The case for a complementary EU Inc. Zone
Over 24,000 founders, investors, and tech leaders signed the EU Inc. petition. Parliament endorsed the vision. The Commission proposed a regulation. The momentum is real — but the risk of fragmented implementation is serious, and a complementary architecture deserves consideration.
The Commission has proposed a new European company form — the "EU Inc." The regulation is the right idea, and it delivers real improvements: digital incorporation within 48 hours, no minimum capital, harmonised employee stock options, simplified liquidation procedures.
Yet the proposal presents some distance from Draghi's original vision. Article 4 defers all gaps to 27 national legal systems. Court specialisation is recommended, not required. The registry connects 27 national systems through BRIS rather than replacing them. Some of this distance reflects genuine Treaty constraints — taxation requires unanimity, labour law is constitutionally excluded. Some reflects choices that were narrower than some commentators expected. The result: the regulation gives every Member State the same corporate law text — but not necessarily the same corporate law experience.
The EU Inc. harmonises the corporate form — a genuine achievement. The operating environment, however, remains fragmented. As a founder, you would still face:
Tax and employment are the same in both scenarios. Neither the regulation nor the Zone can unify them without Treaty-level unanimity. The Zone's value is in the rows above — where it replaces twenty-seven with one.
The Societas Europaea tried harmonised rules before — and produced fewer than 4,000 registrations in two decades, of which only a quarter were genuine operating companies. Garicano and Malmendier warn of "27 different 28th regimes." The DIFC, ADGM, and AIFC demonstrate the alternative: purpose-built institutional frameworks that compete on quality, not tax. Created under different governance conditions — but the design principles (procedural certainty, judicial specialisation, administrative unity) are transferable through enhanced cooperation. Delaware's Court of Chancery illustrates the same logic domestically: one specialised court, one body of case law, one registry. Predictability attracts capital.
● = clear structural advantage ◑ = same in both — honest about limitations
What the Zone does not do. It does not harmonise tax systems. It does not override local employment law for remote workers. It does not replace all national administrations. It does not bypass the CJEU. It provides unified corporate law administration — one court, one registry, one set of procedures — within a bounded space.
Trust is what matters — and it takes years. Delaware took decades to build the Court of Chancery's reputation. No founder or investor will choose a new jurisdiction over Delaware, Singapore, or the UK on day one. The Zone's structural advantage: one specialised body builds a coherent body of case law faster than 27 national courts developing 27 independent traditions. But in the first 5–10 years, this remains an uphill battle. The Zone is a long-term bet on institutional quality, not a short-term fix.
Independently from what Parliament decides — whether it follows Draghi's more ambitious vision or adopts the Commission's current proposal — a fallback plan built around a Zone is an opportune measure. If the regulation is ambitious and succeeds, the Zone is never activated. If the regulation is ambitious but fragments across 27 administrations, the Zone provides an immediate alternative path. If the regulation remains conservative, the Zone offers a way to deliver results now rather than waiting for a future legislative cycle. In every scenario, having a pre-validated complementary architecture ready is better than not having one.
The paper proposes four amendments to COM(2026) 321, currently before the JURI Committee, operating on two tracks:
Track one — strengthen the regulation
1. Mandatory specialised judicial chambers — replacing "calls on" with "shall designate," with convergence tools (shared case-law database, joint training, annual guidelines)
Track two — prepare the fallback
2. A 12-month feasibility study — producing a pre-validated, shelf-ready Zone architecture
3. Annual fragmentation reviews with hard KPIs — and automatic activation if thresholds are breached
4. Enhanced cooperation pathway — nine or more willing Member States can proceed at any time
The Zone scales through three phases: Phase 1 — self-contained company law supplement + arbitration centre + registry (can begin as soon as the feasibility study validates the design). Phase 2 — enhanced cooperation formalises the framework when demand justifies it or annual reviews trigger it. Phase 3 — specialised court under Article 257 TFEU, when jurisprudential maturity is proven.
The regulation itself embeds annual fragmentation reviews. If divergence exceeds pre-defined thresholds, the pre-validated fallback activates automatically. No new political decision needed. If the regulation works, none of this is ever activated. An insurance policy, not an alternative.
Parliament voted 492–144 for rules "the same throughout the EU." The Zone is one possible mechanism to help deliver on that mandate. Special Economic Zones already operate across the EU — Shannon, Madeira, the Canary Islands. The Zone, established via enhanced cooperation, requires only willing states. The real sovereignty risk is not a complementary institutional framework — it is founders incorporating in Delaware because no European alternative offers comparable certainty.
The 28th regime is the right idea.
It deserves complementary anti-fragmentation infrastructure
to ensure it delivers — not 27 divergent implementations of the same framework.