Europe does not suffer from a lack of talent, ideas, or capital. What it lacks is a system that allows companies to grow without being slowed down by unnecessary complexity.
For decades, Europe has tried to compete globally while forcing its most ambitious companies to navigate 27 different company law systems, contract standards, and employee participation rules. The result is predictable: startups remain small for too long, scale-ups spend more time restructuring than innovating, and investors price in legal friction as a cost of doing business in Europe.
This is not a cultural problem. It is a structural one.
The cost of fragmentation
In the United States, a company can scale nationally under a largely unified legal framework. In China, scale is built into the system. In Europe, growth often means legal reinvention — new entities, new contracts, new option plans, new compliance layers — every time a company crosses a border.
The unintended consequence is that Europe rewards caution and complexity, while penalising speed and ambition. This is not sustainable in a global economy defined by rapid technological change and intense competition for capital and talent.
If Europe wants European champions, it needs to stop designing systems that work best for companies that never leave their home market.
The 28th Regime: A necessary break from the past
The proposed 28th regime represents a rare moment of honesty in EU policymaking: an acknowledgement that incremental harmonisation is no longer enough.
Instead of forcing all Member States to fully align their company laws — a process that is politically sensitive and painfully slow — the 28th regime introduces a choice: an optional, EU-level legal framework that companies can opt into from day one.
In effect, it would function as a “virtual 28th Member State”, sitting above national systems and offering:
A single EU-wide company registration, digital-first and in English
Consistent rules for employee share and stock-option schemes, reducing talent friction
Standardised investment and shareholder documentation, familiar to global investors
A legal structure designed for cross-border growth by default, not as an afterthought
Tax and employment law would remain national — a pragmatic recognition that full unification is neither realistic nor necessary. What matters is removing the friction that actually blocks growth.
From advocacy to policy momentum
What makes this initiative different is that it is not being driven by theory alone.
Founders, investors and scale-ups — including initiatives such as EU Inc — have translated long-standing frustrations into concrete proposals. These ideas have gained traction at EU level, with the European Parliament openly supporting the creation of an optional EU-wide corporate form, and the European Commission preparing a formal legislative proposal.
The remaining question is not whether Europe needs this reform, but how bold it is willing to be. A directly applicable Regulation would deliver speed and legal certainty. A Directive risks diluting impact through uneven national implementation — repeating the very fragmentation the regime is meant to solve.
Why this matters for Malta
For smaller, outward-looking economies like Malta, the stakes are particularly high. Malta does not compete on domestic market size. It competes on access, agility and international connectivity.
Reduce friction for Maltese companies expanding across Europe.
Make Malta more attractive as a base for EU-facing startups and scale-ups.
Align legal structures with international investor expectations.
Support faster, cleaner growth without sacrificing regulatory integrity.
This is not about replacing national systems. It is about giving companies the option to scale at European speed.
Innovation, competitiveness and sustainability
The 28th regime is not branded as a sustainability initiative — but it is deeply connected to sustainable economic outcomes.
An economy that cannot scale innovation is not resilient. A system that drains management time into legal complexity does not create long-term value. By simplifying how companies are built and grown, Europe can redirect energy towards productivity, innovation, and investment in transition-driven sectors.
Sustainability is not only about what companies report. It is also about whether Europe creates an environment where sustainable, innovative businesses can actually thrive.
A moment Europe should not waste
Europe has diagnosed its competitiveness problem many times. What has been missing is the willingness to rethink foundational systems.
The 28th regime will not solve Europe’s competitiveness challenge on its own — but it is a credible attempt to modernise Europe’s legal infrastructure for the realities of today’s economy. If Europe is serious about growth, innovation and long-term resilience, this is not an experiment to dilute. It is one to deliver properly.
At Grant Thornton Malta, we believe that challenging legacy systems is essential to building a competitive and sustainable European economy. We will continue to engage closely with these developments and support businesses navigating what could be one of the most important structural reforms of the decade.
