The 28th Regime is a proposal by the European Commission to create a single, optional legal framework that companies across the EU can choose to operate under — as if there were a “28th Member State” with uniform business rules. The goal is to make it easier for innovative companies to grow and scale across borders, free from the complexity and fragmentation of 27 different national legal systems. First introduced by Ursula von der Leyen in her 2024–2029 Political Guidelines, the regime builds on the Letta and Draghi Reports, which highlighted how legal complexity and lack of investment are slowing down European innovation compared to the U.S. and China. 𝗪𝗵𝘆 𝗘𝘂𝗿𝗼𝗽𝗲 𝗻𝗲𝗲𝗱𝘀 𝗶𝘁 Europe’s competitiveness and economic independence depend on its ability to support innovation. At present, startups and SMEs face major barriers: • Different company laws, tax systems, and insolvency rules across Member States; • Limited access to capital, especially venture capital; • Administrative burdens that discourage cross-border growth. The 28th Regime aims to remove these barriers by creating a simple, unified framework that supports innovation the European way — balancing competitiveness with sustainability, social justice, and long-term resilience. To explore what this new framework could look like, the European Parliament’s Policy Department for Economic, Scientific and Quality of Life Policies commissioned a detailed study titled “The Scope of the 28th Regime – A Legal Framework for Innovation the European Way” (July 2025). The report outlines three ways the 28th Regime could be designed: 1. Narrow Approach: Only available to certain “innovative” companies, such as startups. • Problem: Would require bureaucratic checks, complex definitions, and certifications. • Risk: More red tape instead of less. 2. Horizontal Approach: Open to any company that chooses to adopt it. • Advantage: Simple, inclusive, and easy to implement. • Risk: May lack targeted support for specific innovation challenges. 3. Modular Approach: A balanced solution, combining broad access with specific targeted measures. • Core elements (like company law) open to all businesses. • Targeted tools (e.g., in taxation, labour, or insolvency law) tailored for innovative firms. The study recommends this modular approach — simple enough for wide adoption, but flexible enough to address unique needs. To make the regime practical and attractive, the report suggests introducing several tools: 1. A new European corporate form A flexible company model allowing founders to easily operate across borders, raise capital, and structure ownership. 2. Standardised legal documents • Pre-approved articles of association and shareholder agreements in all EU languages; • Templates designed with input from investors, lawyers, and entrepreneurs; • Lower legal costs, faster registration, and less uncertainty. 3. Specialised courts Cases under the 28th Regime could be handled by commercial courts or EU-level judges who work in English — ensuring consistency and fast resolution. 4. Innovative financing and governance tools The regime could introduce: • Multiple voting shares (to help founders keep control); • Veto shares (to protect purpose or prevent hostile takeovers); • Revenue-based financing and other non-dilutive funding models; • Legal options for long-term independence, such as steward ownership or employee participation. 𝗧𝗵𝗲 𝗘𝘂𝗿𝗼𝗽𝗲𝗮𝗻 𝗪𝗮𝘆 - 𝗳𝗹𝗲𝘅𝗶𝗯𝗶𝗹𝗶𝘁𝘆 𝘄𝗶𝘁𝗵 𝘃𝗮𝗹𝘂𝗲𝘀 Unlike the U.S. or China, the EU’s approach to innovation emphasizes: • Sustainability and fairness alongside growth; • Social inclusion and worker participation; • Long-term business models, not just quick exits. This means supporting both venture-capital-driven startups and independent, mission-driven enterprises — giving each the legal and financial flexibility to thrive. The 28th Regime could become a milestone in Europe’s economic evolution — a unified, optional legal system empowering innovators to build and scale businesses without borders, while staying true to European values of sustainability, fairness, and social responsibility. If successful, it would not just simplify business law — it would redefine how Europe fosters innovation for decades to come.