The European Parliament’s Legal Affairs Committee has endorsed a set of recommendations aimed at establishing a new legal framework to support innovative companies across the European Union. The committee approved the recommendations with 18 votes in favor, four against, and one abstention.
The proposed framework, referred to as the “28th corporate regime,” seeks to create harmonized rules for small and medium-sized enterprises (SMEs), including startups and scaleups. According to Members of the European Parliament (MEPs), these changes are intended to facilitate cross-border mobility, attract investment, and promote innovation within the EU by aligning company law with current business needs.
Central to the proposal is the creation of a new harmonized corporate structure called the Unified European Company (S.EU). This entity would be registered digitally within 48 hours and operate as a non-listed limited liability company based in any of the 27 EU member states. The structure would allow businesses to move their headquarters between countries without needing to dissolve or re-establish themselves. The minimum paid-in capital required would be one euro, and its use would not be restricted solely to innovative firms.
MEPs have also called for a digital multilingual portal that could either be newly created or integrated into existing platforms. This portal is intended to simplify digital processes for S.EUs, enable communication with authorities, and provide information for investors.
To ensure access to capital for S.EUs, MEPs highlighted the importance of alternative financing models beyond venture capital. They recommended that harmonized rules should help attract diverse investments.
Additionally, MEPs advocated for EU-wide regulations on employee financial participation through mechanisms such as employee stock ownership plans and stock options. They also suggested that S.EUs benefit from accelerated dispute resolution procedures that could be conducted in English.
Following the committee vote, rapporteur René Repasi (S&D, DE) stated: “The 28th corporate regime is an essential piece of the puzzle for completing our internal market. If we want Europe to compete globally, we must ensure that great ideas are not only born here but have the space to grow, attract investment, and scale in the EU, without becoming a vehicle for circumventing the social fabric of our member states.”
The next step will see this legislative initiative report put forward at an upcoming plenary session of Parliament.
Parliament’s priorities on this matter are expected to inform an official legislative proposal from the European Commission. MEPs are requesting that this proposal be submitted by early 2026 and backed by adequate budget allocations.
