The 28th regime FAQ (founder-focused)

A: It's a proposed optional EU-level company-law framework meant to reduce "27-systems" friction for innovative companies operating across the Single Market.

A: No. The Commission published the proposal on 18 March 2026, but it is not final law yet. The text can still change in Parliament and in the Council before adoption.

A: In practical terms, it is most relevant for founders who expect cross-border complexity early: hiring in more than one EU country, raising from cross-border investors, using equity more flexibly, or scaling across the Single Market without rebuilding the company structure country by country.

If you expect to stay mostly local for the next 12–24 months, a national company form may still be the simpler starting point. The legal umbrella in the political debate is "innovative companies", but the real founder question is whether cross-border friction is likely to become part of your operating model early.

A: The intent is "optional alongside national regimes", not replacement - but exact mechanics depend on the draft.

A: On 20 January 2026, the European Parliament adopted recommendations for a 28th regime and backed a fast, digital-first concept for innovative companies. That was political input into the file, not the law itself.

Primary reference: https://www.europarl.europa.eu/news/en/press-room/20260116IPR32438/eu-competitiveness-meps-propose-new-legal-framework-for-innovative-companies

A: On 18 March 2026, the European Commission published the EU Inc. / 28th-regime proposal package. This is the first actual draft legal text, so the discussion is now about the published Regulation and how it may change during negotiations.

Primary reference: https://ec.europa.eu/commission/presscorner/detail/en/qanda_26_615

A: No. The file is in the ordinary legislative procedure as a proposed Regulation. Parliament's procedure tracker lists it as "awaiting committee decision": JURI has a rapporteur and shadow rapporteurs, but there is not yet a committee mandate, Council general approach, trilogue deal, or final law.

Primary reference: https://oeil.europarl.europa.eu/oeil/en/procedure-file?reference=2026%2F0074%28COD%29

A: On 19–20 March 2026, the European Council elevated the 28th regime politically and called for it to be agreed by the co-legislators by the end of 2026, on the basis of the Commission proposal of 18 March 2026.

Since then, the Council Working Party on Company Law has started article-by-article examination, JURI has taken charge in Parliament, and COMPET ministers held the first minister-level policy debate on 28 May 2026. That debate confirmed momentum, but not agreement on the final text.

Primary reference: https://www.consilium.europa.eu/media/lwhk3itd/en-20260319-european-council-conclusions.pdf

A: Two tracks run in parallel, and both have to finish before anything becomes law. In the Council, the Working Party on Company Law is going through the proposal article by article while the Presidency circulates its own compromise texts; those sessions are closed and publish no readouts. In Parliament, JURI is working through the amendments filed against the rapporteur's draft report, and a committee vote comes before any plenary vote.

Neither institution has a negotiating mandate yet, so trilogue has not started. For the dates, documents and sources behind all of that, see the progress tracker.

A: Use:
• Progress tracker: https://the28thregime.eu/progress
• Newsletter archive: https://the28thregime.eu/blog

A: The EU's ordinary legislative procedure needs two institutions, the Council (the 27 governments) and the European Parliament, to each reach their own position on the proposal before they negotiate a shared final text.

The Council track. The Working Party on Company Law, national civil servants and legal experts, examines the proposal article by article and flags national concerns. Above it sits COREPER, which settles what the working party cannot, and above that the Competitiveness Council (COMPET), where ministers set political direction and eventually adopt the Council's position.

The Parliament track. JURI is the lead committee, with a rapporteur writing the report and shadow rapporteurs from the other political groups negotiating against it. ECON and EMPL give opinions; BUDG decided not to. JURI's committee vote sets Parliament's opening position.

Once both positions exist, the two sides enter trilogue with the Commission to agree a final text, which both institutions then formally adopt. Advisory bodies (the EESC and the Committee of the Regions) and national parliaments feed arguments in along the way, but they do not vote on the regulation. Where each track stands today: the progress tracker.

A: JURI is the European Parliament's Committee on Legal Affairs (the abbreviation comes from the French "juridique"). It is one of Parliament's permanent committees, responsible for EU legislation on company law, corporate governance, civil law, intellectual property, judicial cooperation in civil matters, and the rule of law.

