Heading Towards a 28th Regime in European Company Law

Within a remarkably short period of time, the idea of a 28^th regime for companies in the European Union has emerged as one of the most prominent projects on the European competitiveness agenda. According to reports by Enrico Letta and Mario Draghi, the initiative aims to reduce fragmentation of the single market and to strengthen Europe’s attractiveness as a location for innovation, capital and growth. At its core, the idea envisages an optional, EU-wide set of rules that would complement the 27 national legal systems and offer companies a uniform legal environment for their cross-border activities. However, at the same time intense political debate continues to focus on the concrete design of such a regime. Against this background, the Commission’s legislative proposal, expected in the first quarter of 2026, is eagerly awaited.

Regulation or directive? Setting the course at the heart of the debate

At this stage, the central issue concerns the question of the appropriate legislative instrument. While the Commission has not yet decided whether it will ultimately propose a directive or a regulation, leading representatives of the EU institutions have already expressed clear preferences. Both the Commissioner responsible for start-ups and scale-ups and the EU Commissioner for Justice have publicly advocated for a regulation, explicitly warning against a scenario in which Europe would end up with “27 versions of a 28^th regime”. It is argued that only a directly applicable regulation can ensure the level of uniformity and predictability required by companies operating across borders. At the same time, such a regulation would have to be based on Article 352(1) of the Treaty on the Functioning of the European Union (TFEU), which requires unanimity and could therefore result in protracted negotiations. By contrast, a directive could be based on Articles 50 and 114(1) TFEU, providing the EU legislator with a legal basis that allows for harmonisation in the field of company law through qualified majority voting. The rare suggestion of basing a regulation on Article 114(1) TFEU is not a viable option. It is dogmatically untenable, as Article 114(1) TFEU is subsidiary in the area of freedom of establishment. A regulation would create a supranational legal form that does not constitute harmonisation. Furthermore, the subsequent legal uncertainty would jeopardise progress in the overall legislative process.

Parliament takes a stand: from the ESSU to the “Societas Europaea Unificata“

In parallel, the European Parliament is working on its own preliminary draft, focusing on company law. In December 2025, the JURI Committee presented a detailed legislative own-initiative report, a tool through which Parliament can proactively exert political influence on the general planning of legislative activity and on the setting of the political agenda. However, the European Parliament’s legislative initiative is legally not binding to the Commission. In the final report, the name ‘European Start-Up and Scale-Up Company‘ (ESSU) used in the first draft has been changed. The company form is now to be called ‘Societas Europaea Unificata’ (S.EU.), a ‘unified European company’. This change of terminology reflects Parliament’s intention to extend the scope of the instrument beyond the start-up sector and establish it as a generally applicable European business label.

A harmonised national model instead of a supranational legal form

The JURI Committee's report does not envisage the creation of a new supranational company form modelled on the existing SE. Instead, the S.EU would take the form of a national company form with harmonised core elements. The legal basis for this approach would be a directive providing for a full harmonisation under Articles 50 and 114 TFEU. National legislators would be required to implement the main features of the S.EU in a uniform manner so as to ensure that an S.EU company is automatically recognised as such throughout the EU, irrespective of the Member State in which it is established.

Digital, mobile, unified: key structural features of the S.EU

In terms of content, the report sets out ambitious objectives. The establishment of an S.EU should be possible entirely digitally, ideally within 48 hours. An EU-wide standardised company identifier is intended to enhance transparency and facilitate cross-border use. In addition, the report calls for a digital platform at EU level serving as a central access point to national commercial registers and implementing the ‘prove-it-once’ principle. The S.EU is designed to facilitate transfers of companies’ registered offices within the EU, offer flexible capital regulations, including the possibility of an initial minimum subscribed capital of EUR 1, and standardise requirements for corporate groups. Unlike earlier proposals, the report does not include any restrictions on innovative companies; the S.EU would in principle be open to all non-listed corporations. Furthermore, the report calls for EU-wide standardised models for articles of association and shareholder agreements.

