EU Inc.: What the New European Legal Form Means for German Founders

On 18 March 2026, the EU Commission published its formal proposal for a new European corporate form: the EU Inc. If adopted, it would be the first pan-European company structure accessible to any founder, in any member state, without minimum capital.

This is not law yet. But the proposal is concrete, the timeline is aggressive, and founders should understand what is coming.

What is the EU Inc.?

The EU Inc. is proposed as a "28th regime." It does not replace the GmbH, UG, or any other national form. It sits alongside them as an additional option, governed directly by an EU regulation.

Think of it as Europe's answer to the Delaware C-Corp. A single legal form, recognized in all 27 member states, with standardized rules for founding, governance, and shares.

The Societas Europaea (SE) already exists as a European company form, but it requires EUR 120,000 in minimum capital and a complex cross-border formation process. The SE was designed for large corporations. The EU Inc. is designed for founders.

How it compares

Five things that matter

Digital founding in 48 hours. The entire process runs through a central EU register with standardized documents and electronic signatures. No notary appointment, no weeks waiting for the Handelsregister (commercial register). Maximum cost: EUR 100.

No minimum capital. Unlike the GmbH with its EUR 25,000 requirement under Section 5 GmbHG, the EU Inc. has no mandatory share capital. Shares can be issued without a fixed nominal value. This is closer to US or UK company structures than anything currently available in Germany.

Flexible share classes. Preferred shares, multi-voting shares, conversion rights, and option rights are built into the framework. German GmbH law makes non-standard share structures possible but awkward. The EU Inc. makes them default.

EU-ESOP for employee participation. The proposal includes a standardized employee stock ownership program that works across borders. Shares would be taxed only on actual sale, not on grant or vesting. If implemented as proposed, this solves the dry income problem (Dry-Income-Problematik) that plagues German employee equity. I wrote about the current workaround using VSOPs before.

Cross-border recognition without re-registration. An EU Inc. founded in Germany is automatically recognized in France, the Netherlands, or any other member state. No branch registration, no local legal opinions, no parallel compliance.

What stays national

The EU Inc. changes the corporate wrapper. It does not change the tax bill.

Tax rates, VAT obligations, employer contributions, and labor law remain governed by the member state where the company operates. A German-resident EU Inc. still pays Gewerbesteuer (trade tax), Koerperschaftsteuer (corporate tax), and follows German employment law. Cross-border B2B sales continue to follow standard EU reverse-charge VAT rules regardless of the company's legal form.

This is important because the EU Inc. does not create tax arbitrage between member states. It creates structural simplicity. The holding structure advantages of German corporate tax law still apply to a German EU Inc. the same way they apply to a GmbH. EU-level regulations like the AI Act also apply regardless of legal form.

What to do now

Do not wait for the EU Inc. to incorporate.

If you are founding a startup today, the GmbH or UG remains the right choice. The EU Inc. is a proposal, not law. Legislative timelines in Brussels slip regularly. Even in the best case, the form will not be available before 2027.

What you can do now:

• Set up your holding structure today. The tax advantages of a German holding are independent of the EU Inc. and must be in place before your operating company gains value.
• Watch the legislation. The Commission and Council aim for political agreement by end of 2026. If achieved, the EU Inc. could be available for founding as early as 2027.
• Plan for flexibility. If you are building a company with cross-border ambitions, the EU Inc. may eventually be a better vehicle than a German GmbH. Structure your shareholder agreements with future conversion in mind.

Open questions

The proposal is ambitious. Some details remain unresolved:

• Registry structure. The current draft uses networked national registers rather than a single EU registry. The German Startup-Verband has criticized this as insufficient.
• Notary opposition. German notary chambers and bar associations have raised concerns about removing notarial requirements. This could lead to compromises during Council negotiations.
• Insolvency rules. The proposal includes startup-specific insolvency reliefs, but the interaction with national insolvency law is still unclear.

Bottom line

The EU Inc. is the most significant European corporate law reform since the SE Regulation in 2001. If adopted as proposed, it would make Europe genuinely competitive with the US for company formation speed, cost, and investor-friendliness.

It will not help you today. But if you are building a company that will operate across European borders, this is worth watching closely. The legislative proposal is real, the political will is there, and the timeline is months, not years.