The "28th regime" is shorthand for an idea that was already old when the Letta and Draghi reports brought it back into Brussels conversation: a single set of EU-level rules for companies that operate across borders, sitting alongside the 27 national regimes as a 28th option. EU Inc. is the corporate-law layer of that idea, the one furthest along the legislative process. The regime covers more than corporate law, and getting the framing right matters because the parts are negotiated separately and on different timelines.

For a plain-English explanation of EU Inc. specifically, see What is EU Inc.. For the live status of the corporate-law layer, see Timeline. This page is the wider picture.

The four layers

A company is governed by more than one body of law. Founders who only think about the corporate-law layer get surprised at the first international hire (labour), the first profit (tax), or the first failure (insolvency). The 28th regime, as policy, attempts to harmonise all four for cross-border companies. As legislation, only one layer has a finalised proposal so far.

Corporate (EU Inc.)

The company-law layer. How a company is formed, governed, capitalised, and wound up. Who its directors are. What share classes it can issue. What information sits in its register. How shares move between holders.

This layer is EU Inc., and is the most advanced of the four. Commission proposal COM/2026/321 was published on 18 March 2026. Parliament and Council are negotiating it now, with target adoption by end of 2026 and entry into force into 2027. The corporate layer is the one most founders care about and the one that determines whether you can incorporate cross-border in the first place.

Crucially, the corporate layer is being established by regulation. Regulations apply directly in member states without further national legislation. That choice is what makes EU Inc. different from earlier attempts at European corporate forms (notably the Societas Europaea), which were built on directives and ended up reshaped by national transposition. See the EU Inc. vs Societas Europaea comparison for why the legal-instrument choice matters.

Tax

The tax layer is the most politically sensitive part of the umbrella, and the part the Commission has so far stayed away from. EU Inc. as proposed does not include any harmonised tax rules. The company is taxed where its place of effective management sits, under existing OECD and EU tax law. There is no reduced rate, no special treatment, no jurisdiction shopping built into the regulation.

Whether a tax layer gets added during negotiation is the open question. Parliament's FISC subcommittee held a hearing in February 2026 on the case for a unified tax framework for EU Inc. companies. As of April 2026, no specific tax provisions have been proposed in the Council, and the Commission's stated position is that tax sits outside the file. This may shift in trilogue. We will email subscribers if it does.

For founders, the practical implication today: even when EU Inc. is law, your tax position is determined by where your team and decision-makers actually are. Substance still matters. The regulation does not let you arbitrage corporate-tax rates by registering an EU Inc. in a low-tax member state and operating from elsewhere.

Insolvency

The insolvency layer is partial. EU Inc. as proposed includes a simplified digital winding-up procedure for insolvent innovative startups, designed to fail companies quickly rather than parking them in lengthy national insolvency proceedings. This is a significant practical benefit: closing a failed startup in some EU jurisdictions today takes years and costs more than the company is worth. EU Inc. targets a defined-time procedure with digital filings and a single set of rules.

The procedure is not a full insolvency framework. National insolvency law continues to apply for solvent winding-up, for restructuring, and for any matter the EU procedure does not explicitly cover. Cross-border insolvency continues to be governed by the Insolvency Regulation (Recast), Regulation (EU) 2015/848. The 28th regime does not change that.

More detail on what closing an EU Inc. looks like in practice will sit on the Winding-up page when the regulation text settles.

Labour and EU-ESO

The labour layer is the most carefully scoped. EU Inc. as proposed does not change national employment law, social security, or co-determination. These continue to apply based on where the employee actually works. A German employee of an EU Inc. registered in Estonia is still subject to German labour law, German social security, and German co-determination thresholds. The Commission has been explicit on this, and it is also the only way the file survives the Council, which is why every published draft is careful with the language.

The one labour-adjacent harmonisation in the proposal is EU-ESO, the harmonised employee stock-option scheme. EU-ESO is technically a tax-and-securities matter rather than a labour matter, and it is bundled with EU Inc. because it solves a problem that has held back European employee equity for fifteen years: tax on option income falling due at exercise rather than at sale. For full mechanics, see the EU-ESO page.

Where each layer stands

  • Corporate (EU Inc.). Commission proposal published 18 March 2026. In Council working-party phase. Parliament's JURI committee leading. Target adoption end of 2026.
  • Tax. Not in the proposal. Parliament's FISC subcommittee considering the case for a separate file. No legislative timeline.
  • Insolvency. Simplified winding-up included in the EU Inc. proposal. Full cross-border insolvency continues under Regulation (EU) 2015/848.
  • Labour and EU-ESO. Labour explicitly out of scope. EU-ESO bundled with EU Inc., on the same legislative timeline.

Why the framing matters

Press coverage and competitor marketing often conflate "EU Inc." with "the 28th regime" and treat them as interchangeable. They are not. EU Inc. is the corporate-law piece. The 28th regime, properly framed, is the umbrella that includes tax, insolvency, and EU-ESO alongside the corporate layer. Most of the umbrella is not yet legislation.

The practical implication for founders evaluating EU Inc.: read claims about tax benefits or labour flexibility carefully. Anyone advertising EU Inc. as a way to reduce corporate tax or escape labour law has read either marketing copy or no copy at all. The regulation's text does not support those claims, and neither do the impact assessment, the European Council conclusions, or any of the working-party drafts so far.

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