EU Inc Capital Requirements: The 1 Euro Minimum and What It Means

EU Inc has eliminated minimum capital requirements: founders can incorporate with €1 or even €0 in share capital, paying no money upfront. This breaks from the traditional European model where capital serves as creditor protection, shifting instead to director liability and solvency tests used in Delaware and the UK.

The European Commission's March 18, 2026 proposal (COM(2026) 321) specifies registration within 48 hours, for less than €100 and with no minimum share capital requirements . The proposal allows companies to start with symbolic capital while protecting creditors through balance sheet and solvency tests rather than locked-up funds.

The Revolutionary €1 Minimum Capital Requirement

The preferred option was to introduce EUR 0 or 1 minimum capital but no paid-in share capital for incorporation with harmonised creditor safeguards , according to the Commission's impact assessment document. This means founders face no upfront funding barrier, a stark departure from decades of European company law.

EU Inc. companies may be incorporated with zero minimum capital, with no requirement to pay up share capital prior to incorporation. Creditor protection would be maintained through harmonized director liability rules, including mandatory balance sheet and solvency tests before distributions to shareholders.

The approach represents what legal scholars describe as a shift from the traditional continental model, where a fixed minimum capital serves as an ex ante guarantee, to a functional approach focused on the company's actual ability to meet its obligations as they fall due, akin to systems developed in UK and Delaware corporate law .

The framework for distributions to shareholders replaces the traditional capital-based model of creditor protection with a dual test derived from US law: a balance sheet test and a solvency test. Directors must certify that the company's assets will exceed its liabilities following the distribution, and that the company will be able to pay its debts as they fall due over the subsequent twelve-month period.

How EU Inc Compares to National Requirements

EU Inc sits at the bottom of Europe's capital requirement spectrum. Here's how it compares to the main national limited liability forms:

The former Belgian Companies Code required a minimum share capital of EUR 18,550 at the incorporation of a BVBA/SPRL. This requirement no longer exists for the incorporation of a BV/SRL as the "share capital" concept has been abolished , but Belgium still requires a financial plan demonstrating sufficient equity.

Germany's traditional GmbH requires €25,000 in capital, half of which must be paid in before registration. While Germany introduced the UG (mini-GmbH) with €1 minimum capital in 2008, notarization is mandatory and founders must retain 25% of annual profits until they reach €25,000 capital.

The Dutch BV eliminated minimum capital in 2012, but notarization is mandatory and formation still takes 1-2 weeks with professional fees of €500-1,000.

France's SAS and SARL now have no minimum capital requirement, but lack the pan-European recognition that EU Inc offers. Each requires separate formation in each jurisdiction where you operate.

The Sub-€100 Total Formation Cost Breakdown

The Commission has capped total formation costs at €100 when using standardized templates, making EU Inc the cheapest company formation in Europe.

The regulation would require founders using the standardized template and registration, including preventive control by administrative, judicial, or notarial authorities, to complete all relevant forms within 48 hours at a maximum cost of €100 .

Compare this to typical national formation costs:

Germany (GmbH): €1,500-3,000 total

• Notary fees: €800-1,500
• Commercial register: €150
• Publication: €150-200
• Legal/accounting advice: €500-800

Belgium (BV/SRL): €1,500-3,000+ total

Registration costs vary depending on notary fees, capital deposit, and service provider support. A general estimate is from around €3,000+

Netherlands (BV): €500-1,000 total

• Notary: €300-600
• Chamber of Commerce: €50
• Legal advice: €200-400

Bulgaria (OOD): €135-500 total

Government registration fee: EUR 28 (electronic filing). Minimum share capital: EUR 1. Legal fees for full formation: EUR 500-1,500

The €100 EU Inc cap includes registration, preventive control, and issuance of the company certificate. It excludes only truly optional add-ons like premium legal structuring, accounting setup, or trademark registration.

"It will give all European innovative companies the possibility to register once and for all in 48 hours, for maximum 100 euros, with no need for a bank account or with no minimum shared capital requirements."

