Competitiveness Council Ministers Hold First Formal Policy Debate on EU Inc - Broad Support Confirmed

On May 28, 2026, EU Competitiveness Council ministers held their first formal policy debate on the EU Inc proposal, with most delegations expressing commitment to advancing the 28th regime and meeting the European Council's target of approval by the end of 2026. The discussion revealed broad ministerial support for the digital company law framework while highlighting concerns about safeguards against fraud and the need for clarity on legal basis.

Historic First Formal Debate

The Competitiveness Council (Internal Market and Industry) convened in Brussels under the Cyprus Presidency to conduct the first ministerial-level examination of the Commission's EU Inc proposal COM(2026) 321, published on March 18, 2026. This marked a critical milestone in the legislative timeline, moving the 28th regime from technical working-party discussions to high-level political consideration.

Ministers held a policy debate on the 28th Regime Corporate Legal Framework: EU Inc, which creates an optional, fully digital company law framework allowing businesses to operate across all 27 EU member states using a single, harmonised legal form, with the possibility to create one in just 24 hours for only €100 via a fully digital platform.

The debate occurred just over two months after the European Commission published its legislative package, demonstrating the political urgency surrounding this competitiveness initiative. Prior to this ministerial session, the proposal had undergone five Council working-party examinations since March 2026, with no public readouts yet available.

"Overall, most delegations expressed their commitment to advancing this important proposal and to meeting the European Council's target of having it approved by the end of 2026."

Source: Council of the European Union, Competitiveness Council readout, May 28, 2026

Key Takeaways from the Council Discussion

The ministerial debate revealed a nuanced landscape of support tempered with specific concerns about implementation safeguards and legal clarity.

Broad Support for Digital Simplification

Ministers welcomed the proposal and emphasized the benefits of a simplified digital company law regime. The endorsement reflects recognition that Europe's fragmented corporate legal landscape creates barriers to cross-border growth. With 27 national legal systems and more than 60 company legal forms in place, it can take a company weeks or even months to set up, slowing growth and raising costs.

Emphasis on Anti-Fraud Safeguards

Many delegations stressed the need for strong safeguards to prevent fraud, tax evasion, and money laundering. This concern echoes ongoing debates within the European Economic and Social Committee's Workers' Group about potential regulatory arbitrage risks.

The safeguard discussion centered on the proposal's anti-money-laundering provisions and beneficial ownership transparency mechanisms, with several ministers seeking reassurances that the 48-hour digital registration process would not compromise due diligence standards.

Legal Basis Concerns

Some delegations underlined importance of choosing the right legal basis to ensure legal certainty in areas like taxation, minimum capital or insolvency. This technical but critical issue addresses Article 114 TFEU, the Treaty provision underpinning the regulation, and its interaction with areas of national competence.

Several delegations highlighted the importance of respecting national rules in areas like labour rights. This reflects Member State concerns about maintaining sovereignty over social policy while enabling corporate law harmonisation.

Ministerial Positions and Broad Support Analysis

The Council's positive reception represents a significant validation of the Commission's approach, particularly given the complexity of harmonising corporate law across diverse legal traditions.

Political Momentum Building

The May 28 debate builds on strong political endorsement from the European Council conclusions of March 19-20, 2026, which designated EU Inc as a priority measure within the "One Europe, One Market" roadmap and called for adoption by the end of 2026.

The timeline is ambitious. The Commission is calling on the European Parliament and the Council to reach an agreement on the EU Inc. proposal by the end of 2026. Achieving this requires both co-legislators to accelerate their examination and enter trilogue negotiations by late autumn 2026.

Divergent National Priorities

While the Council readout emphasizes broad support, national positions reveal different priorities:

Innovation-focused Member States: Countries with developed startup ecosystems, including France, Germany, and the Netherlands, have emphasized rapid adoption to stem the flow of companies incorporating in Delaware rather than the EU.

Social model defenders: Southern and Nordic Member States have stressed the importance of maintaining robust labour protections and preventing regime shopping that could undermine national social standards.

Legal system traditionalists: Countries with strong notarial systems have raised questions about the fully digital registration process and its compatibility with existing legal infrastructure.

Commission Response Strategy

Commissioner Michael McGrath, responsible for Democracy, Justice and the Rule of Law, has engaged extensively with Member State concerns. In his presentation to the European Parliament JURI Committee, McGrath emphasized that the proposal "shares the Parliament's determination to ensure that the 28th regime is not used to undermine existing rules and standards."

