This article is paid for by Council of the Notariats of the European Union (CNUE).

An address rented in a European capital, an electronic signature obtained online, a 48-hour waiting period.

Under the proposed regulation establishing a 28th company law regime, known as ‘EU Inc.’, this could be enough to establish a company with legal personality throughout the European Union.

No share capital would be required. The founder could complete the entire process without appearing, even digitally, before a public authority or another person entrusted with preventive legal control.

There would be no personal verification of their legal capacity, of whether they understand what they are signing, or of whether they are acting on behalf of someone who wishes to remain invisible.

The company could then open bank accounts, enter into contracts, own assets and employ people across the European Union. If the company later fails to meet its obligations, creditors and employees may find that there are no assets to recover and that the person formally responsible for it was acting merely as a front man. 

This scenario illustrates the serious concerns raised by the proposal for a Regulation on ‘EU Inc.’ put forward by the European Commission and currently being examined by the European Parliament and the Council of the European Union.

The preventive checks set out in Article 14 of the commission’s proposal are largely limited to formal requirements.

There is no independent and impartial scrutiny of the founders’ legal capacity, of the lawfulness of the articles of association, or of whether the transaction complies with substantive legal requirements. Transfers of shares and capital transactions are also not subject to substantive control. Liquidation is treated primarily as an administrative formality, even though it can directly affect creditors and employees.

The consequences may extend far beyond company law.

Companies own real estate and are entered in land registers. If it is no longer possible to establish reliably who owns a company, it also becomes more difficult to establish who ultimately owns the real estate held by that company. Reliable company information therefore matters for the transparency of property ownership.

‘Not reliably verified’?

If the information in a register has not been reliably verified, others have to verify it themselves. Banks, business partners and investors may need additional legal opinions, audits and insurance. Costs that a preventive check avoids at the outset may therefore arise repeatedly at a later stage.

This would represent a shift from the European tradition of public preventive legal control towards a model that relies more heavily on resolving disputes after they arise.

Delaware is a prominent example of such an approach, supported by specialised courts and a correspondingly prominent role for litigation. Transplanting it to Europe would place additional demands on national judicial systems that lack the necessary resources.

The proposal also raises questions with regard to the recent European efforts to combat money laundering and the financing of terrorism.

The creation of the Anti-Money Laundering Authority (AMLA) is the latest milestone in this process. To create, at the very same time, a legal form with significantly reduced checks risks severely undermining these efforts.

The same applies to sanctions: their enforcement depends on knowing who is really behind a company – especially when shares are transferred. Without reliable legality control of share transfers, corporate ownership can change unnoticed and become a vehicle for sanctions circumvention.

The amendments required are straightforward. The acquis of European company law, as established by Directive (EU) 2017/1132 and recently reinforced by Directive (EU) 2025/25, should also apply to EU Inc. companies.

This means reliable identification of founders and directors, public oversight of legal compliance at the time of formation and at subsequent stages, and reliable business registers. 

Public protection

These safeguards exist for a reason.

They protect not only the parties to a transaction, but the public at large. Because they serve a public purpose, they must remain a public responsibility. Private service providers cannot replace independent preventive control carried out under public responsibility. 

How these checks are organised differs between member states. In some member states, public authorities carry them out directly. In others, the state entrusts notaries with this public function.

Notarial involvement therefore does not add another layer of control: the same public function is simply carried out by different public authorities. In many member states, a company can already be formed digitally within 48 hours, with full legal verification carried out by a public official.

The European Parliament and the Council of the European Union will decide their positions in the coming weeks.

There is still time to improve the legislative framework of EU Inc. significantly and to make it a success.

This requires digital and efficient procedures without compromising legal certainty. The rule of law is one of the European Union’s strengths. EU Inc. should build on that strength, not weaken it.

The appointment of a dedicated Commissioner for Energy and Housing, the launch of the European Affordable Housing Plan, and growing political attention to Europe’s housing crisis raised expectations of a comprehensive policy response.

The next legislative step was therefore expected to address one of the Union’s most pressing social challenges. The proposed Affordable Housing Act is an important step in that direction. Yet its binding Regulation focuses primarily on one specific aspect of the problem: restrictions on non-primary housing use, particularly short-term rentals, in areas under housing stress.

While addressing short-term rentals is a welcome intention, it cannot on its own provide a comprehensive response to Europe’s housing crisis. 

The pressure that holiday homes and short-term rental platforms are putting on housing markets, particularly in popular tourist destinations, has been rising, and giving local authorities better tools to respond is important. However, questions have already been raised about whether the proposed framework will give cities sufficient room to act effectively.

For instance, the proposed approach to defining “areas under housing stress” risks being too narrow. Housing stress cannot be understood through property prices, income levels and short-term projections alone. Energy poverty, combined housing and energy costs, overcrowding, vacancy rates and the condition of existing housing stock all influence whether households can access decent and affordable homes. A broader understanding of housing stress would better reflect the reality facing communities across Europe.

Yet the broader picture reveals an important limitation: many of the structural drivers of housing unaffordability remain outside the scope of the binding Regulation. In particular, it gives limited attention to one of Europe’s most significant untapped housing resources: the buildings and homes that already exist.

Renovation, adaptive re-use and the mobilisation of vacant and underused buildings feature in the European Affordable Housing Plan and the Recommendation accompanying the Act. But if Europe is serious about increasing affordable housing stock, these approaches should play a stronger role in the framework itself.

Across the EU, more than 47 million dwellings are estimated to be unoccupied. This does not mean that every empty home can or should be brought back into use. But it illustrates the scale of an existing resource that cannot be ignored. Bringing even a fraction of suitable vacant and underused stock back into use could create much-needed homes while reducing pressure for new construction and making better use of existing buildings and infrastructure.

Europe cannot reuse buildings it cannot see. Yet many public authorities still lack reliable information about which homes and buildings are vacant, why they are empty, what condition they are in and what potential they have for affordable housing.

The EU does not need to start from scratch. The Energy Performance of Buildings Directive (EPBD) and National Building Renovation Plans already provide a natural policy framework for understanding and planning the future of Europe’s building stock. Vacancy identification, mapping and monitoring should become part of the binding architecture of the Affordable Housing Act, ensuring that public authorities are, at a minimum, equipped to identify vacant and underused homes and assess their potential for conversion into decent and affordable homes.

Identifying vacant buildings, however, is only the first step. The accompanying Recommendation could go further by providing guidance on how to mobilise vacant properties, support the conversion of different building types and develop viable financing models.

EU financing should also better support the mobilisation and re-use of existing buildings. The next EU budget should continue to support affordable housing investment and recognise that renovation and re-use projects simultaneously deliver social, climate and energy benefits.

Ultimately, however, success cannot be measured only in buildings renovated or investment mobilised. It must be measured in whether people can access decent homes they can afford.

According to the Commission’s EU Anti-Poverty Strategy, one in five Europeans – nearly 93 million people – are at risk of poverty or social exclusion, while approximately 1 million people experience homelessness. Affordable housing policy must therefore place particular emphasis on those least well served by the housing market, including lower-income households and people experiencing or at risk of housing exclusion.

The Affordable Housing Act is an important step forward. But as it moves through the legislative process, there is still an opportunity to broaden its ambition. A stronger focus on re-use, better implementation support, dedicated financing and a more people-centred approach would help turn a useful regulatory framework into a more comprehensive response to Europe’s housing affordability challenge.

This article is supported by Habitat for Humanity International, Climate Action Network (CAN), European Environmental Bureau and World Green Building Council.