Author: Aleš Rod
On 18 March 2026, the European Commission presented a proposal for a regulation on the so-called EU Inc., forming the core of the planned “28th regime”. This is a voluntary, unified corporate framework that would operate alongside national legal systems and is primarily aimed at startups and fast-growing innovative companies. The key question is whether it will strengthen Europe’s competitiveness – or simply add another layer of bureaucracy that businesses have long criticized.
The proposal introduces several practical simplifications: Fully digital company incorporation within 48 hours at a cost of up to €100, no minimum capital requirement, a single legal framework applicable across the internal market, and significantly easier establishment of branches in other Member States. It also includes more flexible rules for employee stock ownership plans (ESOPs), with the aim of allowing taxation to be deferred until gains are realized.
From an economic perspective, the proposal responds to the long-standing fragmentation of Europe’s business environment. The existence of 27 different legal and regulatory regimes, combined with high administrative costs and uncertainty around cross-border expansion, remains a major barrier. This partly explains why many European (and often Czech) startups choose to relocate their legal domicile or holding structures, most commonly to the United States or the United Kingdom.
At the same time, the potential of the 28th regime should not be overstated. A key limitation is that taxation and social security systems remain largely within the competence of Member States. Without deeper coordination in these areas, there is a risk that, instead of genuine integration, new forms of regulatory arbitrage will emerge – like those already seen today.
For the Czech Republic, as well as other CEE states, the initiative can serve as a useful complement to ongoing domestic reforms, particularly in the area of ESOPs and broader support for the startup ecosystem. Its actual impact, however, will depend on how effectively national measures are aligned with the European framework and whether regulatory uncertainty for companies operating across borders can be reduced. If implemented well, this could provide a meaningful boost for the Czech Republic and others to strengthen its position on the European startup map.
Overall, the 28th regime represents a step in the right direction towards greater integration of the EU’s business environment. Its real impact, however, will ultimately depend on the legislative process and the extent to which existing fragmentation can be reduced. If successful, it could become one of the few European initiatives that genuinely helps startups compete globally. If not, it risks becoming another well-intentioned but only marginally effective measure – adding yet another layer to Europe’s already complex regulatory environment.