What do EU Inc. and the 28th regime mean for business in the EU?
For now, EU Inc. is only a proposal. If all goes well, implementation can start in 2027. We will keep an eye on developments and post about the concept in further detail. Watch this space.
The 28th regime and EU Inc.
The 28th regime is a proposed legal framework in which the European Union can achieve better cooperation and eliminate bottlenecks that impede the expansion of businesses that are already successful in their own member states. EU Inc. is the corporate law pillar of this framework.
EU Inc. will be a new business form that can be set up anywhere in the EU and should be recognized in every member state. Company registration should be fully digital as well as fast and cheap. Proposed procedures follow the “once only” principle, meaning that documents would have to be submitted to authorities only once, and relevant national authorities could access required paperwork through one unified platform. Additionally, instead of learning and complying with administrative requirements in 27 member states, EU Inc. business owners could take advantage of the opportunities of the EU market by meeting only the requirements of the 28th regime.
Third-country national business owners
For now, it seems that setting up an EU Inc. business will only be available to EU nationals or people who have permanent residency in an EU member state. If the new business will be a subsidiary, the parent company must be registered in an EU member state. As such, third-country nationals who want to access the EU market cannot go directly to EU Inc., they will need separate EU headquarters first.
As a result, Hungary remains an attractive destination for international businesspeople who want to set their foot in the EU – either as a standalone company, or as a future parent company of an EU Inc. business. Hungary offers company setup in 4-5 business days with immediate EU VAT number registration, in a central location with excellent infrastructure. Corporate tax is only 9%, which is the lowest in the EU. At the same time, Hungary is a Safe Harbour regarding the Global Minimum Tax, so if your business is affected, Hungarian regulations lighten the corporate group’s administrative and tax burdens. Additionally, the current proposal includes a Head Office Tax (HOT) system, which means that tax rules of the home countries of EU Inc. businesses would be applied, keeping Hungary a great option if you plan to enter the EU market and wish to take advantage of the EU Inc. company form.
European business landscape to change
It is expected that an agreement would be reached by the end of 2026, and implementation may start as early as 2027. EU Inc. will significantly reduce the most expensive hidden cost of international expansion of businesses: the cost of overcoming administrative and legal obstacles. As a result, European businesses will have easier access to the combined European market, which will allow innovation and value creation to speed up in Europe. The funds that are currently spent on administration can then be spent on creation and innovation, to the benefit of the Single Market of 450 million customers.
Helpers Hungary at your service
Helpers assists international clients in Hungary with business setup and residency application. Not only do we have 20 years of experience, but we also keep track of the latest developments relevant to European as well as Hungarian company registration and business operation. In line with that, we are also keeping an eye on how EU Inc. businesses will work, and we are planning to write more about this topic. For now, company formation in Hungary remains the best option if you want to start an EU business.
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The post What do EU Inc. and the 28th regime mean for business in the EU? appeared first on Helpers Hungary.
