EU Inc Changes Cross-Border Debt Collection

The European Commission has unveiled what may be the most consequential corporate law proposal in a generation. EU Inc — formally the 28th legal regime — would allow entrepreneurs to incorporate a company in 48 hours, for roughly €100, with no notary requirement and no minimum capital. One digital form. One set of rules. Twenty-seven countries.

For anyone in the business of collecting debts across borders, this is not a footnote. It is a structural shift in the landscape.

Today, forming a company in Europe means choosing from more than 60 existing company forms spread across 27 national legal systems. A German GmbH operates under entirely different rules than a French SAS or an Italian Srl. Each comes with its own capital requirements, governance structures, registration procedures, and — critically — its own rules on where and how legal process is served.

EU Inc proposes to collapse this complexity into a single, harmonised framework. The entity would exist under EU law rather than any national system. No physical office is required. No notarial deed. No minimum share capital. The Commission envisions specialised judicial chambers to handle disputes involving these entities, with a target political agreement by end of 2026.

The pitch is straightforward: make it as easy to start a company in Europe as it is in Delaware. Remove the friction that keeps small businesses from operating across borders.

Here is where it gets interesting for creditors and collection professionals. When a debtor operates as a pan-European entity with no physical office and no national corporate domicile in the traditional sense, a very practical question emerges: where do you serve papers?

Under current frameworks, service of process follows national rules tied to a company's registered office. Cross-border enforcement already relies on a patchwork of EU regulations — the Brussels I Recast Regulation for jurisdiction, the European Enforcement Order for uncontested claims, the European Account Preservation Order for freezing bank accounts. Each of these instruments assumes you can identify a specific member state where the debtor is legally anchored.

EU Inc complicates that assumption. If the entity is registered under EU law rather than German or French law, and its founders operate remotely from multiple jurisdictions, the traditional hooks for enforcement become less clear.

Service of Process in a Borderless Entity

The proposal does not yet offer detailed answers on how judicial process will reach EU Inc entities. Specialised judicial chambers are proposed, but their relationship to existing national court systems remains undefined. Will a creditor in Milan be able to obtain a payment order against an EU Inc entity whose sole director works from a laptop in Lisbon? Almost certainly. But through which court, under which procedural rules, and with what enforcement mechanisms?

These are not academic questions. They are the questions that determine whether a €50,000 unpaid invoice gets collected or written off.

The International Credit Insurance and Surety Association has already raised concerns about the intersection of simplified incorporation and late payment trends across Europe. Their worry is practical: lower barriers to incorporation could mean more entities, more cross-border trade, and inevitably more cross-border defaults — all occurring within a legal framework that has not yet been stress-tested.

Credit insurers are watching closely because their exposure models depend on understanding where a company sits in the legal hierarchy. A company incorporated under national law has a known insolvency regime, known preferential creditor rules, and known timelines for winding-up proceedings. An EU Inc entity may eventually have all of these things, but not yet.

For firms like COLLECTY → that operate collection networks across 100+ countries, EU Inc represents both opportunity and complexity. On one hand, a harmonised corporate form could simplify debtor identification and reduce the legal research needed to understand an entity's governance structure. On the other hand, the transition period — where EU Inc entities coexist with 60+ national forms — will create a layered enforcement environment that demands even deeper cross-jurisdictional expertise.

Practical Steps for Creditors

Creditors extending terms to European counterparties should begin preparing now. First, ensure your onboarding processes can identify whether a counterparty is incorporated under national law or the forthcoming EU Inc framework. Second, review your standard terms to ensure jurisdiction and governing law clauses remain enforceable against entities that may not have a traditional national domicile. Third, maintain relationships with enforcement partners in multiple jurisdictions — because even a single EU entity type may require enforcement actions in whichever member state its assets actually sit.

EU Inc is part of the Commission's broader push to complete the single market for services and capital. It sits alongside proposals on cross-border tax simplification, digital identity, and the long-stalled Capital Markets Union. The political momentum is real. The details, however, are still being written.

For the debt collection industry, the message is clear: the rules of the game are changing. The companies that adapt their cross-border enforcement capabilities now will be the ones that collect when others cannot. Twenty-seven national systems are becoming twenty-eight. And the twenty-eighth has no borders at all.

When your debtor's registered office is everywhere and nowhere, you need a collection partner that operates the same way. That is what a global network is for.