For the 28th regime, JURI is the lead committee. That means the rapporteur, the MEP assigned to write Parliament's draft report on the proposal, sits in JURI, and it is JURI's committee vote that sets Parliament's opening position in the negotiation with the Council.

Where the committee has got to, with dates and documents: the progress tracker.

Official links:

JURI committee home page

EU Inc. legislative file (Parliament procedure tracker)

A: The rapporteur is the MEP assigned by the lead committee to write its draft report on a proposal. In practice, the rapporteur is Parliament's lead negotiator: they set the opening position and lead the trilogue discussions with the Council.

For the 28th regime, the rapporteur is René Repasi (S&D, Germany). He also led Parliament's January 2026 own-initiative report on the 28th regime, so he is not starting from a blank page. Each political group additionally names a shadow rapporteur to negotiate against his text.

The current shadow-rapporteur roster and the state of the report: the progress tracker, or directly at the EP procedure file.

A: On this file JURI is the lead committee, but two other Parliament committees give a formal opinion on the parts that fall in their area. ECON is the Committee on Economic and Monetary Affairs, and EMPL is the Committee on Employment and Social Affairs. A third committee, BUDG (Budgets), decided not to give an opinion.

An opinion is not binding: JURI writes Parliament's actual position and can take the suggestions on board or leave them. But the opinions shape the debate, because they carry the view of the MEPs who specialise in finance (ECON) and in jobs and labour law (EMPL).

ECON has delivered its opinion. It backs the proposal as a first step and asks JURI to go further on two things in particular: to let EU Inc companies reach public markets, which runs against the draft report's ban on public listing (see Article 60), and to add an optional tax module for cross-border start-ups and scale-ups.

EMPL has now delivered its opinion too, and it pulls the other way. It would limit the new form to start-ups and scale-ups that are not publicly listed, keep it out of a list of sectors including construction, agriculture, hospitality, transport and care work, tie board-level worker representation to the country where people actually work rather than the country of the registered office, and leave pay, pensions and social security with national law. The two committees now ask JURI for close to opposite things, which is the argument JURI has to settle.

Adoption dates, vote counts and the documents themselves: the progress tracker.

A: Trilogue is the informal negotiation between the Council (represented by the rotating Presidency), the European Parliament (represented by the JURI rapporteur and shadow rapporteurs), and the European Commission (which facilitates and guards its original text). Trilogues are where the final text is actually shaped; they are not public and produce no readout until a deal is struck.

For the 28th regime, trilogue cannot start until the Council has adopted its position and Parliament has a negotiating mandate. Neither exists yet. Presidencies do state target dates publicly, and those are worth knowing, but a target is not a scheduled stage: both mandates have to exist first. Current state: the progress tracker.

A: EU-Inc is an ecosystem proposal and advocacy blueprint.
The 28th regime is the EU policy initiative that the Commission must translate into draft legal text.
EU-Inc influences debate; it is not itself law.

A: It's a detailed founder-centric blueprint (registry + fundraising docs + EU-wide equity tooling), which makes it a natural reference point.

Links:
https://www.eu-inc.org/
https://proposal.eu-inc.org/

A: The main target is cross-border company-law friction. Today, founders run into different share-class rules, different incorporation mechanics, different equity practices, different transfer formalities, and repeated explanations of a local company form to investors, hires, and counterparties in other countries.

The proposal tries to reduce that company-law friction by creating one optional EU-wide form with one core rulebook. It does not remove the national layer everywhere, especially on tax, employment, payroll, and regulated activity, but it aims to make the company-law layer more portable and more legible across borders.

A: Partly. The proposal creates one optional EU-wide company form with one core rulebook and a digital EU-level registration route. But it does not remove national systems entirely. An EU Inc. would still be registered in the business register of the Member State chosen for its registered office, and matters not covered by the Regulation would still fall back to national law in that Member State.

A: Potentially, yes. The published proposal is much more concrete than before: it includes multiple share classes, non-par shares, flexible instruments for future equity, digital share transfers, and fewer formalities around subscriptions and transfers. That could make founder-investor documentation and financing rounds easier across borders. But in practice, "easier" will still depend on what survives the legislative process and how quickly investors, lawyers, and national systems adopt it.

