EU Inc is a proposed EU regulation; the Council agreed its mandate on 23 October 2026 and Parliament has not voted, so it could not apply before 2028. It would combine the SARL-S's lack of a notary and capital with open ownership, online share transfers and an EU stock option taxed at sale. Tax, accounts and staff delegation stay Luxembourg's. Today the S.à r.l. needs EUR 12,000, payable within twelve months, and the SARL-S EUR 1 to 12,000 for individuals only. Form the national company now and keep it ready to convert.
Luxembourg already has a one-euro company; EU Inc would add a European one
The European Commission wants a single EU company form, EU Inc, that founders could register online in any Member State for a fixed low fee, with no minimum capital, digital shares and an EU employee stock option. It is the centrepiece of what Brussels calls the 28th regime.
Luxembourg founders already choose between two private companies. The S.à r.l. needs EUR 12,000 of subscribed capital and a notary, accepts any owner and is the standard vehicle for holdings and operating companies. The SARL-S starts from EUR 1 without a notary but is reserved for individuals, one per person. Since June 2026 the S.à r.l. capital can be paid within twelve months, which has narrowed the gap.
EU Inc would sit between the two: no notary and no minimum capital like the SARL-S, open to corporate founders like the S.à r.l. But it is a proposal. In November 2026 a founder can only choose between the two Luxembourg forms, and the real question is which one keeps a later switch simple. Our EU Inc hub follows the legislative file.
Proposal
Council mandate 23 October 2026; Parliament has not voted.
EUR 12,000
Subscribed at once, cash within 12 months.
EUR 1 to 12,000
Private deed, individuals only.
23.87%
Luxembourg City 2026, same for every form.
Two texts, no Parliament vote and a date of 2028 at the earliest
The Commission proposal of 18 March 2026, COM(2026) 321, is a regulation under Article 114 TFEU. It would apply directly, with each Member State designating national rules to fill the gaps. On 23 October 2026 Coreper agreed the Council's mandate for negotiations. Malta and Slovakia reportedly voted against, Finland and Hungary abstained, and about ten states, Luxembourg and Belgium among them, were expected to add statements whose content has not been published.
The European Parliament is behind. Its legal affairs committee postponed its vote on 8 October 2026 for lack of a majority on employee participation, and in early November no new date had been confirmed. Trilogues cannot start without Parliament's position. Political leaders want a deal by the end of 2026.
| Point | Commission text | Council mandate |
|---|---|---|
| Application | 12 months after entry into force | 21 months; some articles not before 31 July 2028 |
| Fast track | 48 hours, EUR 100 maximum, EU template articles | 48 hours from payment; not for non-standard articles, contributions in kind or possible director disqualification |
| Checks | Control of articles, capacity, contributions | Plus director identity; up to 10 more working days; refusal on AML or criminal grounds |
| Standard route | 5 working days | 5 working days, national cost recovery |
| Insolvency | Simplified winding-up for insolvent start-ups | Deleted; national law |
| EU-ESO | Tax only on disposal of the shares | Under 750 employees and EUR 150 million turnover; national anti-abuse and exit tax rules kept |
Luxembourg's government has not published a detailed position beyond the Benelux non-paper of May 2026, which welcomed the proposal but asked for stronger anti-money laundering links and respect for employee participation rules. The Luxembourg Chamber of Commerce and Chamber of Skilled Crafts support the proposal but worry about divergent national variants, anti-money laundering timelines and an insolvency chapter they consider unnecessary. The Council has since deleted that chapter.
Even with a deal around the turn of the year, publication and the 12 or 21-month delay mean the first EU Inc companies could not be registered before 2028, on our reading of the timetable.
Law and practice: COM(2026) 321 final, procedure 2026/0074(COD), Articles 4, 14 to 17 and 109; Council mandate, ST 14376/26 of 19 October 2026, Articles 14(2a), 16(1a), 17(2a) and 109; European Parliament Legislative Observatory, 2026/0074(COD); Benelux non-paper forwarded 22 May 2026; joint position paper of the Luxembourg Chamber of Commerce and Chamber of Skilled Crafts (cc.lu).
