EU Inc survives the Council, but founders say it has lost its purpose

EU governments back a common company form, but the founders who campaigned for it say the changes leave unsolved the fragmentation the initiative was meant to remove.

Author: Cláudia Ascensão Nunes

Published: November 3, 2026

EU Inc survives the Council, but founders say it has lost its purpose

On October 23rd, the Council of the EU agreed on their position regarding EU Inc, a new optional company form that would allow businesses to operate under a common framework in all 27 member states [1].

The European Commission presented the proposal on March 18th. Founders would be able to set up a company entirely online in 48 hours, for less than €100, with no minimum share capital, and choose the member state in which to register it. The initiative aims to reduce the administrative obstacles to creating and expanding companies in the single market, without changing national employment and social laws [2]. The Commission asked the European Parliament and the Council to reach an agreement by the end of 2026 [2].

The Council kept online registration and the €100 cap, but restricted the EU stock option scheme, which would allow companies to pay staff with options to buy shares in the company. The scheme will be limited to companies with up to 750 employees and €150 million in annual revenue. Member states will also have 21 months to apply the new rules, instead of the 12 proposed by the Commission [1].

On employee participation, the Council kept as a general rule the law of the country where the company is registered. It added, however, that another member state where the company operates may apply its own rules if participation thresholds are exceeded there. Governments may also refuse registration on grounds such as money laundering or terrorist financing [1].

The initiative’s promoters objected to the changes while negotiations were still under way. They want a central European digital registry and common rules that allow companies to grow across borders without dealing with different national procedures, and fear the proposal will end up making it easier to set up a company without removing the obstacles to expanding it [4].

On October 15th, the EU-INC campaign, which says it has more than 26,000 supporters among founders, investors and operators [3], sent an open letter to the heads of state and government. The letter said the EU Inc they had championed ‘no longer exists’ and that ‘all that remains is fast incorporation, and that is not enough’ [4]. The campaign also objected to a compromise text from the Irish presidency which, according to its representatives, removed the central digital registry [4].

Trade unions raised different concerns. The European Trade Union Confederation warned that companies could register in countries with weaker labour protections while operating in other member states. It called for the legislation to be strengthened or abandoned, citing the risk of a ‘race to the bottom’ in pay and working conditions [5].

The proposal was the subject of 308 lobby meetings, including at least 79 with start-ups, 52 with trade unions and 37 with notaries [1].

The European Parliament has not yet adopted its position. Its Legal Affairs Committee cancelled two votes scheduled for October after political groups failed to agree on workers’ rights. A new committee vote is provisionally scheduled for November 5th and a plenary vote for November 12th [6]. Negotiations between MEPs and national governments can only begin once the Parliament has set its position [1].