Don't wait for EU Inc.: form a B.V., S.à r.l. or SRL now and convert later

EU Inc. is a destination, not a starting date

The European Commission wants a single company form for the whole Union: the EU Inc., often called the 28th regime. It promises online formation, no minimum capital, digital share registers and a common employee option scheme. Some founders now delay incorporation until it arrives.

That is a mistake for most of them. The regulation is still a proposal. Parliament has not voted on it, negotiations between Parliament and the Council have not started, and the earliest realistic date for a first registration is 2028. Meanwhile the business needs a legal entity to sign contracts, employ people, take investment and open a bank account.

The proposal itself offers the bridge. Existing national companies will be able to opt in by conversion. Both the Commission text and the Council mandate allow a domestic conversion once the company has been registered for two years or has approved its first two sets of annual accounts. A company formed in the next few months will meet that condition at about the time the regulation can first apply.

So the practical answer is: form a Dutch B.V., a Luxembourg S.à r.l. or SARL-S or a Belgian SRL now, and set it up so that conversion later is a formality rather than a clean-up. A checker at the end scores your company out of ten.

What has to happen before the first EU Inc. is registered

The Commission published its proposal, COM(2026) 321, on 18 March 2026. It is a regulation based on Article 114 of the Treaty on the Functioning of the EU, so once adopted it applies directly, but member states still need to designate the national law that fills gaps and adapt their business registers. The European Council asked for political agreement by the end of 2026 and repeated that call in October.

The Council moved first. On 23 October 2026 its ambassadors agreed a negotiating mandate, with Malta and Slovakia against and Finland and Hungary abstaining. Parliament is behind. The legal affairs committee (JURI) postponed its vote on 8 October for lack of a majority on employee co-determination, did not vote on 19 October, and as of early November had set no new date. Without a Parliament position there are no trilogues, and without trilogues there is no final text.

The date of application is the real constraint. Under the Commission text the regulation applies from the last day of the 12th month after entry into force, which itself comes 20 days after publication. The Council wants the 21st month and, in a bracketed clause, would keep certain articles from applying before 31 July 2028. The Netherlands has said openly that 12 months is too short for its trade register and that it will push for an extra year.

The concept has broad support: all 26 member states that spoke in the Council's May debate backed it. The date is the problem.

Law and practice: Proposal COM(2026) 321 final, Articles 21 and 109 (Council doc. ST 7498/26); Council mandate, doc. ST 14376/26 of 19 October 2026, Article 109; European Parliament Legislative Observatory, procedure 2026/0074(COD); Tweede Kamer, BNC-fiche EU Inc. of 24 April 2026.

Five things a founder without a company cannot do

Waiting looks free. The cost shows up in what the business cannot do meanwhile.

Signing a client. A corporate customer contracts with a legal entity that has a registration number, a VAT number and an invoice address. Procurement teams at larger buyers then ask for filed accounts and look at how long the supplier has existed. A founder who invoices personally, or through a company abroad, loses deals or signs them on worse terms.

Hiring with options. Early employees accept lower pay for equity. Without a company there is no equity to promise, and a vague promise is worth little to the employee and creates tax and dispute risk for the founder.

Raising from a foreign investor. Investors fund existing companies, often by a convertible loan or a priced round with a shareholders' agreement. An American or British angel will not wire money to a form that does not exist yet. They know the Dutch B.V. and the Luxembourg S.à r.l.; see our note on venture capital in a B.V. or S.à r.l..

Opening a bank account. Banks onboard the company, its directors and its beneficial owners, then watch the account behave. A year of clean transactions helps with every later bank, lender and payment provider. The Council mandate lets member states delay or refuse an EU Inc. registration on anti-money-laundering grounds, so the EU Inc. will not make the bank question go away.

Building filing history. Every year of filed accounts is evidence for credit insurers, tenders, permits and the conversion itself. The two-year or two-accounts condition runs from registration. A company that does not exist cannot start that clock.

