Europe is preparing for a major shift in how start-ups and growth companies can build, scale, and raise capital. A new proposal, known as the 28th Regime, introduces the EU-Inc, a fully digital and truly pan-European company structure designed to remove many of the legal and administrative barriers that hold young companies back. For founders, investors, and fast-growing businesses, this could be one of the most significant developments in years. Below, we explore what the EU-Inc is, how it works, and what impact it could have for Kylla’s clients and portfolio companies.
Europe Prepares a Game-Changer
Across Europe, early-stage and growth companies continue to face a familiar set of obstacles. Incorporation rules differ from country to country, investor contracts vary widely, and stock option schemes rarely work across borders. These inefficiencies slow companies down, increase legal costs, and make it more difficult to attract international investors or top talent.
Now, a major development is taking shape in Brussels that could dramatically improve this landscape. The 28th Regime proposes the creation of a single, EU-wide legal entity known as the EU-Inc. This would be a digital-first corporate structure recognised in all Member States, designed specifically to help modern companies start, scale, and raise capital across Europe with far fewer hurdles.
At Kylla, we see this as one of the most promising developments in European corporate governance in decades. Many of our clients and portfolio companies operate in multiple countries, work with international investors, or are planning to scale into new markets. A unified, predictable, Europe-wide regime could unlock significant advantages for them.
What is the EU-Inc?
EU-Inc is envisioned as a new, pan-European company type, built under an EU Regulation rather than national law. It would offer a single set of corporate rules applicable across the entire EU, removing the need to navigate 27 different legal systems.
The key features of EU-Inc include a fully digital incorporation process that can be completed within 24 hours for less than €100, together with a central EU Registry that enables companies, investors, banks, and public authorities to work from the same verified data. It also brings forward a standardised investment instrument, the EU-FAST, which would provide a European equivalent to the US SAFE.
Employees across the EU could benefit from a single stock option scheme, EU-ESOP, eliminating dry-tax risks and allowing companies to offer equity through one consistent framework. All of this is supported by predictable, unified corporate governance, while taxation and labour law remain fully under national authority.
The result would be a European ecosystem that is significantly simpler and faster, and far more attractive for both founders and investors.
Why this matters for capital raising
For many founders, the biggest frustration when raising money internationally is the time and cost spent explaining their domestic corporate structure. Investors often hesitate to commit capital when they are unfamiliar with local rules or potential liabilities.
EU-Inc directly addresses these concerns by introducing a standard investment document, the EU-FAST, which creates clarity and trust in much the same way that SAFE notes became the norm in Silicon Valley. It also establishes a unified corporate structure recognised across all Member States, removing the need for investors to understand the complexities of Belgian, German, Spanish, Dutch, or any other national system. In addition, integrated digital identity and verification tools would make compliance more efficient for investors and significantly reduce administrative work for companies.
For Kylla’s clients who raise capital across borders, these changes would materially shorten transaction timelines, reduce legal spend, and widen the pool of potential investors.
A boost for attracting talent
Europe has long struggled to offer stock options that are as simple and fair as those in the US. Many countries still tax employees before they can sell their shares, creating the well-known “dry tax” problem.
The proposed EU-ESOP would set one unified framework where employees pay tax only when they sell shares, and where share options are recognised as capital gains, not salary. This would make it far easier for growth companies to recruit—and retain—talent from anywhere in Europe, without running multiple national plans.
For Kylla’s portfolio companies, which increasingly build distributed teams, this would be a substantial step forward.
How our clients would benefit
Kylla represents growing companies across Europe, the Middle East, Africa, and Asia, each operating in a different environment and facing its own share of complexity. Many already expand across borders during their early stages. A framework such as EU-Inc would reduce incorporation and structuring costs when entering or scaling within the EU and would streamline cross-border fundraising by relying on documentation that international investors already understand and trust. It would also create a competitive stock option scheme that strengthens recruitment and retention across all markets.
Moreover, EU-Inc offers a unified corporate structure capable of supporting long-term scaling, avoiding the need to convert or reorganise entities as companies grow. At the same time, it would significantly lower administrative burdens, enabling companies to dedicate more resources to product development, sales, and international expansion.
This aligns strongly with Kylla’s mission: helping entrepreneurs grow without borders, with the right structure, the right investors, and the right governance at every stage.
A strategic shift for Europe
If implemented in full, the 28th Regime could shape the future of Europe’s innovation landscape. It would help create a truly integrated market for start-ups and scale-ups, encourage more cross-border investment, and give founders the tools they need to compete internationally.
The European Commission is expected to publish its official proposal in 2026. Kylla will follow the developments closely, as this initiative has the potential to benefit a large part of our client base and strengthen Europe’s position in the global innovation economy.
By: Dick van Druten
Managing Partner
Kylla Corporate Transactions
