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Legal Disclaimer Notice

The EU-INC team gratefully acknowledges the input received from [Firm/Lawyer Names] on specific legal aspects addressed in this document. Any such input was limited in scope and should not be understood as constituting legal review or endorsement of the document as a whole. The views and conclusions expressed remain those of the authors.

This document does not constitute legal advice and should not be relied upon as such. Readers should consult qualified legal counsel for advice on specific matters.

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Executive Summary

The ‘EU Inc’ is a proposed optional pan-European company form. The Commission published its draft Regulation (COM(2026) 321) under Article 114 TFEU in early 2026 (referred to as "Proposal" or "Regulation" throughout the text). Negotiations in the Parliament and Council are ongoing. This FAQ document sets out the position EU-INC is campaigning for based on the Proposal from the European Commission, and may be helpful to answer questions about the company form created as a result of this Proposal.

The Proposal does not create a single European corporate law or supranational standard that sits alongside 27 jursidictions. Instead, it creates an optional partly harmonized company form, the ‘EU Inc’, integrated into each of the 27 national legal systems. However, what it delivers is a choice of registered office and, critically, it includes the codification of non-discrimination principles already established by decades of EU case law into binding statutory provisions that every Member State must respect.

The architecture rests on a clear separation between two layers. The corporate-law layer (where the company is incorporated, its articles of association, share structure, and governance) follows the registered office. The operational layer (where taxes are paid, employees are protected, social-security contributions are made, and codetermination applies) follows the activity. A company incorporated in Ireland but employing thousands of people in Germany pays German tax on its operations in Germany and applies German labor law to its workforce in Germany. The registered office changes none of that.

This separation is what, we believe, makes free choice of registered office workable. Member States do not lose tax revenue or regulatory reach through the corporate seat; they continue to compete for talent, investment, and economic activity on their territory, exactly as they do today. The most important feature of the Proposal is therefore the combination of two things: the freedom to choose any Member State as the registered office, and the non-discrimination principle that prevents host Member States from blocking, restricting, or conditioning market access on where an EU Inc is registered. Without that combination, the Proposal risks creating 27 divergent national standards, each deferring half of the company-law framework to local rules and local courts. With it, founders gain what Europe currently lacks: one single set of corporate law rules available in every Member State, so that the choice of where to register no longer becomes a source of fragmentation and a single European standard can take hold.

The Regulation is a corporate-law instrument only. It does not change labor law, worker protections, codetermination, social security, or taxation. The existing frameworks that protect those interests, including Rome I for employment law, the Posted Workers Directive, the ATAD and Pillar Two for tax, national codetermination statutes, and the full EU anti-money-laundering acquis, remain in force and apply to EU Incs exactly as they do to any other company. The Regulation sits on top of these frameworks; it does not replace them.

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A note on how to read this FAQ

This is an advocacy document. It sets out the positions the EU-INC community is advocating for in the ongoing negotiations on COM(2026) 321. The Regulation has not yet been adopted, and it remains a Commission proposal under co-decision between the European Parliament and the Council. Where existing EU instruments are cited, those instruments are in force today and apply independently of whether the EU Inc Regulation is adopted.

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The four things we want from this Regulation

If you take four things away from this FAQ, take these:

1. Free choice of registered office. Founders register in any Member State, regardless of where their team sits. Host Member States cannot block, demand local authorization, or require local representation just because the company is registered elsewhere.
2. EU-level registry and digital infrastructure. Register online in 48 hours for under €100. A centralized EU-level registry connected to BRIS and AML infrastructure provides a single incorporation standard, digital share register, and compliance framework across all 27 Member States.
3. Labor rights, codetermination, and taxation stay local. Employment law, social security, wages, codetermination, and taxation follow the worker, the workplace, and where the company operates — not the registered office seat. Where a company registers does not change which labor rules apply. Codetermination is addressed through conflict-of-laws principles, not as a constraint on seat choice.
4. No linking of any activity to the registered office choice. Neither employee headcount, operational activity, nor any other metric should determine or constrain where an EU Inc may register. The registered office is a company law concept; operational compliance follows the activity, not the seat. </aside>

🗂️ Who should read what

Background

The EU-INC community supports the EU Inc as a company law instrument. Employment and labor matters, including codetermination, are governed by the national laws of the Member State where workers are employed and are outside of the scope of the EU-INC campaign. This is and has been a fundamental principle for EU-INC from day one.

This FAQ explains how EU-INC believes those concerns should be addressed.