The 28th regime: Unlocking growth with European rules

DIGITALEUROPE welcomes the European Commission’s initiative to establish a 28th regime, a voluntary legal and administrative framework for businesses operating across the EU. As proposed in the Letta report, European startups and scaleups need a simplified and uniform legal framework that allows them to focus on growth rather than paperwork.

This regime must offer speed and certainty for entrepreneurs and investors and, at the same time, ensure a level playing field with existing companies in areas such as taxation, commercial and consumer law. To make the regime practically useful, it must clarify how it will interact with existing national regimes and not create additional complexity or uncertainty where mandatory national legislation remains applicable. 

The 28th regime should provide: 

• A simple EU corporate form, with no eligibility criteria or capital requirements; 

• Incorporation within 48 hours, fully digital and paperless; 

• Support through standardised model documents, e.g. shareholder agreements, to speed up company formation and reduce legal costs; 

• Flexibility in ownership structures and business models; 

• Dedicated funding and investment support; 

• Specialised courts and conflict resolution mechanisms, including English-language options; 

• Fair interaction with existing national regimes and a level playing field for all companies in terms of legal obligations; and 

• Aligned insolvency procedures. 

The 28th regime must drive valuable reforms whose benefits should extend to all companies across Europe, not just those established under a new EU corporate form: 

• Full application of the digital-by-default and once-only principles for setting up and operating companies. This could be realised through an EU business register or better integration of national registers, allowing for real-time filings and automated data exchange throughout a company’s lifecycle; 

• Increased coordination of national tax procedures and implementation of coordinated tax incentives for cross-border innovation by Member States; 

• Greater convergence of employee stock option schemes across Member States to help attract and retain key talent; 

• Simplified employment and social security coordination for cross-border hiring and remote work; and 

• Creating demand by modernising procurement to enable innovative companies to scale. 

The 28th regime must be matched by broader burden reduction efforts. These include the already proposed sustainability omnibus, an ambitious European Competitiveness Fund, the future European Business Wallet, the harmonisation of insolvency rules and the Listing Act, and – crucially, for Europe’s tech competitiveness – an ambitious digital omnibus. Its success also hinges on progress with the Savings and Investment Union, the Union of Skills, the European Innovation Act, stronger use of procurement for innovation and coordinated taxation measures.