The Senate of the Kingdom of the Netherlands has formally concluded that the proposed EU INC. corporate legal framework regulation does not comply with the principles of subsidiarity and proportionality, according to an opinion submitted to the Council of the European Union on 24 June 2026.
The opinion, issued as a cover note to the Council, targets the Proposal for a Regulation on the 28th Regime Corporate Legal Framework – EU INC. (document references 7498/26, ADDs 1-6 – COM(2026) 321). The Dutch Senate found that the proposal violates both the principle of subsidiarity, which holds that the EU should act only when objectives cannot be sufficiently achieved by member states, and the principle of proportionality, which requires that EU action not exceed what is necessary to achieve treaty objectives.
The EU INC. proposal, introduced by the European Commission, aims to create an optional 28th corporate legal form – a supranational company statute available alongside national forms – to simplify cross-border business operations and reduce compliance costs for companies operating in multiple member states. The Dutch Senate's objection represents a significant national-level pushback against the expansion of EU corporate law, raising questions about the proposal's future in the Council.
The opinion triggers the subsidiarity review mechanism under Protocol No. 2 of the Treaty on the Functioning of the European Union, which requires the Commission to reconsider the proposal if a majority of national parliaments issue reasoned opinions. The Dutch Senate's intervention adds to a growing list of member state concerns over the EU INC. framework, which has been debated in the European Parliament's Legal Affairs Committee in recent months.
For EU businesses, particularly small and medium-sized enterprises, the EU INC. could reduce administrative burdens and legal costs when operating across borders, but the Dutch objection may delay or alter the proposal. For national governments, the subsidiarity challenge reinforces member state sovereignty over corporate law. For the European Commission, the objection tests its ability to advance harmonisation in company law. For legal practitioners and corporate advisors, uncertainty over the proposal's fate may affect planning for cross-border structures.
The Commission must now respond to the Dutch Senate's reasoned opinion, potentially amending the proposal or providing a detailed justification for its compliance with subsidiarity and proportionality. The Council and European Parliament will continue their legislative work, with the Dutch objection likely to influence negotiations.