Protection of worker’s rights and co-determination

One area of particular sensitivity concerns workers' rights and co-determination. The report explicitly emphasises that the S.EU must not be used to circumvent national workers' rights. Once the thresholds under the law of the Member State of employment are reached, regulations on corporate co-determination should, according to the report of the JURI Committee, apply in the same manner as they do to companies operating exclusively at national level.

Digital infrastructure: improving existing registers instead of creating new EU authorities and parallel registers

The report attaches significant importance to the development of digital infrastructure. Rather than a new supranational European company register, as initially proposed in the first draft report, the S.EU is now to be built on a Europe-wide digital portal that bundles information and references existing national registers. This approach is to be welcomed. It avoids the creation of new EU authorities, builds on the modernisation of register landscapes achieved by the Digitalisation Directives I and II, and enhances interoperability through the Business Registers Interconnection System (BRIS), the Europe-wide network of national commercial and company registers.

A brand-new European business register would be more likely to generate additional problems than solutions. The existing national registers are effective and are already being strengthened by the latest legislation – the Digitalisation Directives I and II. An additional EU register would only increase bureaucracy, raise costs and create legal uncertainty.

The critical issue: a 28^th regime based solely on the existing acquis

In this context, the question inevitably arises as to how the 28^th regime can be reconciled with Europe's existing company law acquis. Today, the European Union has a high level of protection in the fight against money laundering, content and identity checks for essential company law procedures, and the reliability and publicity of register entries. Preliminary judicial, administrative or notarial controls, now codified in EU law, forms a cornerstone of legal certainty and investment protection. This high standard of preventive control must be preserved not only at the time of incorporation, but throughout all significant corporate law procedures in the life cycle of a company – in particular, share transfers and amendments to the articles of association. In this regard, notaries are indispensable gatekeepers. A 28^th regime that undermines these structures would not enhance competitiveness, but would instead increase legal uncertainty, and, ultimately, transaction costs, and would open the doors to fraud.

Simplification with risks: model documents

The proposal set out in the INL report to introduce uniform Europe-wide model statutes or shareholder agreements should be given critical consideration. Although such models may appear efficient, they are ill-suited to reflect the diversity of actual corporate structures and interests. Standardised models lead to a lack of transparency, as essential provisions are shifted into private documents that are not subject to public registration. In fact, this may even increase complexity. This type of standardisation does not lead to lower costs, but rather higher ones, because even at the formation stage, founders will not be able to manage it without legal advice. In particular ex post, once a company has been formed, the assumption that forming a company is always a standardised process will in many cases prove illusory. Increased adjustments and a higher susceptibility to litigation are therefore to be expected in a later stage.

Delaware: no blueprint for Europe

The example of company law in the US state of Delaware, often cited as a supposed model in public debate, owes its appeal not to stable protection standards, but to weak disclosure requirements and a highly specialised jurisdiction. This system is incompatible with the European understanding of company law and the rule of law. It lacks any form of preventive control and therefore does not provide reliable registers. Entries based solely on the information provided by the founders merely reproduce this information and do not reflect the actual situation. As a result, it is impossible to protect legitimate interests or make a bona fide acquisition. On the contrary, this system also generates substantial ex post costs, as every change requires costly due diligence and certificates of good standing. Therefore, Delaware cannot serve as a model for the 28^th regime, neither in terms of legal policy nor for everyday company practice. Europe should consistently uphold its core values of reliability and transparency.

Outlook: Aspirations and reality

The success of the 28^th regime will ultimately depend on its ability to make use of the existing European acquis, rather than replacing it with parallel structures. The combination of modern, efficient and digital processes is where Europe's main competitive advantage lies – a single market that enables innovation without sacrificing the reliable constitutional foundations that support investment and growth. Notaries can serve as a central point of contact for start-ups and investors, ensuring that key company law procedures involving public registers are user-friendly, secure and efficient.

The coming months will be decisive. If the European institutions succeed in coherently combining innovation, legal certainty and single market logics, the 28^th regime can make a meaningful contribution to European competitiveness.

About the author

Markus Brückner is a notary candidate in the district of the Baden-Württemberg Chamber of Notaries and works as a legal advisor in the Brussels office of the German Federal Chamber of Notaries.