S.EU vs GmbH vs SAS vs BV: Choosing the Right European Company Structure

If you're incorporating a company in Europe today, you have one set of options. In a few years, you'll likely have another: the S.EU, the new pan-European company structure under EU Inc.

But how does the proposed S.EU actually compare to the national structures founders currently use? And how should you think about the choice?

This guide compares the S.EU with the four most common structures for European startups: Germany's GmbH, France's SAS, the Netherlands' BV, and Estonia's OÜ.

Quick Comparison Overview

Understanding the S.EU (EU Inc)

The Unified European Company, or S.EU, doesn't exist yet. But based on the Commission's stated intentions and European Parliament recommendations, here's what we know:

Designed for scale. The S.EU is explicitly designed for companies planning to operate across multiple EU markets. Its value proposition is eliminating the need for separate national subsidiaries.

Digital-first registration. The target is 48-hour, fully online incorporation. No notary appointments, no paper documents, no in-person requirements.

Minimal capital barrier. A €1 minimum capital removes one of the traditional hurdles to incorporation. (Compare to Germany's €25,000.)

Unified governance rules. One set of requirements for board structure, shareholder rights, and reporting—not 27 different national frameworks.

Harmonized stock options. Perhaps most significant for startups: a single framework for employee equity that works the same way regardless of where employees are located.

Seamless mobility. An S.EU can relocate its registered office across member states without dissolution—a process that's currently complex and expensive.

The main uncertainty: exactly how the S.EU will handle areas where national law still applies, particularly tax and employment.

German GmbH: The European Standard

The Gesellschaft mit beschränkter Haftung (GmbH) is the most common structure for German startups and has become familiar to European VCs.

Advantages:

• Well understood by investors and advisors

• Robust legal framework with extensive case law

• High credibility with customers and partners

• Large talent pool familiar with GmbH employment

Disadvantages:

• €25,000 minimum capital requirement (€12,500 must be paid immediately)

• Requires German-language notarized documents

• Formation takes 2-4 weeks minimum

• Complex and often unfavorable stock option treatment (taxed as income)

• Operating outside Germany requires separate structures

• Less popular with foreign investors

Best for: Founders primarily targeting the German market, those seeking German institutional investment, companies wanting the credibility of a German entity.

French SAS: Flexibility and Speed

The Société par Actions Simplifiée (SAS) has become increasingly popular with French and European startups due to its flexibility.

Advantages:

• Highly flexible governance (shareholders can define structure)

• €1 minimum capital

• Faster formation than GmbH (3-5 days)

• BSPCE stock option program is founder-friendly

• No notary required for most procedures

Disadvantages:

• Documentation in French

• Less familiar to non-European investors

• Social charges on employment are high

• Operating outside France requires separate structures

Best for: Founders focused on French market, those prioritizing governance flexibility, startups where French employment costs are acceptable.

Dutch BV: The Holding Favorite

The Besloten Vennootschap (BV) has become the go-to holding company structure for many European startups, particularly those seeking international investment.

Advantages:

• Near-zero minimum capital (€0.01)

• Strong tax treaty network

• English commonly used in practice

• Flexible corporate governance

• Online notary formation possible

• Favorable participation exemption for holding structures

Disadvantages:

• Still requires notary involvement

• Operating outside Netherlands requires separate structures

• Some complexity in meeting substance requirements

• Not ideal for companies with significant Dutch operations (better as holding)

Best for: Holding company structures, founders seeking Dutch tax efficiency, companies wanting English-language corporate documents.

Estonian OÜ: Digital Pioneer

Estonia's Osaühing (OÜ) pioneered digital-first company formation through e-Residency, making it accessible to founders worldwide.

Advantages:

• True digital formation (1-2 days)

• Full digital management via e-Residency

• No physical presence required

• €2,500 capital can be paid over time

• English as working language

Disadvantages:

• Small domestic market

• Less familiar to many investors

• Limited local banking options

• Operating outside Estonia requires separate structures

• Stock option framework limited by market size

Best for: Founders wanting fully digital operations, location-independent businesses, those testing ideas before scaling.

