The Sound of Economics
What the Heck Is a 28th Regime?
Why It Matters
The 28th regime could reshape Europe’s startup ecosystem by lowering legal and cost barriers, potentially boosting innovation and making the EU more competitive with the United States. However, its broad design may trigger pushback from member states and labor groups, influencing whether the EU can achieve meaningful harmonization of business law and attract international investment.
Key Takeaways
- •28th regime proposes EU-wide fast company incorporation.
- •Proposal targets startups but applies to all firms.
- •Notary fees and advice hinder early‑stage financing.
- •Regulation chosen over directive, yet member states retain implementation duties.
- •Broad scope may dilute effectiveness for innovative scale‑ups.
Pulse Analysis
The European Commission’s March 18 "28th regime" proposal introduces an optional EU‑wide corporate instrument designed to let founders incorporate a company in as little as 48 hours for under €100. By standardising charter templates and linking digital registries, the plan promises a fast‑track route for venture‑backed startups, aiming to boost cross‑border investment and strengthen the EU’s single market for early‑stage firms.
Critics argue the regime’s open‑ended scope undermines its original purpose. While intended for young, VC‑backed companies, the legislation applies to any firm, raising concerns about labour‑law compliance, co‑determination rules, and especially costly notary services that remain a barrier for nascent entrepreneurs. Proposals such as "regime zero" advocate a narrower, startup‑focused framework to avoid resistance from unions and large conglomerates, preserving the intended innovation boost.
Implementation hurdles further cloud the initiative’s impact. Although the Commission opted for a regulation—intended to create a uniform rule across all 27 Member States—significant responsibilities, like building interoperable digital registries, stay with national authorities. This risks a patchwork of 27 variations, diluting harmonisation benefits. For the EU to compete with the United States in attracting high‑growth firms, a tightly targeted, fully digital, and truly harmonised incorporation regime is essential.
Episode Description
In this episode of The Sound of Economics, host Rebecca Christie speaks about the European Union’s innovation hopes with Bruegel’s Fiona Scott Morton and Reinhilde Veugelers as well as Tobias Tröger, SAFE Chair of Private Law, Trade and Business Law, Jurisprudence at Frankfurt’s Goethe University. The European Commission on March 18 released its “EU Inc.” proposal to make it easier for innovative companies to get their start and scale up. The new plan uses a lawmaking tool known as the 28th regime. What is it and how does it work – will it help companies find financing and navigate thickets of national and local bureaucracy? What else can you do with it? Is the Commission proposal good? What are some alternatives? And what will this mean for Europe’s notaries? Promising firms have a lot to gain from these conversations, if good policy design follows.
Relevant research:
Christie, R. (2026) ‘28th regimes to help Europe’s capital markets’, First Glance, 09 March, Bruegel.
Enriques, L., Casimiro A. Nigro and Tobias H. Tröger (2026) ‘Why the 28th Regime Proposal Falls Short of Europe's Challenge’, Oxford Business Law Blog.
Enriques, L., Casimiro A. Nigro and Tobias H. Tröger (2025) ‘Mandatory Corporate Law as an Obstacle to Venture Capital Contracting in Europe’, The CLS Blue Sky Blog.
Scott Morton, F. and R. Veugelers (2025) ‘Regime 0: Europe-wide incorporation for startups to kickstart innovative growth,’ Policy Brief 33/2025, Bruegel.
Comments
Want to join the conversation?
Loading comments...