• Easier cross-border growth: companies could choose where to incorporate and operate more easily across the EU.
• National rules still apply: labour and social protections would remain in place.

The point is not to replace national systems, but to offer an easier route that eliminates some of the legal and administrative burden that still makes scaling in Europe more complicated than it needs to be. At the same time, it will be another step to strengthening the European Single Market, in line with the Letta and Draghi reports and with the European Commission priorities.

For startups, this clearly matters because growing in Europe can still involve too many steps, especially for young companies with limited resources. For Europe, this clearly matters because it would make the continent more attractive for innovative businesses and more competitive against well-known foreign actors.

EU-Inc and innovation ecosystems

This all matters for local innovation ecosystems, too – in particular, it could change the kind of support startups need. It is hard to make predictions at this stage but, for instance, instead of spending so many resources helping companies navigate fragmentation, innovation support actors could focus more on helping them enter new markets, connect with investors, access talent, and make the most of cross-border growth opportunities. In other words, if the new company regime delivers on its promise, it would not remove the need for strong ecosystems — but it could make it easier for them to support startups on a more genuinely European scale, while making that support even more efficient.

EU Inc. and EU innovation funding

All of the above could also impact the type of projects that innovation ecosystems and consortia will implement in the future, for instance when it comes to access to financial and support instruments.

An example is given by projects that aim to strengthen the conditions for startups and SMEs to grow across regions, like SKALE2CT and FI4INN, in which SERN is a partner. Today, they work to support regions as they improve scale-up support services or design more effective financial instruments for innovation. Much of this work still happens in a context where companies need to constantly adapt to different national frameworks when they expand.

With a 28th-regime-type framework in place, this type of project would not be any less important. But, instead of working around fragmentation, they could potentially design support that builds on a more common European pathway — for example, developing scale-up programmes that operate more seamlessly across regions, or financial instruments that are easier to deploy for companies active in multiple countries. In that sense, the opportunity would be to move from coordination and adaptation towards more transferable and scalable ecosystem support.

What’s next?

So, what changes now? For the moment, nothing. The proposal is still under discussion, and stakeholders on both sides of the EU-Inc debate have raised concerns. Some (particularly trade unions) point to potential risks around labour protections, while others (particularly startup founders and associations) argue that links to national systems remain too strong — for example, due to the absence of a single European court to settle disputes – therefore diluting the impact of the new regime.

What happens next is the most important part: the proposal will be negotiated by the European Parliament and the Council before any final version is adopted.

The Commission’s ambition is to reach an agreement by the end of the year, with the new regime becoming effective by 2028. Between now and then, the debate is unlikely to get any quieter. Startup associations, trade unions, investors, and other stakeholders will all keep pushing their priorities, which means the final text may look quite different from the proposal published today.

In other words: this is not the finished product yet — just the start of the real legislative discussion.