The 28th Regime or EU-Inc is a proposal from the European Union to create a unique, optional, and digital corporate legal framework. Designed primarily for startups and technological SMEs, it will allow for the establishment of companies in 48 hours through digital processes, reducing bureaucracy to scale across the 27 member states. Ultimately, it is a unique and harmonized set of rules for innovative companies in the EU.
Recently, the European Commission presented the EU Inc. proposal, a set of corporate rules that constitutes the foundation and starting point of the 28th Regime of the EU. EU Inc. is the new European corporate framework. It will facilitate the creation, operation, and growth of businesses throughout the EU by incentivizing them to stay in Europe and encouraging those that “fled” to other countries in search of easier growth and consolidation to return.
Its goal and purpose are to facilitate the establishment of companies digitally within 48 hours. It does not replace national rights but adds an additional option. It aims to be a single harmonized set of corporate rules, a common legal framework for companies that are part of the innovation ecosystem in Europe.
According to the Letta Report, Europe has talent, innovation, and investment capacity, but often encounters obstacles, one of which is fragmentation during the growth stage. For many innovative companies and startups, growing across various countries within the EU means learning and applying rules, reorganizing structures, and incurring transaction costs that add no value to either the product or the business. In an environment where capital and data circulate rapidly, we need to find ways to assist them.
I personally believe that the duration of the company establishment process is not a determining factor in its viability. Whether it takes 48 hours or 48 days will not affect its launch if the project is strong. At the same time, I understand that administrations should be facilitators, not obstructionists.
What concerns me is how this measure will “mesh” with other administrative processes, such as construction, opening, and operational licenses, which generally have average timelines of several months.
But let’s look at the positives. It will undoubtedly create opportunities. It will facilitate the procedural steps for establishment, promote widespread harmonization across all EU countries, accelerate growth, enhance access to financing, foster competitiveness, and prevent companies from fleeing to other states—at a maximum cost of €100.
The European Commission, based on requests from many interested companies and the recommendations from the aforementioned Letta Report, believes that this regulation will help transform the ecosystem of innovative and technological companies. At the same time, the Single Market must also be consolidated. This market will facilitate attracting investors and financing, similar to the realities seen in other markets like the U.S. or China.
In Spain, a Working Group has been established, led by COTEC – Foundation for Innovation – and CDTI – Center for Technological Development and Innovation – to concretely assess and determine the impact on the Spanish innovation ecosystem. The mission of both entities is to promote innovation as a driver of economic and social development. Hopefully, we will see the benefits of this regulation in the short term, though I fear it will be more of a medium-term effect.
Miguel Ángel Otin LloroMiguel Ángel Otin Lloro
Secretary General, Huesca Excellent Business Forum
