EU competitiveness ministers on 28 May 2026 diverged sharply over the proposed 28th Regime (EU Inc.), with Austria, Bulgaria, France, Luxembourg, Malta, and Sweden opposing the inclusion of tax and insolvency rules and arguing for a narrower company-law scope, while Estonia, Poland, and Spain backed broader harmonization. The debate, held at the Competitiveness Council, also saw Austria, Estonia, and Sweden question the legal basis under Article 114 TFEU, with Austria requesting a formal opinion from the Council Legal Service.
On safeguards, Romania, Germany, Croatia, and the Netherlands insisted on strong preventive controls against fraud and money laundering, while Estonia and Lithuania prioritized fast digital incorporation. Minimum capital requirements split delegations: Czechia and Sweden favored zero capital, but Austria, Bulgaria, and Malta warned of a race to the bottom. Chapter 10 on insolvency faced reservations from Austria, Estonia, and Finland, who urged its deletion.
European Commission Executive Vice-President Valdis Dombrovskis presented a five-pillar simplification agenda, while Commissioner Michael McGrath introduced EU Inc. as a voluntary digital company form for startups. Commissioner Stéphane Séjourné reviewed the single market strategy, late payments, and the European Product Act, which gained broad support from the Netherlands, France, Germany, and others for updating product rules and tackling e-commerce challenges.
On the European Competitiveness Fund, Poland, Latvia, and Croatia demanded pan-European distribution, while Denmark insisted on excellence-based allocation. The Presidency aims for a partial general approach on the Fund in June and progress on e-declaration.
Startups and SMEs would benefit from lower incorporation costs under a narrow scope but face legal uncertainty if tax and insolvency are excluded. Investors and creditors would see reduced protection without harmonized insolvency rules, while national administrations would bear compliance costs under broader harmonization. The legal basis dispute could delay the proposal, affecting all parties.