Choosing the right legal entity affects taxes, liability, fundraising ability, and governance. The main options for EU startups: (1) S.r.l. (Italy) / GmbH (Germany) / SAS (France) — limited liability, flexible, VC-compatible, (2) S.p.A. — public company structure (rarely needed early), (3) Startup Innovativa (Italy) — special status with tax benefits.
In Italy, "Startup Innovativa" status gives tax breaks for investors (30% tax credit), simplified incorporation, and flexible equity plans. Register within 5 years of founding.
Key Takeaways
- S.r.l. / GmbH / SAS are the standard VC-compatible EU entities.
- Startup Innovativa (Italy) = 30% investor tax credit + other benefits.
- Delaware C-Corp if targeting US investors.
- Consult a startup lawyer — entity choice has long-term consequences.