EU Inc. is the European Commission's proposed pan-European company form (COM/2026/321), currently being negotiated. The Gesellschaft mit beschränkter Haftung (GmbH) is Germany's standard private limited company, governed by the GmbH-Gesetz of 1892, with around 1.5 million entities active. For a plain-English explainer of EU Inc., see What is EU Inc..
Quick verdict
For founders setting up today with a Germany-centred operation, the GmbH is the right call. It is well understood, well litigated, and tax treatment is predictable.
For founders setting up once EU Inc. is law with employees or customers across multiple EU countries, EU Inc. is likely the better choice. It avoids the €25,000 capital lock-in, removes the notary requirement, and registers in 48 hours instead of weeks.
For founders considering a Mini-GmbH (UG) as a low-capital workaround, EU Inc. once available will likely be a cleaner solution. The UG carries reputational baggage that EU Inc. should not.
Side-by-side
| Dimension | EU Inc. (proposed) | German GmbH |
|---|---|---|
| Cost to incorporate | Target under €100, no notary fee | €600–€1,500 typical, including notary, court, and Handelsregister fees |
| Speed | Target under 48 hours | 1–3 weeks, longer with non-resident shareholders |
| Minimum share capital | Zero | €25,000 (€12,500 paid in at incorporation) |
| Notary required | No, fully digital | Yes. Notarised articles of association required by law (§2 GmbHG) |
| Governance | EU regulation defines the framework, including share classes | Managing directors (Geschäftsführer) and shareholders. Co-determination thresholds at 500 and 2,000 employees |
| Cross-border recognition | Recognised by regulation in all 27 EU member states | Recognised under TFEU. Cross-border activity often requires local registration |
| Digital incorporation | Digital-by-default, end-to-end | Online incorporation possible since 2022 (EU Digitalisation Directive transposition), notary still involved |
| Stock options | EU-ESO with tax deferred to disposal event | VSOP/SAR or actual share grants. Tax at exercise unless ZuFinG-style scheme used |
| Tax layer | No EU-specific tax. Taxed where management actually sits | Corporate tax 15% + Solidarity 5.5% + Trade tax 7–17% = ~28–32% effective |
| Status today | Proposal published 18 March 2026, not yet law | Available, established since 1892, ~1.5m active entities |
When the GmbH still wins
Germany-centred operations. If your team, your customers, and your decision-making sit in Germany, the GmbH remains the right choice. Local courts, accountants, and tax advisors all know it. Banks open accounts without questions. Customers see "GmbH" and recognise the form. None of these advantages survive intact for a cross-border setup, but for a Germany-only company they are real.
Predictable case law. The GmbHG dates back to 1892 and has been litigated for more than a century. There is settled case law on every shareholder dispute, every director-liability question, every corporate-veil scenario. EU Inc. on day one will have none of this. Founders who care about legal predictability, particularly in dispute-prone industries, may prefer to wait several years before switching.
Co-determination at scale. Once a German entity passes 500 employees in Germany, employee representatives must hold one-third of supervisory board seats. Above 2,000, half. This is national law, and it applies to a German GmbH because of where the entity is registered. EU Inc. registered in another member state would be subject to the co-determination rules of that member state, not Germany's. This is a feature for some founders and a problem for others, depending on your view of co-determination.
Existing GmbHs. Conversion costs time and legal fees. Unless cross-border friction is actively costing you, sitting tight is rational. Most existing GmbHs that are not actively cross-border should not convert in the first wave.
When EU Inc. would win, once it's law
- You have employees or customers in three or more EU countries.
- You don't want to lock €25,000 into share capital for the registration to clear.
- You haven't yet incorporated, or you're spinning out a new vehicle.
- You want a cleaner stock-option scheme than VSOP/SAR or post-ZuFinG share grants.
- You want to avoid scheduling notary appointments for international shareholders.
The clearest GmbH-vs-EU Inc. delta is the €25,000 capital requirement. It is not a fee, it is locked-up share capital that the company can use, but for cash-tight founders it is real friction. EU Inc.'s zero-minimum-capital target eliminates the whole conversation.
Bottom line
For Germany-only operations, stay with the GmbH. The form is well understood and the local advantages are concrete. For cross-border setups, EU Inc. should be the default once it's available, and the GmbH should be the fallback when local law constraints (typically labour, sometimes tax) make the German form structurally necessary.
For existing GmbHs, conversion is a structured decision: where is the team, where is revenue, where is decision-making, what does the cap table look like. We'll publish a conversion-decision worksheet on the Registration page when the regulation text is final. To be notified, join the waitlist.
Sources
- EU Inc. proposal: COM/2026/321.
- GmbH law (GmbHG): gesetze-im-internet.de.
- German Handelsregister: handelsregister.de.
- Co-determination thresholds: Bundesregierung.
- Full source list on Sources.