ECON opinion on the proposal for a Regulation of the European Parliament and of the Council on the 28th regime corporate legal framework – ‘EU Inc’

ECON Chair

SUGGESTIONS

1. Stresses that the ‘EU Inc.’ proposal addresses several key obstacles faced by companies to operate, grow and remain within the EU and hence should be seen as a significant first step towards creating a more supportive and competitive business environment for start-ups and scale-ups in the EU. While the proposal is an important step forward, it also needs to address scalability, the phase at which the EU loses a significant share of successful firms. Therefore, further reforms will be necessary to complete the Savings and Investments Union (SIU) by reducing regulatory fragmentation, improving access to talent and capital and ensuring that innovative EU firms are not pushed to relocate outside the EU in search of more favourable conditions;

2. Considers that the 28th regime corporate legal framework – ‘EU Inc’ should be established in a way that does not potentiate EU internal market fragmentation but on the contrary fosters its integration;

3. Notes that the aim of the 28th regime is not to provide an unfair advantage, for example in tax or regulatory matters, to certain firms; underlines that appropriate safeguards should be put in place to prevent the creation of letter-box entities and regulatory arbitrage;

Free movement of capital and links with the Savings and Investments Union

4. Calls on the JURI committee to prohibit Member States from preventing or restricting EU Inc. companies from accessing multilateral trading facilities (MTFs) and regulated markets and to ensure that those companies comply with EU legislation, including all EU rules applicable to listed companies such as Stakeholders Rights Directive or the EU Company Law Directive;

5. Stresses the utmost importance to verify and guarantee that the digital register of shares and the requirements laid down in Article 54 are fully compatible with the dematerialisation of shares in Central Securities Depositories (CSDs) under the CSDR, and with their tokenisation in DLT infrastructures under the DLT pilot regime;

6. Supports the fact that the proposal does not impose minimal capital requirement for the formation of EU Inc. companies; due regard should nonetheless be given to the notion of creditor protection from the moment of incorporation onwards;

7. Welcomes the proposal’s flexibility in capital structure - particularly useful for start-ups and scale-ups, where financing rounds often require tailored arrangements; yet, stresses that sufficient flexibility should be provided to accommodate different ownership and financing models and to enable companies to access financing and attract investment, aside from the traditional bank financing model, while allowing founders to retain an appropriate degree of control over their businesses ; notes that legal protection schemes could help EU companies that wish to protect themselves from ‘killer acquisitions’; therefore, recommends inserting provisions on permanent and irrevocable asset locks as proposed in the resolution ‘The 28th Regime: a new legal framework for innovative companies’ approved by Parliament on 20 January 2026, as well as harmonised rules on an equity-like debt instrument, including insolvency rules linked to those instruments, enabling investors to invest in a company without acquiring control thereof;

8. Stresses that Commission should be empowered to develop and incentivise the use of standardised pan-EU contractual templates for convertible financial instruments, such as SAFEs/KISS, that are protective of founders and investors rights, to encourage consistent financing practices throughout the EU;

9. Underlines that the issuance of new shares should be decided by the general meeting or delegated to the board of directors; therefore, the reference to “another company body” in Article 67(2) should be removed as it creates unnecessary legal uncertainty and undermines the clarity and coherence of the governance framework of the proposal;

Free movement of payments

10. Stresses that Article 11 should ensure that, where a procedure requires a payment, such payment can be made with a credit transfer in accordance with Regulation (EU) No 260/2012 or with any other widely available digital means of payment in the Member State concerned;

11. Underlines that such payments should be subject to the applicable EU legislation (including AML and fraud-prevention rules), made via payment methods that are secure and traceable and be accepted by competent authorities;

12. Calls on the JURI committee to adopt a technology-neutral approach notably given that other means of business-to-business payments may emerge when the proposal will be applicable;

Interaction with sectorial financial legislation

13. Underlines the need to clarify the interaction of the proposal with the sectorial financial legislation, such as the interaction of Chapter X (insolvency proceedings) of the proposal with BRRD and IRRD - which should be considered leges speciales and hence take precedence; recommends adding the EU Inc. form to the legal forms of undertakings listed in Annex III of Solvency II Directive;

