A VSOP or ESOP costs roughly €3,000-5,000 in legal fees to set up: no notary, no capital increase, just contractual drafting. An EIP is more involved: setup fees start from €7,500 for below 15 participants, €15,000 for 15-64 participants, and €20,000 for more than 64 participants. The EIP cost is real, but so are the tax savings, which can amount to roughly 30% more net proceeds compared to a fully wage-taxed VSOP payout.
Before committing to an equity program, most founders ask the same question: what does this actually cost? Legal drafting, notarial fees: the numbers vary significantly by instrument, and most English-language resources give vague ranges or skip the EIP entirely. This post gives you the real setup figures by instrument and by stage, so you can make the comparison properly.
For a full breakdown of what each instrument is and how they differ, see VSOP vs ESOP vs EIP: which model for a German GmbH.
What does a VSOP cost to set up?
A VSOP is a purely contractual arrangement. The company creates a legal obligation to pay employees on a defined trigger event; no shares are issued, no notary is required, and there is no impact on the Gesellschafterliste. That simplicity is reflected in the cost.
Legal setup. A standard VSOP template package from a German legal firm runs roughly €3,000-5,000 (excl. VAT) for a basic first program covering the grant agreement, participation terms, and plan rules.
Notary. Not required.
Total setup cost (typical early-stage program): ~€3,000-5,000 in legal fees. Fast, low overhead, and reusable across subsequent grant rounds without repeating the full legal setup.
What does an ESOP cost to set up?
The setup cost profile for an ESOP is similar to a VSOP at the contractual layer: the option agreement itself is a contract, does not require a notary, and does not appear on the cap table until exercise (and in practice, German ESOPs are commonly cash-settled at exit, so exercise into real shares often does not happen).
Legal setup. Similar to a VSOP: roughly €3,000-5,000 for template-based drafting of the option agreement and plan rules.
Tax ruling (Anrufungsauskunft). For an ESOP, some companies obtain a tax office confirmation of the valuation basis to reduce uncertainty around the wage-tax treatment of the option grant. The ruling itself is issued by the tax office free of charge; professional fees for preparing and filing the application vary by plan complexity and provider.
Notary. Not required for the option agreement itself. If options are exercised into real GmbH shares, notarization is required at that point under §15 GmbHG.
Total setup cost (typical early-stage program): ~€3,000-5,000 for legal drafting, plus professional fees for the tax ruling if obtained. The ESOP and VSOP cost profiles at setup are close to identical.
What does an EIP cost to set up?
An EIP issues real shares to employees, typically into a pooled legal entity. That real-share structure is what enables §19a deferral, and it is also what drives a more substantial setup cost compared to VSOP or ESOP.
GAIA's EIP pricing is structured in three tiers based on participant count, each with a one-time setup fee.
EIP design choice: KG-Modell vs Genussrechte
Before pricing, the first structural decision is which design model to use. Participants are either pooled in a KG (limited partnership), the KG-Modell, or given profit participation rights (Genussrechte/PPR). The two models differ in launch timeline and ongoing treatment: the KG-Modell can launch in 4-6 weeks; the Genussrechte model requires a mandatory tax ruling that takes a minimum of 6 months before any participants can be granted. For a full comparison of the structures, see VSOP vs ESOP vs EIP: which model for a German GmbH.
Starter: below 15 participants
- Setup fee: from €7,500
The Starter tier covers early-stage companies implementing their first EIP. Setup includes the legal structure, participant agreements, and cap table integration.
Grow: 15 to 64 participants
- Setup fee: from €15,000
The Grow tier fits companies scaling their team and equity program, including where an existing VSOP pool is being carried forward alongside the new EIP.
Scale: more than 64 participants
- Setup fee: from €20,000
The Scale tier covers growth-stage and later-stage companies with large participant pools, including complex VSOP transitions.
On timing: The later the EIP is implemented, the more participants need to be transitioned from legacy VSOP programs and the more complex (and costly) the process. Implementing early, ideally before a large VSOP pool has accumulated, keeps the setup within the Starter or Grow tier and reduces transition work.
How do setup costs compare?
| VSOP | ESOP | EIP Starter (<15) | EIP Grow (15-64) | EIP Scale (>64) | |
|---|---|---|---|---|---|
| Setup cost | ~€3,000-5,000 | ~€3,000-5,000 | from €7,500 | from €15,000 | from €20,000 |
| Notary required | No | No (unless shares issued) | Yes | Yes | Yes |
| Launch timeline | 1-2 weeks | 1-2 weeks + optional ruling | 4-6 weeks (KG) / 6+ months (Genussrechte) | 4-12 weeks (KG) / 6+ months (Genussrechte) | 6-12 weeks (KG) / 6+ months (Genussrechte) |
| Tax efficiency | Low | Low | High (§19a) | High (§19a) | High (§19a) |
The setup cost differential between a VSOP and an EIP Starter program is roughly €2,500-4,500. Whether that cost is justified depends on the size of the equity pool and the expected exit value: the tax difference between wage income and capital-gains treatment on the appreciation can, across a meaningful grant, materially outweigh the setup cost many times over.
FAQ
Do I need a notary to set up a VSOP or ESOP?
No. Both a VSOP and an ESOP are contractual arrangements that do not involve the issuance of real GmbH shares. No notarial form is required for the documents themselves. If an ESOP is exercised into real GmbH shares at a later point, notarization is required at that stage under §15 GmbHG, but this is an event at exercise, not at setup.
Why does the Genussrechte EIP take longer to launch than the KG-Modell?
The Genussrechte model requires a mandatory tax ruling from the tax office before any participants can be granted. That ruling process takes a minimum of 6 months: the program cannot launch without it. The KG-Modell has no equivalent requirement and can be launched in 4-6 weeks. For most early-stage companies, this timeline difference makes the KG-Modell the more practical starting point.
Does implementing an EIP alongside a funding round reduce costs?
Yes, in one specific way: the notarial capital increase required for the KG-Modell EIP can sometimes be combined with the notarial work for a priced funding round, reducing the standalone notary cost. The setup fees above assume the EIP is implemented independently. If the timing aligns with a round close, the incremental notary cost may be lower and the overall setup fee could come in at the lower end of the range.
Are these costs the same if I already have employees on a VSOP?
No. Transitioning existing VSOP participants into an EIP adds legal complexity and can push the program into a higher tier. A company with 70 existing VSOP participants would fall into the Scale tier (from €20,000 setup) rather than Starter. The more participants to transition, and the longer the legacy VSOP program has been running, the more involved the process. This is another reason the timing principle applies: implementing an EIP early, before a large VSOP pool has accumulated, reduces transition cost and keeps the program in the Starter or Grow tier.