When a foreign investor looks at a Spanish startup, one of the first questions is not about the product. It is about the company: what exactly a Spanish SL (limited company) is, what can go into its articles of association, why a notary is needed to buy shares. In more than one deal the answer has ended up being the same: set up a holding company in another country and leave the Spanish one underneath.
That is the problem the European Commission wants to solve with the EU Inc. On 18 March 2026 it presented a proposal for a Regulation creating a new company form, with the same rules in every Member State. In Brussels it is called the "28th regime" because it would sit alongside the twenty-seven national systems that already exist, without replacing any of them.
Where it stands
Today you cannot form an EU Inc.
The European Parliament's Legal Affairs Committee was due to vote on its report on 8 October, but the vote was postponed because the groups could not reach a majority, mainly over employee participation, and it is now expected around 19 October. The Council, where the governments sit, has not yet agreed its position. If things move forward, the plenary could vote in November, followed by negotiations between the institutions. And once adopted, the Regulation would not apply straight away but twelve months after it enters into force.
An SL you incorporate this year will still be an SL.
What it proposes
In short, the points that matter most to a growing company:
- Digital incorporation in 48 hours and for at most 100 euros, using the European templates for the articles of association and the common digital interface (Article 16).
- No minimum capital and no obligation to build up legal reserves (Article 62).
- Classes of shares with different rights, set out in the articles: preference in distributions or on liquidation, veto rights, multiple voting rights, non-voting shares (Articles 55 and 57).
- Share transfers entirely online, with a qualified electronic signature. Member States may not require a notarial deed (Article 59).
- A European employee stock option plan, the EU-ESO, taxed only when the shares are sold (Articles 78 and 79).
Quick, low-capital incorporation is no longer much of a difference for Spain: since 2022 an SL can be formed with one euro, with some safeguards until it reaches 3,000. What matters to an investor is the rest.
What I look at as an investor
Investor rights in the articles. In a Spanish funding round, much of what the investor negotiates (liquidation preference, vetoes, drag-along) goes into the shareholders' agreement. The agreement binds those who sign it, but its force against the company itself and against third parties has limits that anyone who has litigated one knows well.
The EU Inc. expressly lists these rights as features of share classes, that is, of the articles of association.
And it adds something worth more than it seems: a fund in Munich, one in Amsterdam and one in Valencia would read the same text. Today each of them has to ask a local lawyer what every clause means in every country.
Selling a stake without a notary. In a Spanish SL, a transfer of shares must be recorded in a public document. For a small sale, for instance when a first-round business angel sells to a fund in the second round, that means time and cost. In an EU Inc. a contract with a qualified electronic signature would be enough: the parties notify the company, which has three working days to record it in its digital share register or explain why it will not, and issues a digital certificate to the buyer. The check the notary makes today, that the seller holds the shares and that the articles are respected, is done by the company itself.
The board thus takes on a responsibility it does not have now.
Convertibles and pre-emption rights. The general meeting decides on issuing convertible notes and other instruments giving a right to shares. The articles may authorise the board to do so up to a maximum number of shares, and even to exclude pre-emption rights. On conversion, the text treats the claim as a cash contribution, which simplifies the step from note to shares.
Pre-emption rights exist by default, with fourteen days to exercise them, but they can be modified or excluded for each issue. For a minority investor this is the point to read closely, because protection against dilution depends on it: who can take the right away and by what majority.
Dividends with a solvency test. Before any distribution, all directors will have to sign a statement that assets will still exceed liabilities plus capital, and that the company will be able to pay its debts over the following twelve months. If they sign lightly they are jointly liable, and a shareholder who is paid knowing it should not have happened must give the money back. It is a sensible rule.
An exit for the minority shareholder. Article 52 allows a shareholder to ask the court to order the company and the other shareholders to buy their shares at fair value if the company is being run oppressively against them. In a Spanish SL the right to withdraw only exists in the cases set by law or by the articles. For the minority investor it would be a new safeguard, and for the founders one more reason to run the company in good order.
Stock options, the most debated piece
The EU-ESO allows the company to grant options (technically, warrants) to directors and employees. It excludes anyone who holds, or held in the previous two years, more than 25% of the votes or of the economic rights, and the options are free, non-transferable and cannot be exercised before 24 months. What stands out is the tax treatment: nothing is taxed when the option is granted, when it vests or when it is exercised. Tax arises only when the shares are sold, on the difference between their value at that point and what they cost, under each country's law. And no Member State may treat them less favourably than its own option plans.
Spain already took a step in this direction with its Startup Law: employees of certified emerging companies pay no tax on shares received up to 50,000 euros a year, and the excess can be deferred for up to ten years. The EU-ESO goes further by pushing taxation to the sale, which is when the employee has the cash to pay.
I would not treat it as settled: it is one of the areas with the most amendments tabled in Parliament.
What the EU Inc. does not change
It is not a tax regime.
The company will pay corporate tax where it is resident, like any other, and apart from employee options the Regulation does not touch taxation. Nor is it a complete body of company law: anything not covered by the Regulation and the articles is governed by the law of the country of the registered office, so an EU Inc. registered in Alicante would still turn to Spanish law to fill the gaps. And it has to be genuinely European, with the registered office and the central administration or principal place of business inside the Union.
What I would do today
I would not wait for the EU Inc. to raise capital. It does not exist today, and a round being prepared now is structured with what there is.
I would leave the door open. The proposal allows an existing company to convert into an EU Inc., provided two years have passed since its registration or its first two sets of annual accounts have been approved. If you are drafting the shareholders' agreement now, it is worth setting out how such a conversion would be decided and by what majority, so that the day it comes nothing has to be renegotiated.
If an investor asks you to move the company abroad, listen, but know that a European alternative is on its way. Moving the holding costs money going in, and a good deal more if it ever has to be undone.
And follow the vote these days. Whether the EU Inc. becomes a useful tool or just a nice name will depend on how employee participation and the option scheme end up.
Sources
- European Commission, proposal for a Regulation on the EU Inc. corporate legal framework, COM(2026) 321, 18 March 2026 (procedure 2026/0074(COD)), Articles 4, 9, 16, 21, 52, 55, 57, 59, 62, 68, 69, 72, 78, 79 and 109.
- European Parliament, Legislative Train file for procedure 2026/0074(COD) (JURI committee, rapporteur René Repasi).
- Agence Europe, 6 October 2026: postponement of the committee vote on the 28th regime.
- Spanish Law 28/2022 of 21 December on emerging companies, third final provision (Articles 14.2 and 42.3.f of the Personal Income Tax Law).
- Spanish Royal Legislative Decree 1/2010, consolidated Capital Companies Act, Articles 4, 106, 346 and 347.
This article contains general information for informative purposes and does not constitute legal advice or an investment recommendation. The rules cited may have been amended after publication; always check the text in force before taking a decision.