14. Recalls that the Multiple Vote Shares Directive allows Member States to introduce and maintain additional safeguards (e.g., sunset clause) to ensure the adequate protection of the interests of minority shareholders that do not hold multiple vote shares; stresses that those safeguards should also apply to EU Inc. companies that use multiple voting share structures;

15. Stresses the importance of a coherent interaction between the EU Inc. framework and the EU financial services acquis to support investor confidence, facilitate cross-border capital flows and contribute to the objectives of the SIU;

Tax aspects

16. Stresses that the 28th regime should be established through a modular approach, including on taxation (tax module);

17. Notes that for a tax module to be attainable under the existing Treaty framework either an opt-in structure of the relevant legislation, or enhanced cooperation as a last resort, should be considered to address tax policy shortcomings, given that tax policy remains subject to unanimity in the Council of the EU; notes that such a tax module should be designed as an optional, clear and legally secure system, open to the accession of other Member States at any time;

18. Emphasises that the scope of the tax module should be limited to, as a starting point, a subset of companies, such as cross-border growth-oriented start-ups and scale-ups, which typically generate only limited corporate income tax revenues for Member States;

19. Stresses that for the 28th regime a single, fully digital registration at the One-Stop Shop, along with the provision of a single tax number, including fully standardised documentation, templates and a single tax-filing interface, and respecting an English-first principle for communication, without compromising the EU’s other official languages, should be set by default;

20. Stresses that only companies with real economic activities within the EU should have access to the tax module and that this module should not lead to the creation of shell or letterbox companies; considers that a company for which infringement has been officially established of binding rules regarding fraud, tax, social security evasion or employee participation should be ineligible to opt in to the tax module;

21. Proposes that the future tax module should aim for a single consolidated corporate tax base and a uniform method for determining taxable income in line with OECD guidelines for participating companies across the EU; proposes, within the tax module, that the Commission should clearly specify the transfer pricing rules applicable to companies opting into the 28th regime, and include coordinated safe harbours which should apply to routine intra-group services and low-risk transactions, and harmonised approaches that should apply to intellectual property licensing and cost allocation to limit disputes, while documentation requirements should be proportionate to company size and growth stage;

22. Proposes that the consolidated tax base be appropriated among the Member States using a pre-agreed formula reflecting real economic activity, such as sales, labour, tangible assets and digital presence;

23. Stresses that double taxation must be effectively prevented through, for instance, the uniform definition and classification of capital gains, intra-regime payments or the automatic mutual recognition of tax status;

24. Emphasises that to reduce compliance burdens, regime participants must operate under a centralised VAT framework, where a single EU VAT number and digital One-Stop Shop portal must cover declarations and refunds across the Member States;

25. Highlights that cross-border capital flows within the module should be subject to a common simplified withholding tax procedure and minimum effective taxation; proposes that immediate recognition of tax residence must be achieved through a centralised EU digital registry, enabling streamlined digital clearance procedures and eliminating manual refund delays identified as a key barrier to scaling in the EU;

26. Welcomes the Commission proposal for the optional use of EU employee stock options within the wider ‘EU Inc.’ proposal and in particular its principle that taxation should occur at disposal and benefit from the same tax treatment as applicable to other employee stock options or similar instruments under national law; believes, however, that the implementation of an EU employee stock option scheme should be mandatory under the tax module; notes that gains should be treated as capital income rather than employment income;

27. Calls for a standardised EU valuation method providing safe harbour rules to determine share and stock option value in non-listed companies;

28. Calls for targeted rules to ensure tax certainty for employees who move between Member States, during the period between the granting of employee equity and the sale of the underlying shares, including through streamlined one-stop digital employer reporting as well as the avoidance of double or multiple taxation at the point of sale of employee equity;

29. Calls for harmonisation of capital gains definitions and treatment, as well as intra-regime payments or the automatic mutual recognition of tax status for prevention of double taxation and to reduce cross-border uncertainty;

30. Stresses that the tax module shall introduce appropriate coordinated and strictly conditioned tax incentives focused on research, development and reinvestment;

31. Stresses furthermore that the design of R&D incentives under the tax module must be explicitly calibrated to align with the OECD Pillar Two global minimum tax framework.