Source: Stéphane Séjourné, Executive Vice-President for Prosperity and Industrial Strategy, European Commission press conference, March 18, 2026

The cost advantage compounds when expanding cross-border. A startup operating in five EU countries today might spend €5,000-15,000 forming separate entities or branches. EU Inc does it once, for under €100.

What Low Capital Means for Liability and Creditor Protection

The elimination of minimum capital does not eliminate creditor protection. EU Inc shifts from ex ante capital buffers to ex post liability mechanisms.

No minimum capital is required: creditor protection is ensured through directors' duties and solvency and balance-sheet tests applied at the time of distributions and capital operations .

Director Liability Framework

Directors must certify before any distribution (dividends, share buybacks, capital reductions) that:

1. Balance sheet test: The company's net assets will remain positive after the distribution
2. Solvency test: The company can pay its debts as they fall due for the next 12 months

Directors must certify that the company's assets will exceed its liabilities following the distribution, and that the company will be able to pay its debts as they fall due over the subsequent twelve-month period .

This follows the model introduced in Belgium (2019) and the Netherlands (2012) , where the capital concept was similarly abolished or minimized.

Directors who approve distributions that fail these tests face personal liability for losses to creditors. This creates strong incentives to maintain genuine solvency, rather than simply preserving a static capital number that may bear no relation to actual financial health.

What This Means for Creditors

The traditional continental model, where a fixed minimum capital serves as an ex ante guarantee, shifts to a functional approach focused on the company's actual ability to meet its obligations as they fall due .

Creditors can no longer rely on a capital cushion, but they gain:

1. Real-time solvency assessment: Directors must evaluate actual ability to pay debts, not just maintain a number on paper
2. Director liability: Personal recourse against directors who approve improper distributions
3. Transparency: Public disclosure through the Business Registers Interconnection System (BRIS)
4. Liquidation protections: Simplified winding-up procedures for insolvent EU Inc startups

Existing EU creditor protection rules remain fully applicable: fraudulent transfer laws, wrongful trading prohibitions, and insolvency regulations still apply to EU Inc companies.

The shift follows academic consensus that the "share capital" is not an efficient mechanism to protect third parties (creditors of the company) . A €25,000 capital requirement offers little protection when a company has €1 million in debts.

Practical Impact on Funding

For bootstrapped founders, €1 capital means genuine accessibility. For venture-backed startups, it means flexibility: founders can issue shares at any price without navigating par value restrictions that plague many national systems.

The framework adopts true no-par value shares as the default rule (unless otherwise stipulated in the articles of association), and allows extensive flexibility in the design of share classes. It also offers considerable freedom with regard to the issuance of new shares and instruments conferring rights to acquire shares .

However, proposed Art 4(2) provides that matters not covered by the Regulation or articles of association shall be governed by national law. This gap-filling technique implies that in practice there will not be a single European company form, but rather national variants . Creditor protection details not specified in the regulation will follow the law of the registered office Member State.

Strategic Implications for Startups and Digital Businesses

For Early-Stage Founders

The €1 minimum removes barriers that national requirements create:

• No bank deposit: Unlike German GmbH (€12,500 minimum deposit before notarization), EU Inc requires no upfront funds
• No waiting: Capital need not be "paid in" before operations begin
• No reserve requirements: No obligation to retain earnings until a capital threshold is met (unlike German UG)

This particularly benefits:

• Pre-revenue startups testing product-market fit
• Solopreneurs and digital nomads
• Non-EU founders without European bank accounts
• Students and first-time entrepreneurs

For Venture-Backed Companies

These features make the EU Inc particularly attractive for venture capital and early-stage financing, while also enabling all companies to develop tailored financing solutions .

The no-par-value share structure eliminates par value complications that create friction in:

• Down rounds (issuing shares below previous prices)
• SAFEs and convertible notes (conversion at variable prices)
• Multiple preferred share classes with different economics
• Employee stock option exercises at low strike prices

Investors can deploy capital through modern financing instruments, including Simple Agreements for Future Equity (SAFEs), convertible loan notes, and warrants without legal uncertainty about whether these instruments comply with national capital maintenance rules.

