Europe has long prided itself on its Single Market, yet for startups and scale-ups, this promise remains largely unfulfilled. Unlike the United States, where one legal incorporation in Delaware unlocks access to all 50 states, European companies face a fragmented landscape of 27 national company laws, separate registration systems, and diverging compliance requirements. This fragmentation creates a regulatory maze that consumes time, inflates legal costs, and deters investors. As a result, many high-potential European startups choose to incorporate outside the EU, particularly in the U.S., to benefit from legal simplicity and faster access to capital. This structural weakness undermines Europe’s ability to retain innovation and build global champions.
The 28th regime directly addresses this bottleneck by introducing an optional, harmonised legal framework that coexists with national laws but enables companies to operate seamlessly across the EU under a single status. It is not an abstract legal exercise—it is a pragmatic solution designed to remove the most significant barriers to scaling within the Single Market. By centralising registration, simplifying governance, and introducing digital-native processes, the 28th regime would accelerate market entry and reduce compliance costs for growth-oriented businesses. This reform aligns with the Draghi and Letta reports, which both stress that Europe must act decisively to close its competitiveness gap with the U.S. and Asia.
One of the most transformative aspects of the 28th regime is its ability to unlock capital flows. Investors currently view Europe as complex and risky due to its fragmented legal systems, which increase transaction costs and create uncertainty in governance and insolvency scenarios. By standardising legal frameworks and issuing an EU-recognised company certificate, the regime builds investor confidence, reduces due diligence costs, and facilitates pan-European financing. Furthermore, harmonised governance and employee equity rules would make it easier to attract and retain talent—another cornerstone of scaling innovative firms. These changes create the conditions for a vibrant startup ecosystem that competes on equal footing with global hubs.
The 28th regime is also a landmark for digitalisation in EU law. It envisages a single EU-level digital register, real-time incorporation, and verifiable electronic identity for companies—steps that would dramatically reduce administrative friction. Current incorporation processes in some Member States take weeks and require physical presence or notarial acts, making Europe less agile in the digital economy. By adopting an end-to-end online model and leveraging tools such as eIDAS and blockchain-based verification, the regime sets a new standard for efficiency and transparency. Practically, this means entrepreneurs could establish an EU-wide company in less than 48 hours, mirroring the best global practices while safeguarding security and trust.
For startups, the implications are immediate: faster incorporation, lower legal costs, and simplified compliance across borders. For investors, the regime means legal certainty and predictable exit frameworks, encouraging more venture capital and private equity to stay in Europe rather than flowing overseas. For policymakers, it offers a tool to operationalise the Single Market promise and advance strategic EU objectives such as the Digital Decade, the Capital Markets Union, and technological sovereignty. Crucially, the regime incorporates safeguards to prevent regulatory arbitrage, ensuring that it enhances competitiveness without eroding national protections for labour, tax, and consumer rights.
The 28th regime is not merely a technical reform—it is a strategic lever for Europe’s economic future. It has the potential to do for business what the Euro did for trade: eliminate internal barriers and unleash scale effects across a continental market. By creating a unified legal ecosystem, Europe can retain its most promising innovators, attract global talent and investment, and position itself as a serious competitor in the race for technological leadership. In an era where economic power is increasingly tied to innovation capacity, failing to act would leave Europe at a structural disadvantage. Implementing the 28th regime is thus not just desirable—it is essential for Europe’s competitiveness and sovereignty in the global economy.
What it does: The 28th regime creates one single EU-wide legal identity for startups, replacing the need to incorporate separately in every Member State.
Why critical: Currently, expanding beyond one EU country requires separate incorporations, creating heavy legal costs, delays, and complexity. This is a major reason why many European startups choose to incorporate in Delaware, gaining instant access to 50 states instead of struggling through 27 legal systems. Removing this barrier is a prerequisite for any true single market for business.
Strategic Impact: This will cut months of setup time and thousands of euros in redundant legal fees, enabling faster expansion and increasing Europe’s attractiveness as a global tech hub.
What it does: Simplifies compliance through one digital platform and once-only principle (data entered once, valid everywhere).
