EU Inc vs Societas Europaea (SE): Capital, Formation and Worker Participation Compared

The Societas Europaea (SE) is the European company form that already exists; EU Inc is the one the EU is now trying to create. An SE requires EUR 120,000 in subscribed capital, can only be formed by existing companies with a cross-border footprint, and cannot be registered until employee-involvement negotiations conclude. The proposed EU Inc targets the opposite profile: no statutory minimum capital, formation by individual founders, and a 48-hour online fast track capped at EUR 100. The SE is available today and EU Inc is not: the Commission proposal COM(2026) 321 of 18 March 2026 is still working through Parliament and Council.

This comparison covers what each form requires, who can actually use them, what two decades of SE practice show, and why the EU's two earlier attempts at a company form for smaller businesses (the SPE and the SUP) never made it into law.

What the Societas Europaea is

The SE, often called the European Company or Europa-AG, is a supranational public limited-liability company created by Council Regulation (EC) No 2157/2001, adopted on 8 October 2001 after what the Commission itself counts as more than 30 years of negotiations in the Council. It has applied since 8 October 2004.

Three design choices define it. First, Article 4(2) of the Regulation sets a minimum subscribed capital of EUR 120,000. Second, an SE can only be created through four routes listed in Article 2, each requiring an existing company and a cross-border element. Third, Directive 2001/86/EC ties every SE formation to a negotiation with employee representatives, and Article 12(2) of the Regulation blocks registration until that question is settled.

The four formation routes are:

• Merger of two or more public limited companies from different member states
• Holding SE promoted by public or private companies from different member states (or with a two-year foreign subsidiary or branch)
• Subsidiary SE formed by companies or other legal bodies, under the same cross-border condition
• Conversion of a national public limited company that has had a subsidiary in another member state for at least two years

None of these routes lets a founder create an SE from scratch. A German GmbH or French SARL cannot convert directly into an SE either; the merger and conversion routes are reserved for public forms like the AG, SA or plc.

EU Inc vs SE: the comparison table

The proposed EU Inc reads like a point-by-point inversion of the SE's entry barriers. All EU Inc figures below are proposal targets from COM(2026) 321, not law.

The last row matters more than it looks. Both forms delegate unresolved questions to 27 national legal systems, and that mechanism is the SE's most criticised feature: the Commission itself concluded in its 2010 application report that the statute delivers not one uniform company but "27 different types of SEs". Whether EU Inc escapes the same fragmentation is one of the central open questions in the current negotiations, examined in our analysis of national court interpretation risk.

What two decades of SE practice show

The SE found real users, but almost none of them are startups. Registrations grew from 595 in June 2010 (Commission count) to 1,766 by April 2013 (ETUI count) and, per the public tally built on ETUI's company database, passed 3,000 by April 2018, the most recent hard total available; the EU institutions publish no current count.

The composition of those numbers is the striking part. In its 2013 census, the union-linked ETUI research institute identified only 244 of 1,766 registered SEs (14 percent) as "normal" companies with real activity and more than five employees, though it noted data gaps mean the true share is likely higher. About two-thirds of all SEs sit in the Czech Republic per a 2020 academic count, most of them ready-made shelf companies sold on by specialised providers, a pattern the Commission had already flagged in 2010.

Germany is where the SE does real work. The Hans Böckler Foundation counted roughly 700 operationally active SEs in the EU at the end of 2022, more than 400 of them German, including Allianz SE (2006), Porsche Automobil Holding SE (2007), SAP SE (2014), BASF SE and Airbus SE. The same report found that 84 percent of large active German SEs with over 2,000 domestic employees have no parity-codetermined supervisory board, a finding German unions cite when describing the SE as a vehicle for freezing worker participation, a criticism now echoed in the EU Inc debate.

For founders, the Commission's own impact assessment for EU Inc (SWD(2026) 321) states the verdict plainly: the SE is "ill-suited to newly created startups", and its EUR 120,000 capital floor is "out of reach for a seed-stage business operating on minimal funding". The Bruegel think tank put it more bluntly in December 2025: an SE cannot be created from scratch and "does not work for a startup that wants to operate smoothly across the EU".

The missing middle: why the SPE and SUP failed

The EU has known about this gap for a long time. Two earlier proposals tried to give smaller companies a European form, and both died. Their history explains most of the design choices in EU Inc, and most of the resistance to it.

SPE (2008 to 2014): killed by unanimity

The Societas Privata Europaea (COM(2008) 396, 25 June 2008) would have been a European private limited company with EUR 1 minimum capital. It rested on what is now Article 352 TFEU, which requires unanimity in the Council, so every member state held a veto.

Three features made a veto certain: the EUR 1 capital, the right to register in a different member state than the real headquarters, and worker participation pegged to the registered-office state. Germany, backed by its co-determination tradition, would not accept that combination, and per ETUI's record of the March 2009 resolution, the European Parliament demanded a EUR 10,000 floor and a seat-split ban within a year of the proposal. After four failed presidency compromises, the Commission announced the withdrawal in its October 2013 REFIT programme, formalised in the Official Journal in May 2014.

