The European Commission’s proposal for a 28th regime, also referred to as EU Inc., is being presented as a major step towards simplifying cross-border business in Europe. By offering companies a single EU-wide legal framework as an alternative to national systems, the initiative aims to reduce administrative burdens and stimulate economic activity.
However, from the perspective of the European Transport Workers’ Federation (ETF), this narrative overlooks the very real risks for workers in highly mobile and cross-border sectors such as transport, where enforcement of labour standards is already a major challenge.
A single European company model—who does it benefit?
At its core, the 28th regime introduces a harmonised company law framework that any company can choose to operate under. It promises fast, low-cost, and fully digital company creation, alongside simplified reporting and governance procedures.
While these features may appear attractive, the scope of the proposal has expanded significantly. It is not limited to startups or scaleups, but open to all companies, including large multinationals active.
This shift fundamentally changes the nature of the initiative. In sectors already characterised by complex subcontracting chains, cross-border operations, and flags of convenience — the ETF warns that EU Inc. could further enable companies to choose the most advantageous regulatory environment at the expense of workers’ rights.
An uneven playing field for transport workers
For transport workers, the risk of ‘regime shopping’ is particularly acute. Companies could register in Member States with weaker rules on worker participation, while operating extensively elsewhere.
This echoes existing practices in the sector, such as:
• Flags of convenience in maritime transport, where shipowners register vessels in countries with lower labour standards;
• Letterbox companies in road transport, used to lower labour costs and circumvent local regulations;
• Complex airline structures, where workers are employed under contracts from different jurisdictions than where they actually work.
The EU Inc. framework risks institutionalising these practices across all transport modes, enabling companies to avoid obligations such as works councils, collective bargaining structures, or board-level representation.
Moreover, companies could restructure into smaller EU Inc. entities to remain below thresholds that trigger worker representation rights—further weakening already fragile systems of social dialogue in parts of the transport sector.
Transport is by nature cross-border. The combination of this reality with a fully digital and flexible company model raises serious concerns. With EU Inc., companies could register in one Member State, operate in several others, and manage their governance entirely online.
The ETF is particularly concerned that this could undermine labour inspections, complicate the identification of the responsible employer, and weaken access to justice for workers facing unfair conditions.
Shifting risks and weak safeguards
The proposal’s EU-wide employee stock option framework is also problematic, as it shifts financial risks onto workers that should not be borne by them.
Instead of strengthening collective bargaining, sectoral agreements, and worker participation, the proposal promotes financial instruments that may expose workers to uncertainty without providing real influence over company decisions.
For the ETF, this reflects a broader concern: economic incentives are being prioritised over fundamental social rights, particularly in sectors where strong collective representation remains essential.
The risks are even more tangible in cases of insolvency or restructuring—situations that are not uncommon in parts of the transport sector.
Simplified and accelerated liquidation procedures could make it more difficult for workers to recover unpaid wages, severance pay, and social security contributions.
Given the existing challenges in enforcing labour rights in cross-border transport operations, the ETF warns that EU Inc. could further weaken already strained protection mechanisms.
A political choice, not just a technical reform
While the 28th regime is presented as a technical tool to deepen the single market, the ETF considers it a fundamentally political project with far-reaching consequences for the transport sector.
In its current form, the proposal prioritises flexibility for companies operating across borders—a key feature in transport industries—without ensuring equivalent safeguards for workers. This risks accelerating existing trends such as social dumping, regulatory arbitrage, and downward pressure on labour standards.
As discussions advance in the European Parliament and the Council, the ETF warns that, without substantial changes, the proposal could:
• intensify unfair competition between transport operators,
• weaken national industrial relations systems, and
• further erode enforcement capacity in an already complex cross-border environment.
Time to act
The coming months will be decisive. The ETF calls on its affiliates, trade unions, and policymakers to take a clear and critical stance, particularly in sectors where cross-border operations are the norm and workers are already exposed to regulatory loopholes.
The risk is clear: the 28th regime could become a tool for companies to circumvent labour laws, weaken collective agreements, and undermine worker representation across Europe.
The ETF, together with its affiliates, will actively engage with EU institutions, national governments, and Members of the European Parliament to push for strong safeguards, substantial amendments—or the withdrawal of the proposal.
For the ETF, one principle must remain non-negotiable: greater economic integration must not come at the expense of workers’ rights.