Conversion is an option, not a duty. If the EU Inc. ends up heavier than promised, the national company carries on.

Law and practice: Council mandate ST 14376/26, Article 14 (refusal or delay on anti-money-laundering, terrorist-financing or criminal grounds); Proposal COM(2026) 321, Article 21(4).

How a national company becomes an EU Inc., and what the texts leave open

Article 21 of the proposal lists four ways to create an EU Inc. besides forming one from scratch: domestic conversion of an existing company, domestic merger, domestic division, and cross-border conversion, merger or division. The Council mandate keeps all four.

The Council explains the waiting period as protection against rapid and potentially abusive opt-ins and opt-outs. It also states that the substantive rules of the regulation, such as the content of the articles and director disqualification, apply in full to a company that converts. In practice that means your articles must already work as EU Inc. articles, or be rewritten at conversion.

What is not settled. First, the detailed procedure. Domestic conversion is left to national law, and none of the three Benelux states has published how it will handle conversion into an EU Inc. Second, tax. The proposal says it does not harmonise taxation, and the Council mandate expressly preserves national tax-residence, exit-tax and anti-abuse rules. Nothing in either text makes a conversion tax-neutral. Under national rules a change of legal form that keeps the same legal person in the same country is often not a disposal, but each country must confirm that for the EU Inc. Third, the EU Inc. will carry the suffix 'EU Inc.' in its name, so contracts, invoices and bank records will need updating even if the legal person continues.

A cross-border conversion, say a Luxembourg S.à r.l. into a Dutch EU Inc., is a seat transfer with its own creditor and employee procedure and possible exit tax. Pick the country now so a later conversion stays domestic.

Law and practice: Proposal COM(2026) 321, Articles 4, 6, 21 and 41; Council mandate ST 14376/26, recital on formation by conversion and Article 21(4) and (6); Directive (EU) 2017/1132 as amended by Directive (EU) 2019/2121.

Eight things to build into the company from day one

A convert-ready company is not a special form. It is an ordinary B.V., S.à r.l. or SRL drafted and run with the EU Inc. rules in mind.

• Articles written with EU Inc. concepts. The proposal allows several share classes, including shares with multiple or no votes, non-par shares, and free transferability unless the articles restrict it. Use the same building blocks now: an ordinary class for founders, a preferred or non-voting class for investors or staff, and transfer clauses you have chosen rather than inherited from a notary's template. Our note on the shareholders' agreement and the articles covers the twelve clauses that matter.
• Leaver rules and vesting. Good leaver and bad leaver terms, a vesting schedule and a cliff, in the articles where they must bind future shareholders. Investors ask for them anyway.
• Distributions on a solvency basis. The EU Inc. requires a directors' certificate on a balance-sheet test and a 12-month solvency test before any distribution, with joint liability. The Dutch B.V. and the Belgian SRL already work this way under Article 2:216 BW and Articles 5:142 and 5:143 of the Belgian Code. In Luxembourg, document a solvency check alongside the balance-sheet rules.
• Clean cap table and register. EU Inc. shares are dematerialised and recorded in a digital register, and transfers run online. Keep the national register exact now: every issue, transfer and pledge recorded, with the documents behind it. A mismatched cap table stalls funding rounds and conversions alike.
• An EU-resident director. The proposal requires directors to be natural persons and at least one to be resident in the EU; the Council wants this checked at registration. Corporate directors are possible in all three national forms today, so choose individuals now. See foreign directors in Luxembourg and non-resident directors of a Dutch B.V..
• Real seat and substance. The EU Inc. needs its registered office and its central administration or principal place of business in the Union, and the Council adds a power against wholly artificial arrangements. Hold board meetings where the company is registered, keep minutes and an address that is more than a letterbox; see Luxembourg substance and Dutch substance.
• Accounts on time from year one. The two-accounts route to conversion counts approved accounts, and late filing creates liability at home. A very long first financial year delays the second set, so the two-year route may come first. Keep a compliance calendar from the start.
• Bank and KYC file in order. Keep the beneficial-owner filing, source-of-funds evidence and director identity documents current. The same file will serve the bank, the notary and, later, the EU Inc. registration checks.

