EU Inc. and Europe’s competitiveness challenge

While the Single Market offers the promise of operating across borders with ease, companies in Europe still face a landscape shaped by twenty-seven different national legal and regulatory systems.

In practice, this means that firms looking to grow across the EU often encounter additional costs, legal complexity and administrative burdens that make expansion far more difficult than it should be. Over time, this fragmentation has become more than a technical inconvenience. It has turned into a structural weakness for Europe’s competitiveness.

This concern has become increasingly visible in the broader debate on Europe’s economic future. Both the Letta and Draghi Reports identified legal fragmentation as a first-order structural threat and converged on a common prescription: a 28th regime, an optional, EU-wide legal framework for companies that operate across borders. The basic logic is straightforward. Instead of requiring companies to navigate a different legal framework in every Member State, the EU could offer an optional European regime alongside national ones. This would give firms the possibility to operate across borders under a single set of common rules.

In March 2026, the European Commission moved in this direction with its proposal for an EU Inc. and the initiative deserves close attention. The first noteworthy element is the choice of a regulation rather than a directive. This choice signals an effort to establish a truly common framework across the Union, instead of leaving implementation to twenty-seven different national approaches and the risk of further fragmentation. At its core, the proposal’s objective is to give companies a simpler and more predictable legal framework.

Its principal features include fully digital incorporation procedures, streamlined registration, common rules governing the entire corporate life cycle, more flexible capital and governance operations, no mandatory minimum share capital, and improved mechanisms for employee and investor participation. The proposal’s political significance lies in its approach: it seeks to deepen the Single Market by removing barriers, reducing administrative costs, and giving European firms access to genuinely EU-scale legal infrastructure.

One notable feature of the proposal is that it is not limited to a narrow category of firms. It is designed to be open more broadly, rather than reserved only for innovative companies or for businesses in specific sectors. That choice makes sense. The challenges created by fragmentation are not confined to a single type of company. They affect any business trying to grow across borders, especially at the moment when expansion becomes more ambitious.

At the same time, the proposal is not without difficulties. One sensitive issue concerns worker participation and the role of employees in company governance. This has been one of the most politically delicate questions in earlier debates on European company forms, and it is likely to remain so again. Without a credible compromise, there is a risk that negotiations become stalled or that the final instrument loses much of its original ambition.

There is also a broader legal question about how solid the framework will be once it is applied in practice. Even if the new regime is meant to create greater uniformity, its success will depend on whether it can avoid being interpreted differently across Member States. If too many gaps are left open, there is a danger that some of the fragmentation the proposal is meant to solve could reappear in another form.

These concerns are real, but they are arguments for improving the proposal rather than abandoning it. What makes this moment different from previous attempts is that the political conditions appear more favorable. The momentum generated by both the Commission and the Member States through the One Europe, One Market competitiveness agenda creates a significant window of opportunity.

In that sense, EU Inc. should be seen not as an isolated technical reform, but as one component of a broader strategy to adapt the Single Market to a more competitive and geopolitically contested world. This is precisely why the One Europe, One Market agenda matters. Its importance lies in treating competitiveness as a comprehensive project, one that brings together simplification, scale, and the removal of internal barriers across several fronts. The 28th regime addresses one crucial dimension of that agenda by making the legal environment for firms simpler, more coherent, and more European. But restoring Europe’s competitiveness requires a wider approach, one that also tackles other essential drivers such as access to finance, the cost of energy, access to talent, innovation capacity, and the broader conditions needed for firms to start, grow, invest, and remain in Europe.

Viewed in this wider perspective, EU Inc. is important precisely because it helps give institutional form to a larger ambition. If Europe wants companies not only to be founded here, but also to scale here and stay here, it must offer a framework that matches the scale of its own ambitions.