Businesses offered the opportunity to influence the European Union's 28th administrative system.
The European Commission has recently proposed a new legal framework called the '28 regime' to simplify rules for innovative companies operating within the EU. This initiative, which aims to provide a single, harmonized set of EU-wide rules, allows companies to opt into this framework instead of navigating different national legislations.
The proposal for the '28 regime' was presented by the European Commission in a report on the future of the EU single market. The Commission was advised last year to develop plans for a 28th regime in two separate reports it commissioned. Former Italian prime minister Enrico Letta supported the idea, suggesting the establishment of a Simplified European Company as part of the 28th regime, with the potential to cover areas such as general commercial law, market law, and employment law.
The European Commission's 'competitiveness compass' outlined the proposal for the new regime in January 2025. Dublin-based Paul White of Pinsent Masons, an expert in corporate law, expressed views on the proposed 28th regime. White noted the existing Irish legal framework that supports companies in Ireland, which incorporates some features being considered for the 28th regime.
However, White also expressed concerns about potential additional restrictions that might be imposed under the 28th regime, which could discourage businesses from setting up. He cautioned against unintentional consequences when drafting proposals around share issuance and transfer under the 28th regime. White highlighted the ease of setting up a business in Ireland and the pro-business environment in the country.
The Commission is seeking input on fundamental questions such as the scope of the '28 regime', the types of companies it should be open to, and eligibility requirements. The consultation remains open until 30 September 2025 and has already attracted several hundred responses. The Commission plans to set out its formal proposals for the '28 regime' in the first quarter of 2026.
The Commission opened a call for evidence in July 2025, inviting stakeholders to complete an online questionnaire regarding the '28 regime'. The '28 regime' aims to help 28 regime companies attract investment, such as allowing for multiple classes of shares and limiting share transfers. The consultation is open to businesses, entrepreneurs, investors, and start-ups.
In addition to simplifying rules for innovative companies, the '28 regime' also considers measures to help these companies attract investment. The Commission is considering these measures carefully, balancing the need to stimulate investment with the requirement to protect shareholders. White emphasized the need to balance these two aspects in the drafting of the '28 regime' proposals.
As the consultation period for the '28 regime' continues, it remains to be seen how this new legal framework will shape the landscape for innovative companies operating within the EU. The Commission's proposals are expected to be finalized in the first quarter of 2026, providing clarity and certainty for businesses and investors alike.
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