A: Yes, within limits. Article 68 expressly allows an EU Inc. to issue convertible instruments, warrants, and other instruments entitling their holder to new shares. It also says who can approve them: normally the general meeting, unless the articles of association authorise the board to do so up to a defined ceiling.

That matters because the draft is not treating future-equity instruments as an awkward workaround outside the company form. It builds them into the capital rulebook itself, including the later issuance of new shares when those instruments are exercised or converted.

What it does not do is create a single EU-wide SAFE template or remove all national interpretation questions. The text clearly covers convertibles, warrants, and similar rights to future shares. A SAFE-like instrument is directionally supported where it functions that way, but founders still do not get full cross-border certainty from Article 68 alone.

Primary source: COM(2026) 321, Article 68.

A: Under the Commission's text, partly; under the rapporteur's draft report, no. Article 60 is the draft rule on whether an EU Inc. can reach public markets or similar trading venues. The Commission's version says an EU Inc. cannot be blocked from trying to have its shares traded on certain organised venues, provided it meets the applicable Union and national rules. The clearest protected route there is a multilateral trading facility (MTF), which is a lighter market venue than a main stock exchange listing.

The second route is narrower. For a regulated market, the proposal does not create an automatic EU-wide right to list. It says an EU Inc. may seek admission only where the Member State's national law provides for that possibility, and only if the company also meets the applicable Union and national requirements.

An MTF includes lighter trading venues such as SME Growth Markets. A regulated market is the stricter main-market category used for full exchange listings. That distinction is why Article 60 is controversial. Critics argue that the current wording could let a very flexible company-law form move too close to public markets without enough matching safeguards.

The core concern is regulatory arbitrage. If EU Inc. keeps the flexibility of a startup-oriented private-company form while also reaching trading venues, some companies could try to avoid capital-maintenance or governance rules that usually surround listed companies. So the real debate is not simply whether EU Inc. can reach markets, but on what terms and with what safeguards.

The rapporteur's draft report proposes to reverse Article 60 entirely. Under it, the shares of an EU Inc. would be tradable neither on an MTF nor on a regulated market, and a company that wants a listing would first have to convert into a national public limited company. That would make the EU Inc. a private-company form by design. It is an opening negotiating position, not adopted text, and the listing question is likely to be one of the most contested points in committee. Our analysis: inside the European Parliament's draft report.

Primary source: COM(2026) 321, Article 60.

A: This is now one of the clearest parts of the draft. The proposal includes an EU employee stock option plan (EU-ESO). The key feature is timing of taxation: the warrant would not be taxed at grant, vesting, or exercise, but only when the shares received from it are sold. That is more concrete than the old political messaging. But the wider tax environment around companies and employment still remains largely national.

It is also one of the most worked-over chapters in the negotiation. Member states have written comments into the Council's own drafting table, and MEPs have filed dozens of amendments on the stock-option articles, so the detail here is likely to move. Our full read: employee stock options and the EU-ESO.

A: The Commission proposal is a Regulation based on Article 114 TFEU, the EU's internal-market harmonisation legal basis. That matters because, if adopted in that form, the core company-law rules would apply directly across the EU rather than being rewritten separately in 27 national transpositions.

Parliament's January 2026 position pointed to Articles 50 and 114 together and preferred a Directive. So when people talk about "Article 114" on this file, they are really talking about the legal route, how uniform the final regime could be, and how vulnerable the draft may be to challenge if the legal basis is contested.

This is not academic. Ministers have linked legal-basis certainty to sensitive areas such as taxation, minimum capital, and insolvency, while also stressing national labour-law safeguards, and several member states have questioned the choice in writing. It is still only a proposal at this stage, so Parliament and the Council can amend both the substance and the legal framing before anything becomes final.

A: The regulation covers company law only. The Commission's own proposal states explicitly that its tax provisions "are not intended to harmonise the fields of taxation" - they are limited to one specific area: employee stock options.

The one tax provision: under the EU-ESO scheme, taxation of employee warrants is deferred to the time the shares are sold (no dry-run tax charge at grant or vesting). This is a harmonised rule across all member states for EU-ESO warrants only.

For everything else - corporate tax rate, loss relief, R&D incentives, transfer pricing - EU Inc. companies are taxed under the law of the member state where they are registered. Where you incorporate still matters for tax.