Next Steps in the Legislative Timeline

The May 28 ministerial debate sets the stage for accelerated legislative work across both co-legislator institutions.

Council Track

Following the ministerial endorsement, the Council working parties will intensify technical examination. Later Working Party sessions are scheduled for June 2 and June 17. These sessions will focus on:

• Finalising positions on legal basis and competence boundaries
• Developing compromise language on anti-fraud provisions
• Addressing concerns about interaction with national insolvency frameworks
• Clarifying the relationship between EU Inc and existing company forms

The Cyprus Presidency (January-June 2026) aims to deliver substantial progress, with the incoming Irish Presidency (July-December 2026) expected to drive toward a Council general approach in autumn 2026.

Parliament Track

The European Parliament's JURI Committee holds lead responsibility for examining the proposal. Rapporteur appointment is still pending. Once assigned, the rapporteur will draft amendments and steer the file through committee consideration.

The Parliament adopted recommendations on the 28th regime in January 2026, with 492 votes in favour and 144 against, providing a strong political mandate for ambitious action.

Trilogue Timeline

To meet the end-2026 deadline, trilogues between Parliament, Council, and Commission would need to commence by October-November 2026. This compressed timeline is feasible but requires both institutions to achieve internal positions by early autumn.

Implications for Startups and Scaleups

The ministerial support confirmed at the May 28 debate has concrete implications for European entrepreneurs and the broader startup ecosystem.

Regulatory Certainty Emerging

For founders considering where to incorporate, the Council debate provides increasing confidence that EU Inc will become reality. While the proposal still requires Parliamentary and Council approval, the broad ministerial support reduces political risk and increases the likelihood of timely adoption.

Companies currently weighing whether to incorporate as a Delaware LLC or national EU form may benefit from monitoring the legislative process closely, as conversion mechanisms in the proposal would allow existing national companies to transition to EU Inc status once the regulation enters into force.

Digital Registration Timeline

EU Inc would enable founding a company within 48 hours, for less than €100 and with no minimum share capital requirements, by only submitting company information once via an EU-level interface. The Council's emphasis on maintaining strong safeguards while supporting digital procedures suggests this timeline will survive legislative negotiations, though additional verification steps may be added.

Cross-Border Operations Simplified

For scaleups expanding across multiple EU jurisdictions, the proposal's promise of operating under a single, harmonised legal form addresses a long-standing competitive disadvantage versus US competitors. A startup could establish operations in multiple Member States without navigating 27 different corporate law regimes.

Investment Facilitation

The proposal includes better conditions to attract investment by removing in-person formalities, providing digital procedures for financing operations, and simplifying the transfer of shares with possibilities to access the stock exchange. For investors, this standardisation reduces legal due diligence costs and enables more efficient cross-border portfolio management.

Comparison with National Alternatives

The table below compares EU Inc proposal features with existing national company forms:

What This Means for You

The May 28 Competitiveness Council debate represents a critical inflection point in the EU Inc legislative journey. Here's what stakeholders should do now:

For founders incorporating in 2026: Don't wait for EU Inc. Incorporate under current national regimes or use Estonian e-Residency or other existing solutions. The proposal includes conversion mechanisms allowing national companies to transition to EU Inc status once the regulation enters into force, likely in 2027 at earliest.

For startups planning 2027 expansion: Monitor the legislative process closely through the official EU Inc timeline and consider whether EU Inc features align with your growth strategy. If your business model requires rapid multi-jurisdiction expansion, factor EU Inc into your incorporation planning.

For investors and funds: Begin assessing portfolio implications of EU Inc adoption. The standardised legal form could reduce cross-border investment friction and due diligence costs. Consider whether your standard investment documentation templates will require adaptation for EU Inc entities.

For legal and corporate service providers: Track the legislative amendments process to understand how final provisions may differ from the March 18 proposal. The debate on anti-fraud safeguards and legal basis clarity will shape implementation requirements. Prepare service offerings for conversion of existing national companies to EU Inc status.

For policymakers and advocates: The Council's emphasis on safeguards and legal basis clarity identifies key negotiation points. Stakeholders concerned about maintaining worker protection standards or preventing regulatory arbitrage should engage with national delegations and Parliament during the June-September examination period.

The end-2026 adoption target is ambitious but achievable. The broad ministerial support confirmed on May 28 provides critical momentum, but successful delivery requires sustained political will and technical precision in the months ahead. For European startups, the promise of a truly pan-European company form is closer than ever to becoming reality.