Why critical: Current fragmentation forces startups to maintain separate filings, language translations, and periodic compliance in each country—costing legal and HR teams enormous time and money.
Strategic Impact: By reducing these duplicative processes, startups can redirect resources toward product development and market entry, boosting innovation speed.
What it does: Targets 48-hour incorporation through a unified EU register with digital processes.
Why critical: Time kills startups. Many innovative ideas lose value if market entry is delayed by weeks or months. Competing jurisdictions like the U.S., Singapore, and Estonia offer near-instant setups; Europe lags behind, and this delay is a competitive disadvantage.
Strategic Impact: Speeding up formation enhances Europe’s agility, allowing founders to seize opportunities quickly and investors to close funding rounds without legal bottlenecks.
What it does: Provides a standard governance baseline for EU startups, including board structure, shareholder rights, and transparency requirements.
Why critical: Today, every country has its own governance rules. Expanding across borders forces startups to adapt repeatedly, driving up legal fees and slowing expansion. Investors also face complexity in due diligence when governance varies by jurisdiction.
Strategic Impact: Harmonisation reduces legal risk, builds investor trust, and simplifies scaling across multiple countries, making Europe competitive with jurisdictions that offer predictable governance.
What it does: Introduces harmonised provisions for cross-border hiring and stock option schemes under the 28th regime.
Why critical: Startups rely on top talent, often in highly specialised fields (AI, cybersecurity). Today, hiring across EU borders means navigating multiple employment laws and tax treatments for stock options. This discourages distributed teams and remote hiring.
Strategic Impact: A uniform approach to talent mobility will make Europe a magnet for global talent, while aligning incentives for employees and founders.
What it does: Creates a trusted, EU-wide company form that investors recognise and can invest in easily, with uniform rights and protections.
Why critical: Capital markets remain fragmented; legal uncertainty discourages VC and institutional investors from funding startups in Europe. Many founders “flip” to Delaware to simplify fundraising.
Strategic Impact: By standardising the legal form and aligning it with investor expectations, the regime will unlock cross-border financing, reduce transaction costs, and keep European startups in Europe.
What it does: Consolidates legal processes into a single regulatory framework, eliminating the need for multiple local incorporations and legal contracts for each jurisdiction.
Why critical: Multi-jurisdiction expansions require expensive legal restructuring and compliance, adding tens of thousands of euros in costs per country.
Strategic Impact: Reducing these costs levels the playing field for small startups, allowing them to scale faster with limited resources and compete globally.
What it does: Provides a harmonised restructuring and insolvency process for startups under the 28th regime.
Why critical: Failure is common in innovation. Currently, insolvency processes differ by country, creating uncertainty for investors and making cross-border operations legally risky.
Strategic Impact: Predictable insolvency rules lower investor risk, improve confidence in EU ventures, and offer founders a “second chance,” increasing resilience and innovation culture.
What it does: Issues a verifiable EU company credential recognised across all Member States for banking, procurement, and contracting.
Why critical: Startups currently need to provide proof of incorporation separately in every country. This slows down cross-border deals and banking setup.
Strategic Impact: A single digital identity accelerates business transactions, financing, and partnerships, reducing friction in the Single Market.
What it does: Offers optional governance modules (asset locks, veto shares, stewardship clauses) to protect mission-driven companies from hostile takeovers.
Why critical: Many founders value purpose as much as profit. Without legal protections, mission-driven firms risk losing their vision to short-term shareholder interests.
Strategic Impact: Enables startups to scale without sacrificing purpose, attracting founders who want both growth and values alignment. This also supports the EU’s sustainability agenda.
What it does: Includes anti-abuse safeguards to ensure the regime is not misused for tax or labour law avoidance.
Why critical: Without such safeguards, political support would collapse and Member States would resist adoption. Past failures like the European Private Company (EPC) stemmed from these concerns.
Strategic Impact: Balances attractiveness for startups with regulatory integrity, ensuring a competitive but fair internal market.
What it does: Operationalises the Single Market by providing one legal framework for business operations across 27 countries.
Why critical: The EU talks about a Single Market, but legal fragmentation makes it an illusion for entrepreneurs. Scaling requires redoing everything 27 times—a structural disadvantage compared to the U.S.