EU Inc, S.à r.l. and SARL-S compared
The S.à r.l. and SARL-S columns describe Luxembourg law in force. The EU Inc column follows the Commission text, with the Council's main changes.
| Feature | S.à r.l. | SARL-S | EU Inc (proposal) |
|---|---|---|---|
| Formation and time | Notarial deed; one to two weeks from a complete file | Private deed; permit first; three to six weeks | Online; 48 hours with templates, 5 working days otherwise |
| Notary | Yes | No | Not with EU templates |
| Capital | EUR 12,000 subscribed; cash within 12 months since June 2026 | EUR 1 to EUR 12,000 | No minimum; fully paid on issue |
| Owners | 1 to 100, individuals or companies | Individuals only; one SARL-S per person | One or more individuals or companies |
| Share transfers | Private or notarial deed; outsiders need 75% approval, can be lowered to 50% | Same as S.à r.l. | Online with qualified e-signature; free unless articles restrict |
| Managers and residence | Individuals or companies; no residence rule | Individuals only | Natural persons; at least one living in the EU |
| Employee equity | General wage rules; no start-up option regime | Same | EU-ESO, taxed on disposal, within national rules |
| Accounts and audit | Approve in 6 months, file in 1 more; audit above two of EUR 7.5m, EUR 15m, 50 staff | Same | Luxembourg accounting law |
| Employee participation | Staff delegation from 15 employees | Same | Rules of the registration state (Commission text) |
| Tax | 23.87% Luxembourg City; net wealth tax; SOPARFI exemption | Same | National tax; no EU rule except EU-ESO timing |
| Bankability | Known to every bank | Banks and large clients cautious | New, no track record |
| Conversion | To SA or EU Inc (after 2 years or 2 accounts) | To S.à r.l. by notarial deed | In or out after 2 years or 2 accounts |
Two differences matter more in Luxembourg than in the Netherlands. First, an S.à r.l. share transfer already needs no notary, so EU Inc's online transfers bring less here than they do against a Dutch B.V. Second, the SARL-S restrictions on ownership are exactly what EU Inc would remove.
Law and practice: Law of 10 August 1915 on commercial companies, as amended by the Laws of 10 August 2016 and 23 July 2016 (SARL-S); Law of 18 May 2026 on deferred payment of SARL capital (Bill No. 8669), applicable from 2 June 2026; Guichet.lu, 'Simplified limited liability company (SARL-S)'; Law of 19 December 2002 on the RCS and annual accounts; COM(2026) 321, Articles 3, 8(2), 42(2), 58, 59, 62, 64 and 105.
Cross-border cap tables, open ownership and employee options
A cap table that grows. An S.à r.l. is capped at 100 shareholders and every transfer to a newcomer needs approval by 75% of the capital, or 50% if the articles lower it. That gives a 26% holder a veto on new co-owners. Growing start-ups therefore often move to an SA, with EUR 30,000 of capital and a board. EU Inc shares would be freely transferable unless the articles restrict them, with a digital register and online transfers signed with a qualified electronic signature. For a company that expects angels from several states and later secondary sales, that is a cleaner path than S.à r.l. to SA.
The SARL-S without its limits. The SARL-S suits a solo founder with little capital, but it excludes corporate shareholders and allows one per person. A founder who already owns a SARL-S, or who wants a personal holding as shareholder, must use an S.à r.l. EU Inc would accept individuals and companies as founders, need no notary with the templates and have no minimum capital. The Council text says capital may be zero.
One language for investors. Template articles would be in an official language of the registration state, in Luxembourg French, German or Luxembourgish, and in a language customary in business, with both versions equally valid. Investors from elsewhere would recognise the same document in every Member State.
Employee options. Luxembourg has no dedicated tax regime for start-up stock options yet. Bill 8782, filed on 1 July 2026 and not yet adopted, would tax employees of young innovative companies only at sale, on a quarter of the normal rate. Until then employee equity is generally taxed under the rules for employment income, and only some profit-sharing bonuses are partly exempt. The EU-ESO would be a warrant for board members and employees holding up to 25%, with a waiting period of at least 24 months and no transfer, taxed only when the shares are sold, on the gain over the acquisition price. The text sets timing and base, not the rate. The Council limited it to companies with fewer than 750 employees and up to EUR 150 million turnover and kept national anti-abuse and exit tax rules. Most Member States reportedly opposed harmonisation here, so expect further change.
