Social security institutions call for clarification regarding the company seat.

It is an ambitious initiative. The European Union is currently developing a new legal form intended to facilitate the establishment of companies and enable them to operate under a uniform set of company law rules across all Member States of the European Union (EU). This new corporate form would exist alongside the existing national company law regimes, which continue to differ from one Member State to another.

The proposed EU Inc. is intended to be a flexible and agile corporate structure, administered entirely through digital means, subject to simplified regulatory requirements, and designed to attract both investment and talent (for further information, see DSV News 05/2026). While some stakeholders regard the EU Inc. as a promising instrument for enhancing European competitiveness, others express concerns about the potential erosion of established social standards. Interested parties were invited to submit comments on the European Commission’s draft Regulation of 18 March 2026 until 25 July 2026.

The company seat as a key issue

The DSV also participated in the consultation and highlighted a number of legal and practical shortcomings in its contribution. Article 4 of the draft Regulation already raises concerns, as the proposed definition of the registered seat of an EU Inc. may give rise to legal uncertainty. Under the draft Regulation, the seat of an EU Inc. is deemed to be located in the Member State in which the company is registered in the business register. This location does not necessarily have to coincide with the place of central administration or the company’s principal place of business.

Registration alone is insufficient

Within the framework of the EU social security coordination rules, the concept of a company’s seat is understood differently. In many cases, the applicable legislation is determined by the Member State in which the company takes its key management decisions and where its central administration is located. This approach is reflected in Article 14(5a) of Implementing Regulation (EC) No 987/2009. This principle must also apply to the EU Inc. in order to ensure the coherent and effective application of the social security coordination framework, whose origins date back to the 1950s. It is therefore essential that the ongoing legislative process clarifies that the EU coordination regulations apply in full to the EU Inc.

Ensuring legal certainty

The differing approaches to determining a company’s seat create legal uncertainty for both social security institutions and insured persons. This is particularly relevant for individuals pursuing economic activities in two or more Member States whose main activity is not carried out in their Member State of residence. In such cases, it is the company’s seat, rather than the employee’s place of residence, that determines which Member State’s social security legislation applies. It is therefore crucial to provide legal certainty by clarifying that, also in the case of the EU Inc., the rules governing the determination of the company seat under the social security coordination framework prevail and leave no room for doubt regarding the applicable legislation.