NFU Press Release: Commission’s “EU Inc.” Proposal Undermines Social Europe
The Nordic Financial Unions (NFU), expresses serious concern and firm opposition following the publication of the European Commission’s draft proposal for a Regulation establishing a 28th Regime corporate framework in the form of an “EU Inc.”
The proposal represents a clear break with the European Parliament’s recently adopted position, which set out a balanced, legally grounded and socially responsible framework for cross-border company activity. Instead of building on that approach, the Commission has chosen a fundamentally different path, one that risks turning the 28th Regime into a deregulatory instrument.
While the Parliament called for a limited, modular framework embedded within national legal systems, the Commission proposal introduces a standalone European corporate form, governed by a harmonised set of rules applicable across all Member States. This shift is not merely technical, it changes the nature of the initiative.
The proposed EU Inc. would allow companies to be created rapidly through fully digital procedures, including a fast-track incorporation process within 48 hours at minimal cost, with no minimum capital requirements and highly flexible financing structures. While digitalisation is an important objective, when combined, risk creating a corporate vehicle that can be used to circumvent national regulatory frameworks rather than operate within them.
NFU is particularly concerned that the proposal fails to ensure robust and enforceable labour and social safeguards. Although it refers to existing national rules on employee participation, the framework relies heavily on the law of the registered office/country of origin and does not guarantee that stronger systems, such as codetermination or collective bargaining structures will be preserved in practice. This raises a real risk of forum shopping and downward pressure on labour standards.
Moreover, the proposal contradicts several core elements of the Parliament’s mandate. The Parliament explicitly rejected the creation of a standalone EU company form and instead advocated for a harmonised framework integrated into national systems, based on a clear Treaty foundation and accompanied by strong safeguards. By contrast, the Commission proposes a directly applicable regulation establishing a parallel corporate regime, thereby raising serious legal and constitutional concerns regarding competence, proportionality and subsidiarity.
Carin Hallerström, NFU’s General Secretary said:
“This proposal crosses a line. What was intended as a tool to help companies navigate the Single Market risks becoming a vehicle for regulatory arbitrage. Even in the most optimistic interpretation, it does not provide the guarantees needed to protect employees’ rights or safeguard national labour models.”
Anna-Delia Papenberg, Head of EU Affairs at NFU, added:
“The European Parliament sent a clear signal: the 28th Regime must be an integrative, not a deregulatory project. The Commission’s proposal moves in the opposite direction. It replaces a balanced framework with a parallel system that risks undermining both legal certainty and social protections.”
NFU emphasises that even under the most favourable analysis for trade unions, the proposal is not acceptable. It fails to ensure non-regression in labour standards, creates incentives for companies to select the most permissive regulatory environment, and weakens the link between companies and national social models.
