Two very different animals
The GmbH has been Germany's default company structure since 1892. It has 130 years of case law, banker recognition, and investor familiarity behind it. When a German VC sees a GmbH on a cap table, they know exactly what they're dealing with.
EU Inc doesn't exist yet. It's a Commission proposal published in March 2026. Comparing them today is partly comparing a proven product with a promise — but it's a promise that matters, because the decision you make in 2024–2026 may need to be revisited when EU Inc launches.
| Factor | GmbH | EU Inc (proposed) |
|---|---|---|
| Minimum share capital | €25,000 (€12,500 at registration) | €1 |
| Incorporation time | 1–4 weeks (notary + commercial register) | 48 hours (target, fully digital) |
| Notary required | Yes, mandatory | No |
| Cross-border EU recognition | Reputation-based (strong in DE, varies elsewhere) | Legal recognition in all 27 states |
| Investor familiarity | Very high (especially German/DACH VCs) | Unknown — new structure |
| Annual compliance cost estimate | €3,000–€15,000/yr (lawyer + accountant) | TBD — likely lower for single-country ops |
| Share transfer mechanism | Notary required for share transfers | Digital, simplified (proposed) |
| Stock exchange listing | Requires conversion to AG | Direct path proposed |
| When available | Now | Earliest 2029–2030 |
The capital requirement gap
The GmbH requires €25,000 minimum share capital, with €12,500 paid in at registration. This isn't just a barrier — it's a signal. German banks and investors have historically used the capital requirement as a basic credibility filter.
EU Inc proposes €1. This is identical to what the French SAS offers (technically €1 minimum) but more radical in context, because the EU Inc is designed to operate pan-European, not just in one market where the €1 minimum is culturally accepted.
Having incorporated a GmbH in Munich in 2019, I can tell you the €25,000 requirement is genuinely painful for a bootstrapped founder. You're not losing the money — it sits in a bank account — but it's illiquid, it costs you banking fees, and it's paperwork for months. The €1 proposal for EU Inc is genuinely disruptive. The question is whether the market will take a €1-capital EU Inc seriously in 2030 the same way it takes a €25,000 GmbH seriously in 2026. My honest answer: give it 5 years of market data, then we'll know.
The notary bottleneck
German incorporation requires a notary — not just for the initial setup, but for every share transfer, every major amendment to the articles of association, and in some cases for board resolutions. This creates ongoing cost and friction that is easy to underestimate when starting out.
EU Inc proposes eliminating the notary requirement entirely, replacing it with a digital process. This alone would save most GmbH founders €1,500–€5,000 in notary fees over the first three years of operation.
Cross-border operations: where the gap is real
Here's the scenario where EU Inc clearly wins over a GmbH: you're building a B2B SaaS with customers in Germany, Italy, Spain, and France. You want to hire employees locally in each country. You want to invoice from a single legal entity recognised in all four countries.
With a GmbH, you incorporate in Germany, then set up branch offices or subsidiaries in each other country. Each branch or subsidiary requires local registration, local accounting, potentially local audits. This typically adds €5,000–€20,000 per country in setup costs, plus annual recurring compliance.
With EU Inc (when available), the single entity is legally recognised in all 27 member states by default. You still need to comply with local employment law when hiring, but the company itself doesn't need to be re-registered in each country.
Investor perception: the honest picture
For German-first or DACH fundraising, the GmbH is still the gold standard in 2026. Most German VCs have GmbH-specific term sheets, legal precedents, and portfolio management processes built around it. An EU Inc, even when available, will face skepticism from investors who prefer known structures.
For pan-European or US fundraising, the picture flips. US investors have always found European corporate structures opaque and fragmented. An EU Inc with a clean, simple, EU-wide legal identity might actually be more attractive to a US VC doing a €10M Series A than navigating which of 27 national structures to deal with.
| Investor type | GmbH preference | EU Inc preference |
|---|---|---|
| German/DACH VC | Strong | Unknown (new) |
| UK VC | Moderate | Potentially strong |
| US VC / crossover | Weak (foreign) | Potentially moderate |
| EU multi-country VC | Moderate (Germany-centric) | Likely strong |
| Angel investors | Depends on geography | TBD |
When to choose GmbH in 2026
- Your primary market is Germany or Austria
- You're raising from German or DACH investors in the next 2–3 years
- You need the credibility signal of €25,000 paid-in capital for banking relationships
- Your legal and compliance team already knows German law
- You're building a business where notary involvement is normal (e.g. real estate, financial services)
When EU Inc will make sense (when available)
- You're building a pan-European business from day one with no single dominant market
- You're a non-EU founder looking for the simplest single-entry point to the EU market
- You want to minimise legal fragmentation costs as you hire across member states
- You're building for US investors who want clean, simple EU structures
- You're a solo founder or micro-business where €25,000 capital is a real barrier
FAQ
Can I convert my GmbH to an EU Inc later?
The current proposal mentions voluntary conversion mechanisms but doesn't specify the process or cost. Based on the Societas Europaea (SE) precedent, conversion will likely involve notary involvement and a waiting period. Details won't be clear until the final law is adopted.
Which is cheaper to run long-term?
For a single-country German operation, a GmbH and an EU Inc will likely have similar ongoing costs. For multi-country operations, EU Inc should be significantly cheaper — no need to maintain subsidiary entities in each country.
Is GmbH recognised outside Germany?
Yes, by reputation — the GmbH is well known and respected across Europe. But "recognised by reputation" is different from "legally recognised as a domestic structure." In France or Spain, a GmbH is a foreign company and requires specific compliance steps to operate.
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Join the Waiting ListSources
- German GmbHG (GmbH-Gesetz) — current text
- European Commission proposal COM/2026, IP/26/614
- Bundesanzeiger / German Commercial Register statistics, 2025