Three founders in Luxembourg own an S.à r.l. equally. In 2027 they take EUR 400,000 from nine angels in Belgium, France and Germany. Every transfer to a new investor needs approval by 75% of the capital, so each founder can block. They lower the threshold to 50% in the articles by notarial deed, record the transfers by private deed and update the RCS and the beneficial owner register within one month. With 12 shareholders they are far from the cap of 100, but a later employee pool and a Series A push them towards an SA. If EU Inc applies by then, converting the S.à r.l. to EU Inc becomes an alternative to the SA route.
Law and practice: Law of 10 August 1915: S.à r.l. shareholder cap and approval of transfers to non-shareholders; SA minimum capital of EUR 30,000; COM(2026) 321, Articles 3(c), 7(4) and (5), 55, 58, 59, 62, 78 and 79; Council mandate, Articles 62 and 79. See S.à r.l., SARL-S and SA compared.
Available now, the holding rules and managers anywhere
It exists, and it is faster than it was. Since 2 June 2026 an S.à r.l. can be incorporated before its bank account is open, with the EUR 12,000 paid within twelve months. That removed the main delay in Luxembourg formation. With complete documents, the notary can sign within one to two weeks. The business permit for a trading company follows within a few weeks of a complete file, and nothing in the EU Inc proposal changes that national rule as far as we can see.
Banks, notaries and the courts know it. Luxembourg banks onboard S.à r.l. companies every day, and still take two to eight weeks. A SARL-S already meets more caution from banks and large clients. A brand new EU form will have no track record at all in its first years. Luxembourg company law has a century of practice behind it; EU Inc would rely on national courts applying a new EU text.
Holdings. The S.à r.l. is the usual SOPARFI. Dividends and gains from shareholdings of at least 10%, or with an acquisition cost of EUR 1.2 million for dividends and EUR 6 million for gains, held for twelve months, are exempt. An EU Inc registered in Luxembourg should in principle be taxed the same way, but the proposal says nothing about tax residence, and treaty partners and banks will need time to treat it like an S.à r.l. Keep holdings in the national form.
Managers anywhere. An S.à r.l. manager can be an individual or a company, resident anywhere. EU Inc would require natural persons and at least one manager living in the EU. For tax residence and bank acceptance, Luxembourg companies are better managed in Luxembourg anyway; see foreign directors of a Luxembourg company.
Employee participation stays. A Luxembourg employer with 15 employees must hold staff delegation elections. From 50 workers it runs a whistleblowing channel, and from 150 the delegation co-decides on monitoring and internal rules. Board seats for employees apply only to an SA with 1,000 employees. Under the Commission text, an EU Inc registered in Luxembourg follows these same rules. Parliament's draft would apply the strictest regime of the states where employees work. Waiting for EU Inc saves nothing here.
Law and practice: Law of 2 September 2011 on the right of establishment; Income Tax Law (LIR), Articles 166 (participation exemption) and 174 (rates); Labour Code, Articles L.411-1 et seq. (staff delegation from 15 employees) and its rules on employee seats on SA boards; COM(2026) 321, Articles 12 and 42(2). Staff delegation: Guichet.lu, 'Establishment of the staff delegation'. Rates: PwC Worldwide Tax Summaries, Luxembourg.
Four founders, four answers
A Luxembourg resident IT consultant starts in January 2027 with EUR 3,000 of savings and no partners. A SARL-S with EUR 1,000 of capital, model articles and a business permit fits. Profit is taxed exactly as in an S.à r.l. Answer: SARL-S now. If she later takes a partner company or needs bank credit, she converts to an S.à r.l. by notarial deed and raises capital to EUR 12,000.
A French SAS and a Luxembourg engineer set up a joint venture in December 2026. The SARL-S is excluded because a company is a shareholder. They form an S.à r.l. with EUR 12,000 subscribed, the cash paid within twelve months under the articles. EU Inc would accept the French company as founder with zero capital, but not before 2028. Answer: S.à r.l. now.
A Luxembourg software S.à r.l. reaches 18 employees in 2027 and holds staff delegation elections, as it would as an EU Inc. It plans an option pool and has investors in four Member States. An EU-ESO, taxed at sale, would suit its team better than options taxed as wage. Answer: stay an S.à r.l., keep the articles simple, and reconsider EU Inc once it applies and the company has two approved accounts.