Strategic Impact: The 28th regime is the most transformative legal initiative since the Euro for business. It will reduce friction, unlock cross-border activity, and position the EU as a serious global competitor in innovation.
Startups today must create a new legal entity in every EU country where they operate, because national laws govern incorporation. This leads to duplicated paperwork, notarial procedures, and language issues. The 28th regime creates a single EU-level legal status, which companies can opt into and use across all 27 Member States.
Scaling obstacle: Founders waste months and thousands of euros setting up new entities in each jurisdiction.
Competitive gap: In the U.S., one Delaware incorporation opens all 50 states. Europe lacks this uniformity, driving many EU startups to incorporate abroad.
Impact on capital: Investors prefer companies with simple legal structures; complexity reduces attractiveness and increases due diligence costs.
Immediate: Expansion from one EU country to another will no longer require creating a new legal entity.
Strategic: Companies can scale faster across the single market, improving access to customers and talent.
Long-term: Boost in EU-based unicorns. Current figures show the U.S. has ~3x more unicorns than the EU (Dealroom data), partly because of legal complexity.
Eurochambres Survey 2024: 68% of SMEs identify fragmented legal regimes as a major barrier to the single market.
Draghi Report (2024): Calls for “an EU-wide legal form allowing companies to operate in all Member States without re-incorporation”.
Principle: Opt-in legal regime via EU regulation, not a directive, ensuring direct applicability across the EU (Article 114 TFEU for internal market harmonization).
Mechanism: Establish an Innovative European Company (IEC) under the 28th regime.
Implementation:
Create a European Company Register administered by an EU body.
Use mutual recognition of legal personality in all Member States.
Implications:
No need for national registration duplication.
Adjust Rome I and Rome II regulation references for conflict-of-law issues.
Currently, startups navigate 27 different administrative systems: tax numbers, filings, governance disclosures, etc. The 28th regime proposes a single EU-level digital registration and compliance platform to replace repetitive filings in each country.
SME disadvantage: Large corporations can afford legal teams; startups cannot.
Costs: Multi-jurisdiction compliance drains resources that could fuel growth.
Time-to-market: Slower administrative processes = missed opportunities.
Compliance costs cut by up to 30–50% (estimates from Digitalisation Directive impact studies).
Faster market entry: EU aims for 48-hour incorporation target, compared to current delays of up to 4–6 weeks in some Member States.
Investor confidence: Standardized compliance = reduced risk perception.
European Commission’s Startup & Scaleup Strategy (2025): Simplification of registration is a top priority; paper targets a 48-hour incorporation benchmark.
World Bank Doing Business Index: Ease of starting a business correlates strongly with startup density and VC funding.
Principles:
Digital-by-default (Directive 2019/1151 and Directive 2025/25 as legal base).
Once-only principle: Data entered once for EU recognition.
Mechanism:
New EU regulation creating a central company register.
Integration with eIDAS for secure authentication.
Implementation:
Amend BRIS (Business Registers Interconnection System) into a single EU register.
Provide standard templates and multilingual interface.
Implications:
Streamlined AML/KYC verification at EU level.
Requires delegated acts to align notarial roles and anti-fraud safeguards.
Delays in incorporation kill startup momentum. U.S. founders incorporate in Delaware in 24 hours; in the EU, it can take weeks. The 28th regime aims for real-time or near-real-time company creation across the EU.
Innovation speed: Delays erode first-mover advantage, particularly in fast-moving sectors (AI, fintech).
Capital timing: VC investments often hinge on incorporation status; any delay can derail funding rounds.
Global competition: Asian hubs like Singapore or Hong Kong already offer same-day setups.
Incorporation in 48 hours EU-wide (per Commission target).
Acceleration of cross-border expansion: No downtime for setting up new entities.
Signal to investors: Europe becomes a competitive hub for startups, attracting more capital inflows.
Draghi Report: Calls for digital incorporation across the EU to enhance competitiveness.
Estonia Model: Real-time digital incorporation via e-Residency has been proven viable; widely cited as a benchmark in EU policy papers.
