Commissioner McGrath Presents 28th Regime Proposal to European Parliament JURI Committee

Commissioner Michael McGrath presented the European Commission's EU Inc proposal to the European Parliament's Legal Affairs Committee on May 4, 2026. The presentation is recorded in the official JURI agenda, six weeks after the Commission published COM(2026) 321 on March 18.

The presentation was scheduled for 15:45 to 16:45 during the JURI meeting in Brussels. The proposal would create an optional digital corporate framework with no statutory minimum capital. Its 48-hour and maximum-EUR-100 rule is limited to the Article 16 fast track through the EU central interface using the harmonised application and EU articles templates.

Key Highlights of the Presentation

Commissioner McGrath's presentation to the JURI Committee focused on addressing the fragmentation that has long hindered European businesses. According to Justice Commissioner McGrath, the current patchwork of 27 national frameworks "complicates scaling" and "slows growth." The proposal aims to establish EU Inc as a single, harmonized corporate legal form available across all member states.

The Commission is calling on the European Parliament and Council to reach agreement by the end of 2026. That is a political target, not an adoption or launch date.

The presentation addressed several core elements of the proposal. First, the EU Inc would provide 48-hour digital registration when using standardized templates, with a maximum cost of €100. Second, the framework includes a harmonized EU-wide employee stock option scheme (EU-ESO) with deferred taxation until shares are sold. Third, the proposal enables cross-border seat transfers without dissolution, allowing companies to relocate while preserving legal identity.

"We will offer instead to innovative companies to operate all across our Union under one single set of rules."

Source: European Commission political framing

The 28th Regime Framework Explained

The Commission chose to structure EU Inc as a regulation under Article 114 TFEU, requiring only qualified majority voting rather than unanimity. This legal basis decision proved controversial. While it accelerates adoption timelines, some legal scholars argue it may invite legal challenges.

The proposal establishes a new legal form applicable in all 27 member states, but with a critical gap-filling mechanism. Article 4 of COM(2026) 321 states that matters not covered by the regulation or articles of association shall be governed by national law. Each member state must designate which national legal form's rules fill these gaps, likely resulting in Belgium using BV/SRL, Germany using GmbH rules, and so forth.

This design choice has drawn sharp criticism from corporate law experts. Professors Luca Enriques, Casimiro A. Nigro, and Tobias H. Tröger published analysis warning that "for every harmonised rule, there is room for member state discretion or a gap-filling reference to national law that quietly reintroduces the very fragmentation the regime purports to eliminate."

The following table compares key aspects of the EU Inc proposal against typical national incorporation requirements:

The proposal is legally open to all companies, not limited to startups. According to the Explanatory Memorandum, the EU Inc framework "responds in particular to the needs of startup and scaleup companies but should be legally open to all founders and companies who see it fit for their business model." Existing companies of any size can convert to EU Inc status.

JURI Committee Response and Questions

Parliament had adopted a legislative own-initiative resolution on the 28th regime in January 2026. That earlier resolution informed the debate, but it is not Parliament's first-reading position on the Commission proposal published in March.

The official procedure file lists MEP René Repasi as JURI rapporteur. On June 29 he published committee draft report PE790.143. This is the rapporteur's draft for committee work—not an adopted JURI report and not the European Parliament's position.

Critical questions raised during the legislative process include concerns about the standard templates. The actual content of EU templates is not defined in COM(2026) 321 but delegated entirely to future implementing acts under Article 8. Whether templates will accommodate multiple share classes, preferred equity, weighted voting rights, and other features high-growth companies need remains unclear.

Worker representatives and union groups have raised concerns about potential regulatory arbitrage. The European Trade Union Confederation criticized plans that could allow companies to select preferred labor, tax, and insolvency laws, warning of a race to the bottom in social standards. The proposal explicitly states it does not affect national labor law, with hiring, firing, and worker protections remaining governed by laws where employees are located.

Procedure status as of July 15, 2026

The verified public milestones are:

• March 18: the Commission published COM(2026) 321.
• May 4: McGrath presented the proposal to JURI.
• May 18: the committee referral was announced in Parliament.
• June 29: the rapporteur published draft report PE790.143.

The Legislative Observatory currently labels procedure 2026/0074(COD) “awaiting committee decision.” It gives an indicative first-reading plenary date of October 5, 2026; indicative dates can change. Parliament and Council still need to adopt their positions before any final act can emerge from the ordinary legislative procedure.

There is no official EU Inc registration date. The Commission text says the regulation would apply 12 months after entry into force. Both the substance and timing may change in negotiation, and adoption is not guaranteed.

Implications for EU Businesses and Formation

The proposal represents potentially transformative changes for EU company formation, though implementation details will determine practical impact. For startups and scaleups currently considering Delaware LLCs versus EU structures, EU Inc promises a unified alternative if the final legislation delivers on its commitments.

Founders in multiple markets face immediate strategic questions. Companies currently structured as German GmbHs, French SARLs, or Dutch BVs will need to evaluate whether conversion to EU Inc offers advantages or introduces new risks through the national law gap-filling mechanism.

For investors, the proposal's treatment of capital structures remains a critical question. The regulation enables non-par value shares and supports modern financing instruments including warrants and equity-linked instruments. However, the flexibility of the standard templates for venture-backed structures awaits implementing act clarification.

The Commission text proposes an optional EU-ESO employee stock-option scheme with taxation deferred until disposal of the acquired shares. It does not harmonise national tax rates or remove every payroll, securities and reporting obligation; the final provision may also change.

Cross-border mobility provisions would facilitate registered-seat transfers between member states. The company form would not remove local tax, employment, licensing, branch or establishment obligations created by the company's actual activities.

For legal and regulatory compliance, companies must anticipate that national gap-filling rules create 27 variants of EU Inc. According to legal analysis, jurisdictions with sophisticated capital markets may apply enabling language generously, while others may anchor on narrow interpretations. This reintroduces fragmentation risk that national court interpretation could amplify.

"The competitiveness crisis cannot be tackled with one omnibus after another. We must create a space for innovation, risk and entrepreneurship."

Source: MEP René Repasi, JURI Committee Rapporteur

Business formation advisors should monitor the legislative process closely. The Commission's proposal forms the starting point, but Parliament amendments and Council negotiations will shape the final framework. Companies with longer-term formation plans should keep a national-form fallback rather than rely on an unconfirmed EU Inc date.

What This Means for Founders and Operators

Commissioner McGrath's JURI Committee presentation marks the beginning of intensive legislative scrutiny that will determine whether EU Inc delivers on its promise or becomes another underutilized pan-European corporate form like the Societas Europaea. The political momentum is unprecedented, with European Council endorsement and end-2026 target timelines. However, the technical details embedded in COM(2026) 321's gap-filling provisions, template specifications, and national discretions will ultimately determine practical utility.

Startups evaluating EU Inc for formation should engage with the legislative process through industry associations and monitor amendment proposals closely. Investors assessing portfolio company structures need to evaluate how national gap-filling rules in preferred jurisdictions align with investment thesis requirements. Legal advisors must prepare for a dual-track reality where EU Inc coexists alongside national forms, requiring sophisticated comparative analysis.

The substantive framework is still being negotiated. The May 4 presentation was one step in that process; Repasi's June draft is a further input, not a final outcome. Founders should plan with currently available national forms and treat EU Inc as a monitored legislative option.

For updates on legislative developments, consult our comprehensive guide and track our ongoing timeline analysis. Companies considering EU Inc should complete our eligibility assessment to evaluate strategic fit against current national alternatives.