Employee options. One item needs its own paragraph. The EU-ESO, the proposal's option scheme, exists only inside an EU Inc. It gives board members and employees non-transferable warrants with a waiting period of at least 24 months, taxed only when the shares are sold. The Council has narrowed it to companies with fewer than 750 employees and turnover up to EUR 150 million, removed the clause that national schemes may not be treated more favourably, and kept national anti-abuse and exit-tax rules. Neither text explains how a national plan migrates. So grant options now under the national regime and give the board the power to amend or replace the plan on a change of legal form. In the Netherlands, the government has proposed from 1 January 2027 that employees of recognised start-ups and scale-ups are taxed on 65% of the option benefit, at sale; parliament has yet to adopt it. Our note on employee stock options in the Netherlands sets out the numbers.

Law and practice: Proposal COM(2026) 321, Articles 9, 42, 53 to 61, 72, 78 and 79; Council mandate ST 14376/26, Articles 14(2)(b), 79 and 103a; Dutch Civil Code Book 2, Articles 2:194 and 2:216; Belgian Code of Companies and Associations, Articles 5:142 and 5:143; Dutch Tax Plan 2027, Tax Incentives for Start-ups and Scale-ups Act (bill, Budget Day 15 September 2026).

The Netherlands, Luxembourg or Belgium: which fits which founder

Each country offers a private company that converts well. Choose on your business, not on the EU Inc., and convert domestically.

Netherlands, B.V. Capital from EUR 0.01, a notary who can execute the deed within days of a complete file, and the form that international angels and venture funds recognise. Share transfers need a notarial deed today; the EU Inc. would remove that, which the Dutch government resists. Best for tech founders who expect to raise and hire. Compare it in EU Inc. or Dutch B.V..

Luxembourg, S.à r.l. or SARL-S. The S.à r.l. needs EUR 12,000 of capital, but since the law of 18 May 2026, in force on 2 June 2026, a new company can subscribe it at incorporation and pay it within twelve months. The SARL-S starts from EUR 1 for individual founders with a trading activity. Best for founders who need a credible counterparty for banks, investors and holding structures, and who accept the business permit. Compare it in EU Inc. or Luxembourg S.à r.l. and S.à r.l. or SARL-S.

Belgium, SRL. No minimum capital, but sufficient initial equity and a two-year financial plan for the notary, with founder liability if the company fails within three years on manifestly insufficient equity. Distributions already pass a net-asset and a 12-month liquidity test, close to the EU Inc. model. Best for founders who will run the business from Belgium with Belgian staff. Compare it in EU Inc. or Belgian SRL.

For a side-by-side view of all three, see Belgium, the Netherlands or Luxembourg.

Law and practice: Dutch Civil Code Book 2, Articles 2:178, 2:196 and 2:394; Luxembourg Law of 10 August 1915 as amended by the Law of 18 May 2026 (deferred payment of S.à r.l. capital); Belgian Code of Companies and Associations, Articles 5:3, 5:4, 5:16 and 5:142 to 5:143; Guichet.lu, 'Filing annual financial statements with the RCS'; National Bank of Belgium, 'When to file?'.

Score your convert-readiness

Answer ten questions. Each 'Yes' scores one point. Some gaps are marked as priority because they are conditions in the EU Inc. texts, or because they take longest to fix. The checker is a planning aid built on the Commission proposal and the Council mandate; the final regulation may change the conditions.

When the regulation is adopted, we will publish what changes for conversions in each Benelux country and contact everyone on our list first. You can join the EU Inc list now.

Forming now and converting later: frequent questions