René Repasi publishes draft JURI report on EU Inc with new worker protection and anti-abuse safeguards

René Repasi (S&D, Germany), rapporteur for the EU Inc proposal in the European Parliament's JURI Committee, has published a draft report introducing comprehensive worker protection safeguards and anti-abuse measures to the Commission's March 2026 proposal. The draft allows registration extensions to investigate fraud, excludes low-innovation sectors like construction and hospitality, mandates that board-level worker participation follows the place of employment rather than registration, and introduces employee share ownership provisions alongside stock options.

The draft report marks Parliament's first formal text-level position on Commission proposal COM(2026) 321, representing a significant intervention to reshape the EU Inc framework before trilogue negotiations begin. Repasi's amendments reflect persistent concerns from trade unions and Social Democrat MEPs that the Commission's original proposal could enable "forum shopping" and undermine national labor protections.

Overview of Repasi's Draft Report

According to Repasi's political group, the draft report was published on June 29, 2026 , just days ahead of the July 17, 2026 amendment deadline in JURI. The timing positions Parliament's negotiating stance well before the anticipated September committee vote.

"I am convinced that my changes will make EU Inc even more attractive," Repasi told Science|Business. "They ensure that EU Inc will become a seal of quality and discourage all those founders that solely want to make use of the country-of-origin principle with the intention to circumvent protection standards."

The draft builds on Parliament's own-initiative report from January 2026, where MEPs voted 492-144-28 in favor of the 28th regime concept with specific safeguards. That earlier resolution, also led by Repasi, called for a balanced proposal and was supported by all parties of the European Parliament's center , creating political momentum for stronger protections.

Unlike the Commission's proposal, which promised 48-hour, €100 online setups with minimal barriers, Repasi's draft introduces targeted friction mechanisms designed to prevent misuse while preserving speed for legitimate businesses.

Key Worker Protection Provisions

The draft report's worker protection measures directly challenge the country-of-origin principle at the heart of the Commission's proposal.

Board-Level Participation Rights

The most significant change mandates that board-level worker participation rights must follow the place of employment, applying the highest national protection threshold across Member States . This reverses the Commission's approach, which would have allowed companies to avoid co-determination requirements by registering in member states with minimal worker representation rules.

In practice, an EU Inc registered in Ireland but employing workers in Germany would need to comply with German co-determination law if German thresholds are higher. This prevents regulatory arbitrage on one of the most sensitive labor law issues in continental Europe, particularly for Germany, where works councils and supervisory board representation are deeply embedded in corporate governance.

Employee Stock Options and Share Ownership

Repasi added a warning about the risk of circumventing mandatory domestic protections and stressed that employee stock options should be voluntary and must not be used to replace salaries. The draft also introduces the idea of employee share ownership, which would allow companies to offer stock ownership directly as part of compensation packages .

"I believe that an employee who receives shares in his employer's company should also receive the voting rights that come along with it," Repasi said, explaining that the new scheme also allows employees not only to pay for stocks in cash but also to receive them as a "top-up" to their labor .

This dual approach responds to competing pressures. European startups have long sought employee equity schemes to compete with US counterparts, while labor unions warned that stock options could become a vehicle for wage suppression.

Labour Law Application

The report proposes clarifying that employees' place of work determines the applicable labour law, and strengthens employee participation in company decisions . This place-of-employment rule prevents companies from using EU Inc to impose less favorable terms on workers by registering in low-protection jurisdictions while operating elsewhere.

Anti-Abuse Safeguards Proposed

Repasi's draft introduces multiple layers of anti-abuse protection that go substantially beyond the Commission's original text.

Sector Exclusions

The draft report allows registration extensions to investigate fraud and excludes low-innovation sectors like construction, transport, and hospitality . The report stresses the right of EU countries to impose rules on EU Inc participants and gives the Commission the power to keep a list of non-innovative economic activities that are likely to circumvent national labour laws and should be excluded from EU Inc. Examples could be "cleaning activities, hospitality services or residential care activities," Repasi said .

These exclusions represent a clear political compromise. While Repasi rejected calls from trade unions to limit EU Inc solely to startups and scale-ups, citing concerns that forced corporate form changes during scaling could slow growth, he instead targets sectors most likely to engage in regulatory arbitrage.

Enhanced Registration Controls

While the Commission promised 48-hour, €100 online setups, Repasi's draft report allows registration extensions to investigate fraud . This modification preserves the digital-by-default principle while creating space for competent authorities to conduct enhanced due diligence when red flags appear.

The balance here is delicate. Commission proposal COM(2026) 321 removes notary requirements entirely and caps registration fees at €100, positioning EU Inc as faster and cheaper than national alternatives. Repasi's amendments maintain that speed for legitimate incorporations while introducing investigatory authority for suspicious cases.

