If all goes well, a new business form will be available to European businesses from 2027: EU INC. It will be possible to set up an EU INC in either of the 27 member states of the EU, but the company will be able to operate legally in all of the member states. For now, this is just a plan – stay tuned for updates.
What is an EU INC company?
EU INC is a new company form proposed by the European Commission as part of their efforts to make the EU more competitive. Currently, EU based businesses face a serious obstacle if they want to expand beyond the national boundaries of their home country: even if the market is common, the regulatory environment shows enormous differences, while licenses have to be obtained separately. As a result, if an EU company wants to trade in every member state of the EU, it has to allocate huge funds for regulatory compliance. This way, even if a business is successful locally, its international expansion will be seriously impeded, despite having apparent access to the Single Market.
The European Commission intends to eliminate this bottleneck by the introduction of a new company form, EU INC, which can be set up in any EU member state but must be recognized by all. Details are still being discussed. It seems there will be a minimum set of rules EU INC companies will have to comply with in order to lawfully operate across the EU. Compliance related workflows would follow the “only once” 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.
EU INC for third-country national investors
Even if the plan of introducing EU INC companies goes through, third-country national investors will not be able to set up EU INC businesses right away. The new company form will be available only to EU nationals or people with permanent residency in an EU member state. If the new EU INC company is a subsidiary, its parent company must have its seat in an EU member state. As such, if you want to expand your business to the EU as a third-country national investor, you will still need to set up a company somewhere in the EU first, and then you can set up an EU INC subsidiary if you want to take advantage of the additional benefits.
Hungary is ideal if you want to get a foot in the EU’s door. Company registration is allowed for all nationalities even without a local investment partner. A Limited Liability Company (KFT) can be created within 4-5 business days, and an EU VAT number is issued for it immediately. Corporate tax is only 9%, which is the lowest in the EU – and which will prevail for your EU INC company too if the proposed Head Office Tax system (HOT) is realized. Additionally, Hungary is a Safe Harbour for the Global Minimum Tax, which lightens the tax and administrative burdens on affected business (those that have a yearly revenue over EUR 750 million).
The future of business in the EU
For now, EU INC is just a proposal. It will be accepted earliest around the end of 2026, in which case implementation could start early 2027. However, there is much to discuss until then, and the concept will probably undergo significant changes before it gets realized. In any case, EU INC will significantly reduce the administrative and legal obstacles that hinder business growth within the EU, this way furthering innovation and value creation.
Until then, there is no reason to hesitate with setting up an EU business. Start a Hungarian LLC, and you can already take advantage of all that the EU has to offer, including access to the Single Market of 450 million potential customers. Let us help you make the first steps, and get started now.
Helpers Hungary assists international clients with business setup and residency applications with 20 years of experience. Whatever you need, we can help you all along the way, from company formation through accounting and mail forwarding to residency. If you want to learn more, follow us on Facebook, or sign up for our monthly newsletter.
Frequently asked questions
The 28th regime is the name of a legal framework that is meant to allow better cooperation between the 27 EU member states regarding various fields. EU INC is the corporate law pillar of this framework, meant to increase the competitiveness of EU businesses through the introduction of a new business form.
For now, EU INC is just a proposal. It will not be active before 2027, and its actual launch will depend on how negotiations proceed. Watch this space for updates!
While it is just a proposal for now, the idea is that any EU citizen will be able to set up an EU INC company, and any EU company will be able to set up an EU INC subsidiary.