For Cross-Border Operators

The core idea is simple: one company, one set of rules, all 27 EU member states . Businesses operating in multiple countries avoid:

• Repeated formation costs (€500-3,000 per country)
• Multiple notary appointments
• Navigating 27 different minimum capital rules
• Annual filing fees in each jurisdiction
• Currency conversion for capital deposits

A SaaS company serving customers in Germany, France, and Spain can incorporate once, for under €100, with €1 capital, and operate legally in all three from day one.

The Tax and Insolvency Gap

The strategic picture has limits. The public readout leaves safeguards, legal certainty, national labour rules, insolvency, tax, minimum capital, and the Article 114 TFEU legal-basis question as negotiation points in ongoing Council negotiations.

Tax treatment remains national: an EU Inc pays corporate tax based on where it has taxable presence, following existing permanent establishment rules. The regulation does not harmonize tax.

EU Inc. leaves labour rights, corporate taxation and AML untouched, and on employee participation it applies the rules of the Member State of the registered office , according to Commissioner McGrath's May 4, 2026 presentation to the JURI Committee.

Insolvency follows a hybrid model: the regulation includes simplified winding-up procedures for insolvent startups, but substantive insolvency law remains partially national.

For digital businesses with no physical presence, EU Inc offers material advantage. For businesses with employees, offices, and inventory in multiple countries, the gains are real but not transformative: you still navigate 27 tax codes and labor regimes.

Competitive Positioning

The initiative responds directly to calls from the Draghi and Letta reports, and it aims to address structural barriers that have hindered European startups and scaleups from growing and competing at global scale. The EU has 27 national legal systems, with over 60 available company forms for limited liability companies. This fragmentation creates legal uncertainty, high compliance costs, and barriers to cross-border expansion .

The €1 minimum capital, sub-€100 formation cost, and 48-hour timeline position EU Inc as the fastest, cheapest company formation in Europe. For digital-first founders, it eliminates the primary objection to European incorporation: cost and complexity.

Compare to alternatives:

• Estonian e-Residency + OÜ: €190 registration + €100-300 annual, but single-country
• Delaware LLC: $90 state fee + $300 registered agent, but US tax filing complexity for EU residents
• UK Ltd: £50 registration, but post-Brexit = outside single market

EU Inc vs Estonian e-Residency and EU Inc vs Delaware LLC explore these comparisons in depth.

What This Means for You Now

The regulation is under negotiation. The European Parliament backed the concept 492-144-28 (77% support) on January 20, 2026, and EU leaders endorsed an end-2026 deadline for political agreement . The Commission proposal was published March 18, 2026.

If you're founding a company in the next 6 months: Form under national law. EU Inc will not be available until at least 12 months after the regulation enters force, likely 2028 at earliest.

If you're planning for 2027-2028: Monitor our timeline tracker and consider whether EU Inc's zero-capital, pan-EU model fits your business. Key pending issues include:

• Final text on director liability standards
• Conversion procedures from national forms to EU Inc
• Integration with the European Business Wallet for digital identity
• Tax number issuance timelines (currently a weeks-long bottleneck even in fast jurisdictions)

If you're already operating: Existing companies can convert to EU Inc through domestic conversions or cross-border mergers, divisions, or conversions . Evaluate whether the pan-EU recognition and simplified governance justify conversion costs once procedures are finalized.

For founders choosing jurisdiction today: If capital requirements are blocking your launch, consider the current low-capital options: Bulgarian OOD (€1), Dutch BV (€0.01), or German UG (€1). Each requires notarization and follows national rules, but can later convert to EU Inc when available. See country-specific analysis for detailed comparisons.

For investors and advisors: The creditor protection shift from capital to director liability aligns European corporate law with UK and US models. Due diligence should focus on director certification processes, not capital adequacy. The no-par-value structure enables cleaner cap tables and simpler financing rounds, but national tax treatment of convertible instruments remains fragmented.

The €1 minimum capital is not just symbolic. It represents a fundamental shift in how Europe thinks about limited liability, creditor protection, and barriers to entrepreneurship. Whether you pay €1 or €0, you're incorporating into a system designed for modern digital business, not 19th-century industrial capital.

Read the complete EU Inc guide for registration procedures, governance rules, and cross-border operation details, or check if EU Inc fits your situation with our readiness tool.