'The Business Must Go On’? The EU Inc Proposal and Its Money Laundering Risks

The EU Inc proposed 28th regime’s fully digital, ‘fast-track’ incorporation model creates an exceptionally low-friction entry point for forming a company in the EU. Registration can be completed within 48 hours, with founders using the harmonised template articles of association and paying the capped €100 fee. This acceleration is intensified by the absence of a minimum capital requirement. The proposal explicitly permits incorporation without paid-in capital at the registration stage, removing a traditional safeguard that ordinarily serves as a filter against the misuse of corporate vehicles.

Combined with digital-only procedures and the ‘once only’ principle, under which information submitted at formation is automatically transmitted to tax, welfare, and beneficial ownership authorities, the proposed framework substantially reduces early intervention and checks. However, these were once the points at which identity misuse, false filings, or the creation of shell companies could be detected. By removing procedural hurdles, the regime indirectly removes scrutiny. In this regard, the Regulation lacks a meaningful anti-money laundering (AML) scrutiny process at the point of incorporation, one that is aligned with the obligations established under EU AML legislation.

The EU Inc Regulation also introduces a digital‑first, highly streamlined procedure for closing solvent companies. A solvent EU Inc may be dissolved fully online by filing a dissolution notice with the business register, which must immediately update the company’s status. This fast‑track liquidation is available where the company has ceased activity, holds no assets or debts (or has obtained creditors’ consent), and is not subject to administrative or judicial proceedings. Although creditors, including tax authorities, are granted a 30‑day objection window, the absence of embedded AML controls raises a critical question: at what point in this accelerated process can AML authorities intervene? The model risks creating institutional capacity barriers, with AML supervisory checks conducted, if at all, too late to be meaningful.

In addition, solvent voluntary liquidation procedures have been identified as inherently vulnerable to abuse, particularly because they allow companies to exit the market with limited scrutiny and minimal external verification (see Behind Closed Books Policy Paper March 2026). These procedures create opportunities to disguise asset transfers, dissipate funds before creditors or authorities intervene, and eliminate audit trails at a time when oversight is at its weakest. Within the EU Inc framework, the combination of speed, digital‑only communication, and the absence of embedded AML checkpoints increases these risks: voluntary dissolution becomes not only an administrative formality but also a potentially attractive mechanism for laundering dirty capital or closing shell entities before detection of criminal activities. This risk further underscores the structural gap created when rapid‑exit mechanisms are introduced without proper thought given to AML oversight and institutional capacity.

The regime also creates a special, simplified winding-up procedure for insolvent innovative start-ups. The procedure is intentionally swift, low-cost, and digital, acknowledging the financial volatility of early-stage, high-growth firms. Proceedings may be initiated online by the debtor, a creditor, or a group of creditors using a standardised EU form. As a general rule, an insolvency practitioner must be involved. However, in exceptional circumstances, where the debtor has behaved prudently, and the risk is deemed low, the competent authority may waive this requirement. Claims are admitted based primarily on the debtor’s own statement, unless creditors actively object. Silent creditors are treated as having accepted the claim list. Member States must establish at least one electronic auction platform for asset realisation, with all national systems interconnected through the European e‑Justice Portal to ensure EU‑wide access and multilingual functionality. The entire simplified procedure is intended to conclude within six months of the initial request.

While digitalisation and speed may support a start-up rescue culture, the procedure creates clear AML vulnerabilities: debtor-led statements, limited practitioner involvement, and rapid timelines reduce independent verification and expand opportunities for asset shielding, fraudulent claims, and phoenixing activity. This ‘turbo’ approach sits in a context where AML supervisory functions are not fully harmonised across European company services because of the fragmented implementation of the most recent EU AML Directives. In this regard, the Regulation vaguely promises, ‘The proposal will be coherent and complementary with the objectives of EU taxation and anti-money laundering legislation’.

To address the systemic vulnerabilities identified above, the EU Inc Regulation should:

1. Design AML checks as recurring throughout the company life cycle. AML oversight cannot be limited to beneficial ownership databases. AML risk assessment must be conducted at incorporation and dissolution or simplified insolvency, with a supervisory framework that ensures early detection of abuse and criminal activities and avoids asset dissipation.

2. Include a harmonised AML supervision system across Member States through digital, simplified procedures. EU authorities could streamline risk assessments, reduce inconsistencies, and prevent uneven investigative practices or enforcement measures using a specialised investigative software. Shared digital standards would strengthen oversight and ensure uniform, effective AML controls throughout the EU, supporting regulatory harmonisation and cooperation.

3. Enhance coordinated AML gatekeeping functions across corporate law services more organically. Company formation agents, notaries (where still used), registrars, and insolvency practitioners must operate within an integrated supervision architecture consistent with EU AML Directives.

The EU Inc regime promises speed, efficiency, and reduced administrative burden, key levers for strengthening Europe’s competitiveness and fostering legitimate economic growth. But these benefits cannot be obtained if the system simultaneously opens structural pathways that facilitate economic crime. Digital acceleration without corresponding robust AML procedures risks creating a regime where corporate formation, dissolution, and simplified insolvency become vehicles for money laundering, asset shielding, and regulatory evasion.

To prevent this, coordination with the EU’s AML framework is pivotal. Company registers, formation platforms, insolvency authorities and practitioners, and tax administrations must operate within a harmonised supervisory ecosystem that reflects the multifaceted nature of economic crime. Embedding AML checks directly into digital incorporation and winding‑up procedures, rather than treating it as an external, downstream obligation, is essential to ensure that early‑stage abuse is detected and late‑stage manipulation is prevented. Equally, institutional capacity must be strengthened. Digitalisation does not eliminate the need for skilled oversight; it reshapes it. Member States require the resources, technology, and expertise to operationalise risk‑based supervision at scale. Without this investment, even the most sophisticated procedural architecture will fail under the weight of its own ambitions.

A competitive EU Inc regime capable of driving innovation and supporting legitimate enterprise must be one that pushes back firmly against economic crime. Strengthening AML coordination and ensuring robust institutional capacity are not constraints on growth, they are preconditions for a trustworthy, resilient, and globally credible corporate environment. Only by aligning economic development with economic‑crime prevention can the EU Inc regime truly deliver on its promise.

Oriana Casasola is a Lecturer in Commercial Corporate and Banking Law at the School of Law, University of Leeds 

Ilaria Zavoli is a Lecturer in Law at the School of Law, University of Leeds