Today, European Parliament rapporteur for the 28th regime and S&D MEP, René Repasi, is publishing his draft report on the EU Inc. proposal. The European Commission has proposed a harmonised set of corporate rules enabling companies to operate at the European level. According to the Commission’s proposal, it would be possible to create a company online for €100, with no minimum capital requirement.
The draft report builds on the European Commission’s proposal and strengthens it where it matters most. The Socialists and Democrats believe this is a unique opportunity to reduce legal uncertainty for businesses operating across borders, but only if loopholes regarding labour law and workers’ participation rules are closed, so that the proposal does not become a vehicle for circumvention and forum shopping. While the Parliament, in its own-initiative report led by S&D rapporteur René Repasi, called for a balanced proposal – which was supported by all parties of the European Parliament’s centre – the Commission’s proposal is skewed towards more liberalisation without addressing the necessary European safeguards for the protection of workers and against money laundering. Therefore, we propose ensuring that employee board-level participation follows the place where employees actually work.
Additionally, elements from Parliament’s position are included, such as allowing EU Inc. companies to become steward-owned and encouraging member states to set up specialised judicial chambers and alternative dispute resolution mechanisms, making cross-border disputes faster, cheaper and more predictable.
René Repasi, rapporteur for the EU Inc. Regulation, said:
“The Internal Market is Europe’s strongest economic instrument, yet we are still far from fully unlocking its potential. Anyone in Europe who wants to bring an idea to the market still has to navigate through 27 different legal frameworks and regulatory realities.
“A European company legal form can be more than just a simplified registration procedure. It can become a seal of quality – for founders, highly qualified professionals, and investors. This will only succeed if the new legal form not only promises legal certainty but guarantees it: through automatic recognition in all member states, fully digital procedures, and clear, abuse-proof rules. It is therefore clear that an instrument known as a circumvention tool will not be able to win the trust of either investors or employees.
“The Commission proposal clearly needs improvement in this area. The report therefore proposes, above all, strengthening employee participation in company decisions and clarifying that employees’ place of work determines the applicable labour law. Employment stock options must become true instruments to attract talent and not instruments that create working poverty.
“This position is intended to be Europe's answer to the question of how innovation is not only created here, but also remains in the Union and creates fair jobs. Competitiveness and social responsibility are not contradictory. On the contrary, they reinforce one another. That is the strength of Europe’s social market economy.”
Notes to editors:
A 28th regime was already proposed in Enrico Letta’s report to strengthen the EU’s Single Market (2024), to boost the Internal Market, and promote the growth of innovative companies in the EU.
The European Commission officially presented its proposal in March. The draft report will now be discussed in the legal affairs committee.