Two siblings hold a EUR 2 million portfolio of shareholdings through a new Luxembourg company. A SARL-S cannot hold investments as its purpose. The S.à r.l. qualifies as a SOPARFI with the participation exemption and pays the minimum net wealth tax. Answer: S.à r.l.; EU Inc adds nothing for a holding.
Law and practice: Law of 10 August 1915 (SARL-S: individual shareholders, one per person, conversion when capital exceeds EUR 12,000); Law of 18 May 2026 (deferred payment); Net Wealth Tax Law, Section 8 (minimum net wealth tax); COM(2026) 321, Article 21(4) and (6).
Choose the Luxembourg form that converts cleanly
If the business needs a company before 2028, form it in Luxembourg law now. Our note on forming now and converting later covers the conversion path in detail.
- Prefer the S.à r.l. if growth is likely. It accepts companies as owners, converts to an SA or, later, to EU Inc. The deferred capital rule removes most of the cash argument for the SARL-S.
- Use the SARL-S for a genuine solo start. Individuals only, a trading activity and little capital. Plan the switch to an S.à r.l. before the first investor.
- Keep the articles close to a template. Exotic class rights may not map onto EU templates, and the Council text denies the fast track to non-standard articles.
- File accounts on time. Conversion needs two years or two approved accounts. Late filing in Luxembourg also risks fines and administrative dissolution; see annual accounts in Luxembourg.
- Put one manager in Luxembourg. Good for tax residence and banks today, and it satisfies the EU residence rule of EU Inc.
- Do not promise an EU-ESO. Design today's employee plan so that it can be replaced, not so that it depends on a text still in negotiation.
Law and practice: Law of 10 August 1915 (conversions); COM(2026) 321, Articles 16, 21 and 42(2); Council mandate, Article 16(1a).
EU Inc, S.à r.l. or SARL-S? Check your situation
Answer nine questions. The checker applies the SARL-S eligibility rules, then weighs what EU Inc would add once it applies, on the texts as of November 2026. It is an orientation, not advice on your file.
EU Inc, S.à r.l. or SARL-S?
Nine short questions. You get the Luxembourg form that fits today, a score for how much a later switch to EU Inc could add, and the points that decide it.
EU Inc is a proposal; Parliament has not voted.
EUR 12,000, cash within 12 months.
Individuals only, one per person.
23.87% in Luxembourg City in 2026, any form.
EU Inc vs Luxembourg S.à r.l. and SARL-S: frequent questions
Can I form an EU Inc in Luxembourg now?
No. EU Inc is a proposed EU regulation, COM(2026) 321. The Council agreed its negotiating mandate on 23 October 2026; the European Parliament has not voted. The rules would apply 12 months after entry into force under the Commission text, or 21 months under the Council mandate.
Is EU Inc a better SARL-S?
In some ways it would be. Like the SARL-S it needs no notary when the EU templates are used and has no real minimum capital. Unlike the SARL-S, the text allows companies as founders and sets no one-per-person rule. But it requires at least one manager living in the EU and does not exist yet.
Would an EU Inc in Luxembourg pay less tax than an S.à r.l.?
On the current texts, no. The proposal does not harmonise corporate tax. An EU Inc registered in Luxembourg should expect the same corporate income tax, municipal business tax and net wealth tax as an S.à r.l.: 23.87% combined in Luxembourg City in 2026.
Do I still have to pay EUR 12,000 to form an S.à r.l.?
The EUR 12,000 must be subscribed at incorporation. For companies formed since 2 June 2026, the articles can allow the cash up to that minimum to be paid within twelve months. Share premium, capital above EUR 12,000 and contributions in kind are paid at once.
Would an EU Inc need a Luxembourg business permit?
Nothing in the proposal removes national rules on access to an activity. On our reading, an EU Inc trading in Luxembourg would need a business permit just like an S.à r.l. or SARL-S, with a qualified manager and a fixed establishment.
Can an S.à r.l. convert into an EU Inc later?
The Commission text allows a domestic conversion once the company has been registered for two years or has two approved annual accounts. An S.à r.l. formed in late 2026 would qualify in late 2028, around the earliest date EU Inc could apply.