Petar Ganev and Radovan Ďurana // 10 December 2025

This paper examines the European Commission’s proposal for an optional “28th Regime”, a single, EU-wide corporate framework intended to reduce regulatory fragmentation and strengthen Europe’s competitiveness.

Despite decades of Single Market initiatives, firms expanding across the EU continue to face divergent national company laws, burdensome administrative procedures, and high compliance costs that slow market entry and scale-up.

The analysis shows that a voluntary EU corporate track could offer meaningful benefits for startups and scaleups by streamlining incorporation, simplifying governance, and reducing cross-border legal uncertainty. Expert assessments rate the proposal positively, with a confidence-weighted score of 7.07/10, the strongest result recorded by the EU Regulatory Observatory to date.

However, the paper argues that the success of the 28th Regime is conditional. Unresolved issues around taxation, labour law, public-support eligibility, and dispute resolution may undermine adoption if the regime does not provide a clearly simpler and more predictable alternative to national systems.

The paper concludes that while an effective 28th Regime could lower barriers to entry and enhance Europe’s investment environment, it will only address part of the continent’s competitiveness challenge. Real progress requires a wider programme of regulatory simplification, mutual recognition, and systematic removal of cross-border barriers within the Single Market.

The main findings of the briefing include:

• The expert panel gives the 28th Regime an average score of 7.5/10, signalling broad agreement that it is a moderately liberalising and pro-market reform.
• The regime’s key strengths include fully digital procedures, fast incorporation, flexible governance, and reduced fragmentation across 27 national frameworks.
• Major uncertainties remain around taxation, labour rules, social security, access to public incentives, and legal jurisdiction, issues that could limit adoption.
• A voluntary regime will succeed only if it is demonstrably simpler and cheaper than existing national corporate law systems.
• Even a well-designed 28th Regime cannot by itself resolve Europe’s broader competitiveness gap, which stems from persistent regulatory heterogeneity and Single Market fatigue.