28/10/2026
Open letter
EFBWW is seriously concerned following the position adopted by the Council on the European Commission proposal for a Regulation of the European Parliament and of the Council on the 28th Regime Corporate Legal Framework - 'Eu Inc.'
The construction sector is deeply connected to local labour markets, safety regulations, licensing requirements, vocational qualification systems, and sectoral collective bargaining arrangements. National authorities must be able to identify who is responsible for workers on site, who is liable for wage payments, and who bears responsibility for health and safety compliance. Furthermore, it is well known and documented[1] that the construction sector requires specific attention as it is highly exposed to:
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· Labour exploitation and undeclared work.
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· Complex subcontracting chains that obscure responsibility.
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· Social dumping and abusive posting arrangements.
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· Bogus self-employment and letterbox companies.
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· VAT carousel fraud and other forms of organised economic crime.
National labour inspectorates, social partners, and enforcement authorities across Europe have repeatedly highlighted these risks. Construction sites are physical workplaces where compliance with health and safety, wage, social security, and collective bargaining obligations requires direct and effective oversight.
The construction sector is fundamentally different from the start-up ecosystem that originally motivated the debate on the 28th Regime. The rationale for EU Inc. has largely been based on helping innovative start-ups and scale-ups grow across the Single Market. Construction companies, however, operate in highly regulated environments, employ large numbers of mobile workers, rely on extensive subcontracting arrangements, and present significant occupational health and safety risks. The consequences of weak oversight in this sector are immediate and severe, affecting not only workers but also public finances, honest businesses and the integrity of the internal market. Without the necessary safeguards, the proposed regime will lead to:
· Increase of letterbox companies in construction.
· Undermining national labour laws and collective agreements.
· Creating unfair competition for compliant employers.
· Reducing accountability for labour and tax violations.
· Facilitating cross-border corporate structures that are difficult for workers and authorities to challenge.
The proposed EU Inc framework must not come at the expense of workers' rights, fair competition, and effective enforcement of national labour standards. The fight against labour exploitation, social fraud, and unsafe working conditions cannot become collateral damage of corporate simplification.
We therefore call on European and national legislators to close these loopholes and:
Brussels, 28 October 2028
EFBWW Executive Committee
[1] Europol, 2024, Decoding the EU’s most threatening criminal networks, available at https://www.europol.europa.eu/publication-events/main-reports/decoding-eus-most-threatening-criminal-networks. European Labour Authority, 2023 Construction sector: Issues in information provision, enforcement of labour mobility law, social security coordination regulations, and cooperation between Member States