Principle:
Implement one-stop-shop digital system at EU level.
Direct enforcement through regulation (not directives) to avoid national delays.
Mechanism:
EU-level platform integrated with eIDAS and blockchain (EBSI) for trust.
Implications:
Requires recognition of EU-issued digital certificates in national courts.
Harmonization with AML Directive for automated checks.
Currently, governance requirements (board structure, director liability, shareholder rights, employee participation) differ widely across Member States. For a startup scaling to Germany, France, and Spain, the company often needs to adapt its statutes and processes multiple times.
The 28th regime introduces one harmonised governance baseline, creating predictability and legal certainty for all cross-border operations.
Cost & Complexity: Multiple governance frameworks create high legal fees and risk of non-compliance.
Investor confidence: Standardised governance boosts transparency and reduces due diligence complexity.
Talent attraction: Clear rules improve trust for employees (stock options, voting rights) across the EU.
Startups will adopt one governance model for all EU operations, simplifying expansion.
Investors can assess governance risks under a uniform standard, leading to faster funding rounds.
Employee stock options (e.g., BSPCE in France) become easier to standardise across borders, supporting talent retention.
Eurochambres (2024): Legal fragmentation is cited by 68% of firms as the #1 barrier to cross-border activity.
Letta Report: Calls for a European legal form that ensures transparent governance and access to equity incentives EU-wide.
Principle: Introduce an EU-level corporate statute (Innovative European Company – IEC) via Regulation.
Mechanism:
Standard governance modules (e.g., single-tier or two-tier board).
Unified rules for shareholder rights, decision-making, and minority protection.
Implementation:
Adopt Regulation under Article 114 TFEU (internal market harmonisation).
Optional governance add-ons (ESG, steward-ownership clauses).
Implications:
National laws remain for domestic companies, but EU-level status overrides conflicting national provisions for IECs.
Requires coordination with Rome I Regulation for applicable law.
Recruiting across borders is critical for scaling, but inconsistent labour law and social contributions make it difficult for startups to employ talent in multiple countries.
The 28th regime introduces simplified, harmonised employment provisions for innovative companies, at least for key elements like remote work and equity compensation.
Talent shortage: Startups need specialized skills (AI, cybersecurity), often unavailable locally.
Cost barrier: Hiring talent across 3–4 EU countries requires navigating 3–4 sets of employment rules.
Competitiveness: U.S. startups can hire remotely without complex legal fragmentation.
Easier cross-border hiring with reduced compliance risk.
More flexible stock option schemes, essential for retaining top talent.
Increased mobility of high-skilled professionals within the EU, reinforcing the Digital Single Market.
EIB Investment Survey (2022): 84% of SMEs cite “lack of staff with the right skills” as a major barrier to growth.
Commission Startup Strategy (2025): Prioritises easing cross-border recruitment and harmonising equity-based incentives.
Principle: Allow optional harmonised employment modules linked to the 28th regime.
Mechanism:
Define a European standard for stock options (building on BSPCE/phantom shares models).
Simplified rules for cross-border remote contracts and social security declarations.
Implementation:
Requires derogation from national labour law in opt-in cases, within limits of Article 153 TFEU (social policy competence).
Implications:
Will not replace national social protections but offers an optional harmonised layer for scaling companies.
Requires safeguards to avoid social dumping accusations.
Fragmented legal systems make cross-border investment cumbersome, as investors face differing company forms, shareholder protections, and tax regimes.
The 28th regime establishes a uniform legal form, creating a trusted and recognisable corporate identity for EU and global investors.
VC hesitation: Investors prefer Delaware C-Corp due to predictability. EU startups often “flip” to the U.S. for easier fundraising.
Cost factor: Legal complexity adds 10–15% extra costs to every cross-border financing round.
Impact: Simplifying structure attracts international investors to stay in the EU ecosystem.
More capital retained in Europe, fewer “Delaware flips.”
Lower legal and due diligence costs for cross-border investment rounds.
Increased attractiveness of EU startups to global funds (clear governance, predictable exit rules).
Draghi Report: Calls for an EU-wide form to boost VC investment by reducing fragmentation.
