EU Inc. is out, and the European accountancy profession welcomes it. Read our statement, and find out more about the proposal details below
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The European Commission (EC) published its latest annual Survey on the Access to Finance of Enterprises (SAFE). SAFE surveys date back to 2009, and maps pit SMEs’ main challenges each year, with particular emphasis on financial challenges.
The survey maps out the most important problems flagged by SME respondents. In 2025, the top challenges for SMEs were:
The EC presented on 18 March its proposal for EU Inc., a new single set of corporate rules, building the cornerstone and starting point for the EU’s 28th regime. EU Inc. is an optional, digital-by-default European corporate framework. It aims to make it easier for businesses to start, operate and grow across the EU, thus incentivising them to stay in Europe.
The proposed package of measures consists of the core regulation, an annex setting out the template/minimum requirements for articles of association, a recommendation for the definition of innovative start-ups and scaleups and a general Communication describing the proposal and explaining its policy choices.
Main features of the EU inc. proposal include the following:
To mark the occasion, Accountancy Europe published a public statement sharing the profession’s initial reactions to the proposal.
The European Parliament (EP) and Member States in the Council will form their respective positions on the EC proposal, and will then negotiate on a mutually agreeable compromise. The EC has called for finalising the proposal by the end of the year.
Three EP Committees voted on 25 February to endorse the EC proposals introducing the concept of small mid-cap enterprises (SMCs) and extending to them various exemptions that so far have been available to SMEs (for more information on the EC proposal, see Accountancy Europe’s SME update from May 2025).
The aim of the proposal is to avoid “cliff-edge” situations where a company’s obligations drastically increase when they grow beyond the SME threshold.
In their adopted position, MEPs want to see SMCs defined as companies with fewer than 1,000 employees; and either up to €200 million in turnover or up to €172 million in total assets (the EC proposed 750 employees, €150 million in turnover and €129 million in total assets). At the same time, the EP wants to ensure that support for SMEs is not diluted, that EU support follows a “think small first” principle, and that the thresholds are reviewed every five years.
As a next step, EP will negotiate with the Member States in the Council to find an agreeable compromise, which will then become final EU law.
On 10 March, MEPs endorsed (498 votes in favour, 90 against, and 28 abstentions) trilogue agreement on the proposal harmonising certain aspects of insolvency law. Member States’ formal approval will trigger the Directive entry into force twenty days after its publication in the EU Official Journal.
The new rules make it easier for insolvency practitioners to trace assets belonging to an insolvent company since they will get access to beneficial ownership registers, to national registers and databases and they will also be receiving more information from national authorities with access to national bank account registers and from those performing cross-border search. All insolvency practitioners, regardless of EU country of their appointment, will be guaranteed the same conditions for access to court.
If a company concludes legal acts within three months before initiating an insolvency procedure and they are beneficial to some creditors while detrimental to others, the new rules ensure they will become void and unenforceable. To better protect creditors’ interests, there will be a possibility to establish a creditors’ committee.
The “pre-pack proceedings”, allowing the sale of a still operational debtor’s business will now be available across the EU. For this purpose, debtors will remain at least partially in control of their assets during the preparation phase leading to insolvency procedure. To improve access to insolvency for microenterprises, MEPs ensured that EU countries will have the possibility to adopt laws allowing for easier winding-up proceedings.
There will also be stricter requirements for directors of insolvent companies across the EU. With the exception of preventive restructuring proceedings, they will have to submit a request to open insolvency proceedings within three months to avoid liability for damages caused to creditors.
MEPs adopted a legally non-binding resolution about better law making in the EU. The EP’s work on the file was led by MEP Jorgen Warborn (EPP/Sweden).
The resolution recommends easing SME reporting burdens and calls for streamlined reporting obligations, including through support for digitising reporting.
The report also acknowledges the importance of effective reporting “for tracking legitimate public policy objectives and enforcing legislation and, thus, serving the general interest”. It therefore calls on the EC and the Member States to assess “potential supporting measures” for companies to minimise reporting costs when implementing EU legislation, and to assess the feasibility of “establishing mechanisms to compensate companies for duly performed reporting tasks in a report”.
The Spring 2026 edition of the SMEunited Craft and SME Barometer reports a stagnating business environment for small and medium-sized enterprises across the European Union. The Business Climate Index stabilised at 73.9 pp, not diverting significantly from its previous level. The data was however collected before the start of the ongoing war in Iran.
According to Gerhard Huemer, Economic Policy Director, “this stagnation is driven by decreasing exports, geopolitical and trade tensions and higher savings rate from consumers. Furthermore, the more negative development in Northern countries (72.6 pp) can be attributed to the ongoing war in Ukraine and the indirect effect of US tariffs, which both impact them more. On the other side, the Southern economies (75.7 pp) benefit from private demand supported by a rebound in tourism and ongoing positive impacts from the RRF”.
The EU Craft and SME Barometer shows clear signs of stagnation, with most business indicators falling short of expectations for the second semester of 2025. These results suggest that earlier optimism may have overstated the impact of temporary favourable conditions. The cautious outlook for the first semester of 2026 shows still a high degree of uncertainty, but also first positive signs, at least before the start of the war in the Middle East.
Concerning the performance by sectors, manufacturing continues to be under pressure, due to low demand and weak competitiveness, which trickles down from large companies. Construction suffers from high costs for materials and mortgages, while the services sector has an overall positive dynamic despite wage driven price increases.
Mr Huemer concluded that future growth needs improvements in the regulatory environment, the avoidance of wage increases which exceed productivity growth and increasing investments in skills and infrastructure.