SUP (2014 to 2018): killed by distrust

The Societas Unius Personae (COM(2014) 212, 9 April 2014) was the deliberately shrunken relaunch: single-member companies only, a directive instead of a regulation, and Article 50 TFEU as legal basis so unanimity no longer applied. The Commission's explanatory memorandum recorded the SPE lesson: despite strong business support, "it has not been, however, possible to find a compromise allowing for the unanimous adoption of the Statute among Member States."

The SUP proposed EUR 1 capital and online registration without physical presence within three working days, and it cleared the Council with a general approach in May 2015. It died in Parliament instead: the legal affairs committee split, the employment committee recommended rejection over letterbox-company fears, national parliaments raised subsidiarity objections, and the Council of the Notariats of the EU warned that presence-free registration "rules out any possibility to perform checks on the identity of the founders". The Commission withdrew the proposal on 3 July 2018.

A 2025 study by CEPS for the European Economic and Social Committee draws the summary lesson: the SPE and SUP "highlight the institutional and political limits of optional company-law frameworks in areas closely tied to national traditions and social models".

What EU Inc does differently, and what it repeats

Measured against the four recurring killers (unanimity, worker participation, seat splitting, registration control), the EU Inc proposal makes deliberate moves on each.

It avoids the unanimity trap by using an internal-market legal basis decided by qualified majority, though several member states question that choice, and trackers report that Austria has requested a Council Legal Service opinion; the dispute is mapped in our overview of EU Inc criticism. On worker participation, the Commission left national rules to apply via renvoi, and Parliament's rapporteur René Repasi has proposed tying board-level participation to the place of employment in his draft report of 29 June 2026 with 246 amendments. On registration control, the proposal keeps preventive control but moves it online, with a 48-hour deadline that notaries and some governments argue is too short for real checks; the mechanics are covered in our piece on the digital registration process.

The structural repetition is the renvoi. Like the SE's Article 9, EU Inc's Article 4 sends unregulated matters to national law, and academic critics argue this recreates the "27 versions" problem that made the SE, in Garicano and Malmendier's March 2026 phrase, "more complex than the national systems it was meant to avoid". The negotiations tracked on our timeline will decide how much harmonised substance survives.

What this does not mean

An SE is not obsolete, and EU Inc is not available. For a large group that already spans borders and wants a listed-company structure with seat mobility, the SE remains the only supranational option that exists today (the cooperative SCE, with 24 registrations by November 2011, and the non-profit-making EEIG serve niche purposes), and formations like the Allianz merger and the SAP conversion show it works at that scale.

EU Inc's numbers are proposal targets, not guarantees. The EUR 100 cap applies to the template fast track, not to every formation route, the 48-hour deadline binds the register rather than the founder's full setup process, and every figure could change in trilogue; see the key facts for exact current wording. The SE's EUR 784,000 average cost is likewise a dated figure for large-company formations with heavy advisory fees, not a statutory fee.

Frequently asked questions

What does SE stand for?

SE is the Latin Societas Europaea, "European Company". It is a public limited-liability company under Regulation (EC) 2157/2001, recognisable by the mandatory "SE" suffix in names like SAP SE or Allianz SE.

What is the difference between an SE and a national AG or plc?

An SE is governed first by the EU regulation and its own statutes, and only residually by national public-company law of its seat state. Its practical distinctives are the cross-border formation routes, the ability to transfer its registered office between member states without winding up, and negotiated rather than automatic worker-participation rules.

Can a GmbH become an SE? Can it become an EU Inc?

The forms first: a GmbH is a national private limited company with EUR 25,000 minimum capital and flexible governance, while the SE is a public-company form with EUR 120,000 capital, share-based structure and stricter organ rules, so they serve different company sizes. A GmbH cannot become an SE directly: merger and conversion are reserved for public companies, so it would first need to convert to an AG or participate in a holding or subsidiary SE construction. Under the EU Inc proposal, conversion of existing national companies into the new form is foreseen, which is exactly why unions demand safeguards against conversions aimed at escaping co-determination; our Germany comparison covers this from a founder's angle.

When will EU Inc be available?

Not before the regulation is adopted and applies; the Commission is pushing for agreement by the end of 2026 and the "One Europe, One Market" roadmap sets its overall deadline at the end of 2027, but no application date is fixed. The timeline tracks each step.

Bottom line

The SE and EU Inc are built for different companies at different life stages. The SE answered the corporate-group question and found its users among a few hundred large, mostly German companies, while its entry barriers priced everyone else out. EU Inc is the first proposal aimed at the other end of the market that has both a majority-vote legal basis and momentum from Parliament's 492-144-28 own-initiative vote of January 2026.

Whether it becomes law depends on the same forces that shaped and sank its predecessors, so treat every EU Inc feature as provisional until adoption. For how the proposal compares against the national forms you can actually use today, see the comparison table and the complete EU Inc guide.