MEPs back EU Inc company framework despite leftwing fears
The European Parliament has backed a new EU-wide company framework that promises cheaper cross-border expansion for startups, but the plan faces resistance over fears it could trigger a race to the bottom on labour rights.
MEPs voted on Thursday to advance the so-called "28th Regime", an optional corporate rulebook proposed by the EU Commission in March. The framework, commonly dubbed "EU Inc.", would allow small firms to operate across the bloc using a single set of rules rather than navigating 27 different national systems.
Under the plans, entrepreneurs could register a company online for €100 without any minimum capital requirement. The framework includes a consolidated corporate tax base, standardised tax returns and simplified VAT procedures designed to remove the administrative burden of cross-border business.
For European startups and investors, the proposal addresses a persistent barrier to scaling within the single market. Fragmented national company laws currently force growing businesses to expend significant resources on legal compliance, often pushing them to relocate to the United States. "I do not advocate to simply copy that situation, mainly because of worker rights and others, but still, we need one regime for having scale in Europe, because what is the alternative?" said Slovakian liberal Ludovít Ódor, comparing the ambition to the US state of Delaware.
Ireland, currently holding the EU's rotating presidency, is expected to be a prime beneficiary given its established appeal to Big Tech and online retail giants like Amazon and Temu. "A central focus will be progressing key legislative files to enhance the operating environment for companies across the EU," said Ireland's minister for enterprise, tourism and employment, Peter Burke.
However, the push for a unified business environment has triggered alarm among leftwing lawmakers. They warn that allowing companies to choose their registration jurisdiction without harmonising labour laws will lead to regulatory "regime shopping". Critics argue this dynamic could undermine collective bargaining agreements and facilitate social dumping.
René Repasi, the S&D lawmaker piloting the parliament's position, criticised the commission's initial proposal as "skewed towards more liberalisation without addressing the necessary European safeguards for the protection of workers and against money laundering." He is pushing to attach worker board-level participation requirements to the law, alongside provisions for steward-ownership and specialised judicial chambers.
Despite these tensions, supporters argue the economic necessity is clear. "While focusing specifically on taxation, this report supports the ultimate goal of the overall EU. Inc endeavour: to create an ambitious, yet still caring space for European talent in business, and future growth and prosperity," Ódor said.
