There’s a piece of news getting founders and investors excited all over Europe, and as always, when something generates this much enthusiasm, it’s worth reading the fine print. It’s called EU Inc., also known as the “28th regime”, and it’s the European Commission’s proposal to let anyone set up a company valid across all 27 Member States in under two days, for less than a hundred euros. On paper, it’s a small revolution. But if you’re considering this route to lower your tax burden, there’s one thing you need to know right away: when it comes to taxation, EU Inc. changes absolutely nothing. And understanding why is the best way to avoid making the wrong decision.

What the 28th regime actually proposes

The proposal was presented by the European Commission on 18 March 2026 and stems from a concrete problem: anyone who wants to grow a startup in Europe today faces twenty-seven different legal systems, twenty-seven tax codes and more than sixty company forms. EU Inc. aims to create a single, optional company form that sits alongside national forms without replacing them.

The figures announced are aggressive in the best sense of the word. Incorporation would take 48 hours, cost a maximum of one hundred euros, require no minimum share capital and be entirely digital. Businesses could register just once through a European interface linking the national registries, obtaining a tax code and VAT number without having to resubmit their documents. It is designed mainly for innovative startups and scale-ups, but would remain available to any founder who finds it useful.

There’s also an element that matters to anyone building international teams: EU Inc. would allow stock option plans valid across Europe, with taxation deferred to the moment of sale rather than the moment of grant. For a startup looking to attract talent without draining its cash, that’s no small detail.

Why nothing changes on the tax front

Here comes the part the enthusiastic headlines tend to skip. Taxation remains entirely a matter for the Member States. EU Inc.:

• introduces no European tax rate
• grants no tax exemption for cross-border activity
• offers no discount to those who choose the new form.

An EU Inc. company pays taxes exactly where it operates, according to the national rules of that country.

Commission officials themselves have made this clear, reassuring tax administrations on one specific point: EU Inc. cannot be used for “forum shopping”, meaning artificially shifting profits to the most favourable tax regime. European anti-avoidance frameworks remain fully in force. In other words, the new form simplifies the creation and administrative life of a company, not its bill with the tax authorities.

Anyone thinking of “becoming an EU Inc.” to pay less tax is therefore looking at the wrong tool. It’s like changing a shop’s sign in the hope that the rent will change: they’re two different things, governed by two different contracts.

Where tax optimisation really happens

If EU Inc. doesn’t touch taxes, then the real question remains the same as ever: where it makes sense for your company to be tax resident, and how it is structured in relation to your personal position. That’s where, not in the legal form, you decide how much you leave to the State and how much you keep to grow.

A founder who sets up an EU Inc. and runs it in a high-tax country will pay just like any other company in that country. The same founder, with a structure designed in an efficient jurisdiction and consistent planning of their own tax residency, can achieve a completely different result, in a perfectly legal way. The 28th regime doesn’t make the difference. Strategy does.

This is especially true for startups, where the choice of jurisdiction and initial corporate setup carries weight for years. Getting the tax structure right from day one, as provided by our Startup Package, is worth far more than any administrative shortcut. And for those thinking in terms of optimising their overall tax burden, the scope of work is that of our Tax Optimisation service, not that of a simple company form.

A proposal, not yet a law

It needs to be said clearly, because it matters for anyone planning ahead: today EU Inc. is a legislative proposal, not a company form that’s already available. The text is being examined by the European Parliament and the Member States, which aim to reach an agreement by the end of 2026. If the process sticks to this timeline, the first registrations could arrive in the first quarter of 2027, since the regulation would apply twelve months after entering into force.

This means every assessment must be made in the conditional, and the rules could change during the legislative process. Anyone making decisions today based on EU Inc. as if it were already operational risks building on ground that is still shifting.

What really matters for your taxes

EU Inc. is good news for the European ecosystem: less red tape, fast incorporation, simpler stock options. But it is not, and does not aim to be, a tax-saving tool. Confusing it with tax optimisation is the easiest mistake to make right now, and also the most expensive.

If you’re assessing where and how to structure your company to legally pay less tax, the answer doesn’t lie in a new European acronym, but in a serious analysis of your situation and your goals. What matters is understanding where your current structure stands in relation to these rules, and whether it makes sense to revise it. If you’d like, let’s talk whenever suits you.