The European Commission's proposal for a Regulation establishing the EU Inc. - the so-called "28th regime" for European company law - marks one of the most ambitious initiatives in European company law since the creation of the Single Market: the first genuine attempt to develop a directly applicable body of European company law conceived not merely to coordinate national systems but to strengthen the global competitiveness of European enterprises.
The rationale lies in Europe's structural "scale-up gap": Europe accounts for a leading share of global scientific output, yet remains significantly less successful than the United States in translating innovation into globally competitive companies, with too few start-ups evolving into unicorns, the overwhelming majority of venture capital financing coming from non-European investors and too many promising European firms ultimately relocating, reincorporating or seeking listing outside the Union. Against that background - and echoing the Letta and Draghi Reports - there are compelling reasons to reconceive company law as an active instrument of industrial policy, complementary to the Savings and Investment Union: while the latter seeks to mobilize European savings, EU Inc. provides the legal infrastructure through which that capital can be effectively deployed.
Five guiding principles emerge as central to the shaping of the Regulation: EU Inc. should operate as a genuinely self-standing European regime, minimizing recourse to national law and avoiding discretionary Member State choices in implementation, with no national "model" designated by way of analogy; contractual freedom and statutory autonomy should be recognized as constitutive components of modern corporate governance; the Regulation should preserve its universal vocation, remaining available to every European undertaking irrespective of size, sector or stage in the life cycle - including companies accessing public capital markets; while universally available, the regime should expressly accommodate the distinctive needs of innovative start-ups and scale-ups; and substantive rules must be complemented by a coherent enforcement framework capable of ensuring their uniform application.
On universality, the Commission's decision not to confine EU Inc. to start-ups or high-growth companies deserves strong endorsement: reserving the new form for a specific category of undertaking would have reduced its transformative potential to that of a niche experiment and would have run counter to the historical logic of European company law, which has consistently developed through legal forms designed for the economy as a whole.
Universality must, however, be reconciled with the distinctive governance and financing needs of innovative start-ups and scale-ups: the Regulation should accommodate - and protect throughout the life of the company - the internationally recognized contractual techniques on which venture capital transactions routinely rely, including preferred shares, liquidation preferences, anti-dilution and drag-along clauses, founder vesting arrangements, employee share option plans, convertible instruments and simple agreements for future equity (SAFEs).
European entrepreneurs seeking international investment should not be forced to reincorporate under non-European legal systems simply because those systems offer greater contractual certainty and governance flexibility. The Commission's template initiative should accordingly be extended beyond articles of association to include model shareholder agreements, and governance arrangements validly adopted under the Regulation should benefit from a strong presumption of validity insulating them from subsequent reinterpretation through national legal doctrines.
Underpinning these proposals is a deeper regulatory shift, and one of the most innovative features of the initiative: a move away from prescriptive mandatory rules towards enabling rules that reward private ordering - to be understood not as deregulation but as a different technique for combining a limited set of mandatory principles with broad statutory autonomy. Because EU Inc. is designed as a self-standing European regime, its long-term success depends on the Regulation and the articles of association remaining the primary sources governing the company, with national law confined to a genuinely residual role: otherwise, the Union risks producing not one European corporate regime but twenty-seven national versions of EU Inc., reproducing precisely the fragmentation the proposal was designed to overcome.
The same concern extends to enforcement. Recital 81 of the proposal encourages Member States to designate specialized judicial chambers for EU Inc. disputes but stops short of requiring them to do so: that recommendation should be upgraded into a mandatory obligation, complemented by joint training programmes for judges, a dedicated European case law database and, in due course, the possible establishment of a specialized European court. In parallel, the Regulation should expressly permit EU Inc. companies to submit corporate disputes to arbitration through an arbitration clause in the articles of association, with a degree of transparency of anonymized awards to allow a coherent "arbitral jurisprudence" to develop over time. A related compromise in the proposal also warrants revisiting: while EU Incs. must be admitted to trading on multilateral trading facilities and SME growth markets, their listing on main regulated markets is left to Member State discretion. Since the Commission's own impact assessment recognizes that unrestricted access to capital markets would produce "the strongest positive impact on the functioning of the internal market and on the competitiveness of the EU", the co-legislators should require Member States to permit listing on regulated markets as well and, through a companion Regulation, develop a single European rulebook for listed EU Incs. in areas already substantially harmonized (prospectus, market abuse, shareholder rights, corporate transparency, takeovers and auditing), supervised at Union level by ESMA.
The proposal warrants strong support, coupled with concrete calls for refinement. EU Inc. should be measured not by the number of companies incorporated under the new regime, but by whether European entrepreneurs increasingly choose to establish and grow their companies within the Union, whether European start-ups succeed in attracting international venture capital without relocating outside Europe, and whether investors come to regard the new form not as an alternative national company law but as Europe's natural corporate language.
Having built a Single Market for goods, services, capital and persons, the Union should now build a Single Market for companies: EU Inc. offers a unique opportunity - and one that Europe and its Member States should seize - to take that step.
