On 18 March 2026, the European Commission (EC) unveiled the EU Inc., a new European legal entity designed to operate under a single regulatory framework across all 27 EU Member States. The proposal aims to make cross-border business operations within the EU easier by enabling companies to be established quickly and entirely online, at low cost, and without the need for a notarial deed or minimum share capital. In doing so, the EC seeks to reduce legal fragmentation within the Single Market and strengthen the position of European start-ups and scale-ups in comparison with other major economies.
EU Inc.: A European Beginning with a National Exit?
Businesses are operating increasingly across borders, yet the legal infrastructure within which they operate remains largely organised at national level. This tension lies at the heart of the discussion surrounding the proposed EU Inc., a new European corporate form intended to help businesses raise capital more easily, scale more effectively and operate seamlessly across borders.
According to the European Commission, legal fragmentation within the European Union remains a significant barrier to growth. Companies are still required to navigate 27 different legal systems. Through the EU Inc., the EC aims to reduce this complexity and create a more uniform legal foundation for businesses operating within the EU.
Exit procedures
Niet alleen groei, maar ook uittreding krijgt in het voorstel expliciet aandacht. Een effectieve ondernemingsvorm vereist immers niet alleen een eenvoudige start, maar ook een werkbaar einde of exit. De EC verwacht dat in het komende decennium ongeveer 300.000 ondernemingen gebruik zullen maken van de EU Inc. En in een functionerend ecosysteem hoort daar onvermijdelijk ook het falen van ondernemingen bij.
Two routes to exit
The proposal introduces two exit mechanisms. For solvent companies with no assets or liabilities, a fast-track procedure would allow them to be removed from the commercial register within approximately three months. This process would not require the appointment of an insolvency practitioner. Even where limited debts remain, the procedure could still be used, provided creditors consent. The approach bears similarities to the Dutch turbo liquidation procedure, involving limited formalities and a central role for management.
In addition, the proposal introduces a simplified insolvency process for innovative start-ups. The rationale is that these businesses often have limited resources and face a relatively high risk of failure. The proposed procedure has a lower threshold for access, fewer formalities, and an accelerated winding-up process in which claims are generally deemed accepted unless challenged. Where no assets of economic value are available, the estate may be closed immediately.
The proposal aligns with a broader European policy approach whereby the costs of failure should not unnecessarily hinder innovation. Faster and more proportionate procedures are intended to facilitate an orderly wind-down without lengthy proceedings. Failure is therefore positioned as an inherent part of innovation.
Harmonisation Has Its Limits
Although the EU Inc. is presented as a harmonised framework covering the entire corporate lifecycle, insolvency remains largely dependent on national law. Member States differ significantly in their approaches to creditor protection, directors’ liability, employee rights and the role of insolvency practitioners. As a result, insolvency and winding-up proceedings may still produce markedly different outcomes from one jurisdiction to another.
This raises the question of whether the EU Inc. will genuinely deliver greater uniformity or, in practice, simply coexist alongside existing national regimes. For businesses that do not qualify for the fast-track procedure or the innovative start-up regime, national insolvency law will in any event remain decisive.
Relevance for General Counsel
This tension is particularly relevant because international businesses routinely operate across multiple legal systems simultaneously. In cross-border situations, it is often the interaction between European frameworks and national rules that determines the practical legal reality.
The EU Inc. demonstrates the European Union’s commitment to further harmonisation and provides a clear indication of the direction in which the Single Market is developing. At the same time, significant uncertainties remain, particularly in relation to insolvency and its interaction with national legal regimes. For that reason alone, this is a development worth following closely.
Conclusion
Whether the EU Inc. will ultimately result in a simpler European framework for cross-border businesses remains to be seen as the legislative process unfolds. Its success will depend in part on whether companies can rely on a more uniform European mechanism for restructuring, dissolution and insolvency.
What the proposal does demonstrate is that the drive towards harmonisation is gaining momentum, even as national differences continue to play a decisive role at critical moments such as restructuring, dissolution and insolvency.