How S.EU Changes the Calculus

When (not if) EU Inc becomes available, the comparison changes fundamentally because the S.EU isn't competing on the same dimension as national structures.

The S.EU advantage: scale.

If you're building a company that will operate in three or more EU countries, an S.EU eliminates the structural overhead of multiple subsidiaries. Today, a German startup expanding to France and Spain needs a GmbH plus a French branch/subsidiary plus a Spanish branch/subsidiary. With an S.EU, you'd have one entity operating in all three countries.

This isn't just administrative convenience. Multiple subsidiaries mean:

• Multiple sets of accounts and audits

• Multiple local legal advisors

• Multiple employment relationships for mobile employees

• Complex intercompany arrangements

• Transfer pricing considerations

When national structures still make sense.

Despite these advantages, national structures won't disappear. They'll remain appropriate when:

• Your business is focused on a single market

• You need specific features of national law (certain tax treatments, regulatory frameworks)

• You're acquired by a company using national structures

• Local customers or partners expect a national entity

The Hybrid Approach

Many companies will likely use hybrid structures in the future as well: an S.EU operating entity with a Dutch BV holding company, for example, or an S.EU subsidiary of a Delaware parent for companies with US investors.

The flexibility to choose and combine structures is exactly what the 28th Regime is designed to enable. EU Inc adds an option; it doesn't eliminate others.

Decision Framework

Choose S.EU (when available) if:

• You plan to operate in 2+ EU countries within 2 years

• You want to hire employees across multiple EU countries with consistent equity

• Minimizing corporate structure complexity is a priority

• You want maximum flexibility for future expansion or relocation

• You plan to attract international investors

Stick with national structure if:

• Your market is primarily domestic

• You need specific features of national law

• Your investors have strong preferences

• You're incorporated already and restructuring isn't worth it

The Tax Question

One crucial factor the S.EU doesn't address: corporate tax.

Taxation remains a member state competence. An S.EU will be taxed somewhere; presumably where it has its registered office and/or where its management operates. The S.EU doesn't create tax harmonization or any special tax status.

This means the current considerations around tax-efficient structures (Dutch holdings, Irish IP, etc.) won't change because of EU Inc. Founders should continue working with tax advisors on optimal structuring.

What About the US?

Many European founders wonder: Should I still do a Delaware Flip?

The S.EU addresses some, but not all, reasons for US incorporation:

S.EU addresses:

• European market fragmentation

• Stock option complexity

• Corporate structure overhead

• Cross-border operations

S.EU doesn't address:

• US investor preferences (depends on S.EU acceptance)

• US market access (no equivalent to S.EU recognition)

• US VC deal terms

• NASDAQ/NYSE listing (requires US structure)

For companies raising from US VCs and/or planning US expansion, Delaware Flips may remain common until EU Inc is fully accepted. For companies focused on Europe with European investors, S.EU becomes a strong alternative.

Practical Timeline Considerations

If you're incorporating today, you can't use an S.EU; it doesn't exist. So what should you do?

Incorporating in 2026:
Choose a national structure that works now, but select one that offers reasonable conversion options. The S.EU is designed to allow conversions without dissolution.

Planning for 2027-2028:
The S.EU may be available. If your incorporation can wait and your business needs pan-European operations, monitor the legislative timeline closely.

Already incorporated:
No need to do anything immediately. When S.EU becomes available, evaluate whether conversion makes sense based on the final legislation.

The Bottom Line

The S.EU will add a powerful new option to the European founder's toolkit; one specifically designed for companies building across borders. But it won't make national structures obsolete.

Smart founders will use the right structure for their specific situation, potentially combining S.EU with national options as hybrid structures. The key is understanding what each option offers and choosing accordingly.

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This comparison is for informational purposes only and does not constitute legal or tax advice. Consult qualified professionals for advice specific to your situation.