Dealroom (2024): U.S. attracts 2.5x more growth-stage funding than EU partly due to legal clarity and scalability issues.
Principle: Introduce standardised share classes and convertible instruments across EU under the IEC.
Mechanism:
Align capital-raising provisions with CMU objectives.
Enable simplified cross-border recognition of corporate actions (e.g., share transfers).
Implementation:
Requires uniform insolvency and exit framework (aligned with Restructuring Directive).
Apply ESMA oversight for investor protections in equity crowdfunding.
Implications:
Requires amendments to conflict-of-law principles and tax coordination for dividends and exits.
Currently, startups expanding across borders face high legal costs for local incorporation, statutory translations, notarial procedures, and maintaining multiple company entities. These costs scale with each new jurisdiction entered.
The 28th regime creates a single EU-wide legal form, eliminating redundant steps and simplifying corporate actions across borders.
Startups burn cash quickly; reducing administrative costs extends their runway.
Legal bills for cross-border restructuring or SPVs can exceed €50,000–100,000 per expansion phase.
Lowering costs makes EU a competitive alternative to Delaware or Singapore, where incorporation costs are minimal.
Cost savings of 30–50% for companies scaling to 3+ Member States (based on Commission’s Digitalisation Directive impact estimates).
Fewer delays in launching products/services EU-wide.
Increased attractiveness of EU as a global startup hub.
EIB 2022 Investment Survey: Regulatory complexity and legal costs cited as key growth obstacles by SMEs and scale-ups.
Letta Report: Simplification of company law is essential to unlock Single Market benefits.
Principle: One regulation creating the Innovative European Company (IEC) form.
Mechanism:
Unified legal documentation templates, multilingual interface.
Digital verification and filing under eIDAS.
Implementation:
Replace multiple national registrations with a central EU register.
Enable cross-border enforceability of acts (e.g., share transfers, filings).
Implications:
Requires amendment to Rome I conflict rules for applicable company law.
National notarial monopolies need optional bypass under EU law (Regulation prevails).
Startups fail often—timely restructuring or liquidation matters for investors and employees. Today, insolvency law differs significantly across Member States, creating uncertainty for cross-border operations and investors.
The 28th regime includes an optional insolvency framework aligned with best practices, ensuring predictability and reducing losses.
Investors hesitate to fund EU startups because exit and failure scenarios are unclear in multi-jurisdiction setups.
Cross-border recovery costs are high, reducing capital inflows.
Predictable insolvency rules increase investor confidence, enabling larger rounds.
Reduced risk premiums for cross-border financing.
Faster, cheaper restructuring, avoiding unnecessary bankruptcies.
Increased scale-up success rates due to second-chance policies for founders.
EC Capital Markets Union reports: Highlight insolvency fragmentation as a major barrier to pan-European funding.
Draghi Report: Urges harmonised restructuring law to unlock investment flows.
Principle: Optional application of harmonised insolvency standards under the IEC regime.
Mechanism:
Based on the EU Restructuring and Insolvency Directive (2019/1023) but streamlined.
Provides automatic cross-border recognition of proceedings for IEC entities.
Implementation:
Requires regulation referencing Article 114 TFEU for market integration.
Coordination with national courts for enforcement.
Implications:
Better protection for creditors and employees.
Reduced forum shopping and legal uncertainty.
Each Member State currently issues its own company registration number and certificate. For pan-EU operations (e.g., opening bank accounts, bidding in public tenders), startups must repeatedly provide proof of existence.
The 28th regime introduces a single EU-wide digital identity and company certificate, valid in all Member States.
Saves time and compliance costs for companies dealing with suppliers, banks, and regulators in multiple countries.
Reduces fraud risk through uniform digital verification.
Enables instant recognition of corporate status across the Single Market.
Faster access to banking and procurement processes.
Seamless cross-border transactions and compliance checks.
Lower cost of due diligence for investors and partners.
EUIPO & EBSI pilots: Demonstrate feasibility of verifiable credentials for company identity across borders.
Commission Startup Strategy: Identifies lack of trusted digital identity as a barrier to scaling.
Principle: Digital certificate anchored in eIDAS 2.0 standards for trust services.