Limitations on Country-of-Origin Principle

The report limits the country-of-origin principle to prevent corporate forum shopping . Repasi said the current proposal "opens the door wide open to regime shopping," referring to the practice where companies opt for a location with lower taxes and wages .

By constraining forum shopping, the draft addresses one of the core concerns raised by the EESC Workers' Group during stakeholder consultations in 2025 and early 2026.

Dispute Resolution System

The report introduces a swift online dispute resolution system . This addition recognizes that cross-border operations will generate conflicts requiring rapid resolution, but attempts to channel disputes through structured mechanisms rather than forum shopping between national courts.

Comparison with Commission's Original Proposal

The Commission's March 18, 2026 proposal envisioned EU Inc as a voluntary, digital-by-default framework enabling companies to register online within 48 hours for under €100, with no minimum capital requirement and automatic recognition across all 27 member states. The proposal applies to companies of all sizes and ages, allowing both new incorporations and conversions from national forms.

Repasi's amendments preserve that core architecture while adding targeted constraints:

Speed and cost: The Commission's 48-hour and €100 targets remain, but with investigatory extensions permitted for fraud concerns.

Scope: Both texts allow companies of all sizes. The Commission rejected startup-only limitations as administratively burdensome; Repasi instead uses sector exclusions to target abuse risk.

Worker rights: The Commission's text applies national labor law via Article 4's gap-filling mechanism but maintains country-of-origin principles. Repasi explicitly overrides this for board participation and clarifies place-of-work rules for employment law.

Evaluation criteria: Repasi expands the list of criteria the Commission should use to evaluate EU Inc's success , likely including worker protection metrics alongside business formation statistics.

Winding-up procedures: The draft broadens the scope of simplified winding up proceedings for start-ups rather than 'innovative start-ups' , removing definitional complexity while maintaining the simplified insolvency framework for younger companies.

The fundamental tension is political. Pascal Canfin, shadow rapporteur for Renew Europe, welcomed the draft report's attention to labour law and fiscal safeguards, stating "EU Inc should be a proof of strong European start-ups that wish to scale in Europe, not of letterboxed companies" , but signaled amendments on sector exclusions.

This positions the September JURI vote as a test of whether Parliament's center can hold. The January 2026 own-initiative report passed with 77% support, but adding binding legal constraints to a Commission proposal raises the stakes.

Next Steps and Timeline for JURI Vote

According to the European Parliament, JURI rapporteur René Repasi's draft report is expected July 23, with amendments due July 17 and a committee vote anticipated in September .

The Legal Affairs (JURI) Committee will hold an initial exchange on the file in mid-July , providing MEPs and shadow rapporteurs the first opportunity to debate Repasi's amendments in committee format.

The July 17 amendment deadline will reveal the scope of political disagreement. Shadow rapporteurs from EPP, Renew, Greens/EFA, and ECR groups can table competing amendments, and the volume and content of those amendments will determine whether September's committee vote produces a strong mandate or a fragmented text requiring extensive compromise.

The Commission, Parliament, and Council all maintain the objective of reaching agreement by the end of 2026 . Ireland assumed the Council Presidency on July 1, 2026, and will chair negotiations through December , positioning Ireland's Presidency as the final window for political agreement.

The parallel Council track continues through the Council Working Party on Company Law, which has held twelve sessions examining the technical details of COM(2026) 321. Sessions are scheduled for July 2, 8, and 23 , running in parallel with Parliament's amendment process.

If JURI votes in September with a strong majority, Parliament enters trilogues with negotiating leverage. If the vote is narrow or heavily amended, Council and Commission will have more room to resist Repasi's safeguards.

What This Means for Stakeholders

For entrepreneurs evaluating EU Inc, Repasi's draft introduces friction but also legitimacy. If adopted, worker participation and labor law safeguards will make EU Inc less attractive for regulatory arbitrage, but more credible as a long-term corporate form recognized by investors, employees, and regulators across member states.

For investors, the draft resolves uncertainty around employee equity. The dual stock option and share ownership framework, combined with voting rights for employee shareholders, creates a more predictable equity structure than the Commission's silent treatment of these issues.

For workers and trade unions, the place-of-employment rule and board participation safeguards represent significant wins, constraining the forum shopping that dominated concern during EESC consultations. The sector exclusions target the highest-risk industries directly.

For member states with strong labor protections, particularly Germany, the draft removes a major political objection. Co-determination rights apply where workers are employed, not where companies are registered, neutralizing the competitive threat to national industrial relations systems.

For member states competing to attract EU Inc registrations, the draft limits differentiation strategies. Estonia or Ireland cannot offer "light touch" worker participation if the company operates in Germany. Competition shifts from labor law to corporate law, tax treatment, and business environment.

The September JURI vote and subsequent trilogues will determine whether these safeguards survive or are diluted. Track all legislative developments on our live timeline, and assess whether EU Inc suits your business using our eligibility tool.