A parallel tax workstream is open and has moved: Parliament adopted an own-initiative report on the feasibility of a 28th tax regime in July 2026, and the commissioned study behind it proposes treating tax elements as separate "building blocks" rather than folding them into this regulation. Neither is law. An own-initiative report is a political signal that binds nobody, and a commissioned study is advice to a committee. There is still no legislative proposal for an EU tax regime, and tax measures need unanimity in the Council, a materially harder threshold than the qualified majority behind this regulation. The documents are on the Resources page.

A: Yes, both directions, under Article 21 of the draft Regulation.

Into an EU Inc. An existing national company can convert domestically (a GmbH becoming an EU Inc. registered in Germany), through a domestic merger or division, or across a border. The Regulation sets the destination; the procedure itself, board and shareholder resolutions, creditor and minority-shareholder protection, notarial steps and registration mechanics, stays with the national law of the converting company. Cross-border operations run through the existing EU company-mobility directive, which already provides creditor protection, minority safeguards and employee-participation negotiations.

Out of an EU Inc. An EU Inc. can switch back into a national limited-liability company in the Member State where it is registered. Landing in a different Member State's national form has no simple one-step route in the draft; the safer reading is two steps, move the EU Inc. across the border first, then convert into the local form there.

Two limits worth knowing now. A company must have been registered for at least two years, or have two approved sets of annual accounts, before a domestic conversion, merger or division, so a newly incorporated company cannot convert immediately. And the Regulation is company law only: it creates no tax neutrality, so the tax consequences of converting in or out follow national law and the existing EU merger directive.

Country-specific conversion checklists, starting with GmbH to EU Inc., will appear on the Templates page once the implementing rules for digital registration are adopted.

A: The European Council set end-2026 as a political target, and COMPET ministers have kept that ambition in view. The machinery behind it is real: JURI has a rapporteur, a draft report and the amendments filed against it, and the Council has been in technical session since spring.

That still does not make adoption certain. No Council position has been adopted, and the hard points are all live: safeguards and fraud prevention, the legal basis, where tax stops, minimum capital, insolvency, and protection of national labour rules.

And "agreement" is not the same as founders being able to register an EU Inc.: the rules apply only after an application period that is still being negotiated, and the digital registration mechanics depend on implementing acts that come later. Track the Progress page for live status.

A: Consider the 28th regime if you expect cross-border friction early: hiring in multiple member states, investors across borders, multiple share classes, branch expansion, or a structure you will need to explain repeatedly outside one country.

A local company form is probably simpler if your team, customers, payroll, tax position, and financing plans are all concentrated in one country for now, and you need legal certainty immediately. EU Inc matters most when cross-border complexity is likely to become normal rather than occasional.

A: Probably not urgently. If the next 12–24 months are mainly local, the simpler move is usually to pick the national form that best fits your current fundraising, hiring, governance, and tax reality.

EU Inc becomes more relevant when your legal and operational friction starts coming from cross-border growth rather than from the core business itself. That is why this site tracks both the law and the practical use cases, not just the politics.

A: If you need to operate now, don't pause your business for an unfinalised law. Instead:
• choose the best current jurisdiction for your fundraising + hiring reality,
• document your cross-border pain points (these become negotiation "evidence" later),
• follow the watchlist so you can reassess when the draft appears.

A: In principle, yes. Article 21 of the draft Regulation provides explicit conversion routes for existing national companies. Starting with a national form now does not close the EU Inc. route later, and the reverse direction is also open if priorities change.

In practice, any later switch still involves real legal and tax work, not a one-click migration. A company also has to have been registered for at least two years, or have two approved sets of annual accounts, before a domestic conversion is allowed. For the full mechanics, see Can a GmbH (or other existing company) convert to EU Inc.?

A: Subscribe to the watchlist:
https://the28thregime.eu/

A: Independent tracker project. Not affiliated with EU institutions.

A: Not as a "promise today". Over time, we plan to add practical readiness tools and collaboration formats once draft text exists. For now, the focus is clean tracking + primary sources. If you are interested in the services or have idea on cooperation, reach out via contact form.

A: Yes - send sources/corrections via:
https://the28thregime.eu/contact