Mechanism:
One EU Company Register issues identity and credentials.
Accessible through API for banks, regulators, and private platforms.
Implementation:
Linked to BRIS (Business Registers Interconnection System), upgraded for EU centralisation.
DLT-based integrity checks for tamper-proof records.
Implications:
National registries continue for domestic companies, but IEC companies use the EU credential.
Requires harmonisation of evidence standards in administrative law.
Many innovative startups are mission-driven (sustainability, social impact). However, EU law offers no standard framework to protect a company’s mission from hostile takeovers or profit-maximisation pressures.
The 28th regime introduces optional governance modules, such as:
Asset locks (restricting asset transfer to maintain purpose)
Steward-ownership clauses
Veto shares for founders or mission guardians.
Investor mismatch: Current structures can force mission-driven companies to compromise on values when scaling.
Hostile takeover risk: Strategic IP can be lost to non-EU acquirers.
ESG alignment: Governance features reinforce EU sustainability goals.
Startups can scale without losing control of their mission.
Enhances EU attractiveness for founders prioritizing impact + growth.
Signals trust to ESG investors, attracting new funding channels.
Nordic stewardship models and German "Stiftungsmodelle" show governance tools boost long-term resilience.
Draghi Report suggests incorporating “future-proof governance tools” for innovative companies.
Principle: Modular opt-in system under the 28th regime.
Mechanism:
Governance options embedded in the EU Company Certificate.
Transparency: Stakeholders see governance commitments digitally.
Implementation:
EU regulation sets templates for governance clauses.
Optional, not mandatory, to avoid overregulation.
Implications:
Courts enforce governance clauses EU-wide.
Recognition in takeover law harmonised via cross-reference to Takeover Directive.
A risk with a flexible EU-wide regime is companies exploiting it to bypass national protections (e.g., tax, labour law).
The 28th regime includes safeguards to prevent unfair competition while preserving attractiveness for startups.
Avoid perception of “Delaware in Europe”, which would create political resistance.
Ensure level playing field for national SMEs not opting in.
Maintain public trust and political feasibility of the regime.
Balanced regime that attracts innovators without triggering tax or social dumping concerns.
Legal certainty for governments and regulators.
Previous failures of EU legal forms (e.g., European Private Company, EPC) were due to fears of arbitrage.
Delavenne report (2025): stresses importance of anti-circumvention safeguards.
Principle: Full compliance with EU mandatory rules + non-derogable national public policy.
Mechanism:
Apply Rome I Article 21 (ordre public) for overriding provisions.
Limit scope to corporate law, governance, and digital registration (not tax harmonisation).
Implementation:
Monitoring mechanism for abusive registrations.
Automatic cross-check with AML/KYC under EU law.
Implications:
Clear boundary: tax and labour law remain largely national.
The regime focuses on simplifying company law without lowering protections.
The EU’s Single Market remains fragmented for companies because legal systems differ. The 28th regime operationalises the Single Market vision for corporate law, similar to how the Euro unified currency.
Scaling across 27 jurisdictions is slow, costly, and legally risky.
U.S. startups access 50 states seamlessly—Europe loses talent and companies to Delaware and Singapore.
If Europe wants global champions, it needs a frictionless legal environment.
Dramatic reduction in scaling barriers for high-growth firms.
Strengthened Capital Markets Union via easier cross-border investment.
Higher startup survival and unicorn creation rates, boosting EU competitiveness globally.
Dealroom data (2023): EU produces more startups than U.S. but fails to scale them due to Single Market gaps.
Eurochambres Survey: Legal fragmentation is cited by two-thirds of SMEs as their biggest barrier to cross-border trade.
Principle: Introduce a fully harmonised, opt-in European legal status through Regulation (direct applicability).
Mechanism:
Apply Article 114 TFEU as the legal base (market harmonisation).
EU-level register for all companies opting in.
Implementation:
Complement national laws (not replace).
Integrated dispute resolution via ECJ competence for IEC-related cases.
Implications:
National courts recognise IEC without additional formalities.
Sets precedent for future EU legal harmonisation initiatives.
July 30, 2025
