GDPR, Data Residency, and Digital Sovereignty: Why EU Startups Need an EU Proxy

The Shift Toward Digital Sovereignty

Over the last 5 or 10 years there's been a shift in the tech world (especially here in Europe) where the question of infrastructure ownership and data protection finally became important and couldn't be ignored any longer.

We've all been happily using Google products (email, cloud, calendar, SSO), or one of the many AWS cloud services like EC2 instances, RDS databases, S3 buckets (buckets which probably host half the world's static assets) to build our businesses, companies, and startups in Europe. But while doing so we offloaded our infrastructure to other states (mostly US) and in the process lost a lot of our tech freedom and sovereignty. Even more so as the major LLM providers are currently all US-owned (OpenAI, Anthropic), with the notable exception of Mistral AI and other open source LLMs. The upcoming EU AI Act is also trying to mitigate this urgent issue.

Now the point of this blog post isn't to dwell on how or why this happened or even to get too political, but suffice it to say that in this day and age, the technological, governmental, and business sector in the EU has finally woken up to the merits of owning and controlling critical hardware and software components that are needed for a functioning business as we know it today.

The Changing Legal Landscape

The legal landscape also changed a lot in the last 10 years:

• The US CLOUD Act (2018) - If an EU company is using a US-owned cloud provider (AWS, Google Cloud, Azure, Digital Ocean, etc.), their data is subject to US jurisdiction, even if it's hosted in Germany or France. So the location doesn't matter anymore (data residency), it depends on who owns the infrastructure. Also, you might have seen the advertisements from AWS or Google about their so-called "EU sovereign solutions," it's just marketing fluff.
• The Schrems II Ruling (2020) - Schrems invalidated the EU-US Privacy Shield and placed strict obligations when it comes to sharing data between the EU and the US, which makes life difficult for businesses when it comes to EU data leaving its domain.
• The EU AI Act (2024) - Introduced the concept of "Technical Sovereignty," probably to not make the same mistake as they did with US hypervisors (AWS, Google Cloud, Azure, etc.).

Before it used to be important that a US company had data residency in Europe, but now that's mostly a thing of the past, because the US CLOUD Act invalidated it and gave power to the US government to have access to anything that's being operated on US cloud providers no matter where their infrastructure or servers are located. It's probably worth mentioning that this is in direct conflict with GDPR and its Article 48.

Where Does Proxy Infrastructure Fit In?

Now where does this all fit with proxy infrastructure?

Let's say you're a Health, Fintech, or B2B startup, Government and you need a proxy that will comply with GDPR rules, what are your choices? Predominantly you could have used one of the US services, but even though they use end-to-end encryption they still have access to your metadata like: status codes, byte counts, user info like payment details, source IPs, etc. (If you're looking for how to set up a static IP proxy for your stack, check out our docs.)

And another thing, in extreme instances they can deny you service. Your account can be canceled at any time for whatever reason, which would cause a pretty big disruption to your day-to-day business since proxies are an infrastructure component that needs to run 24/7.

Why an EU-Based Proxy Matters

With an EU-based proxy you get:

• Your payload is protected: It stays entirely within EU borders.
• Your metadata is sovereign: It is not subject to US corporate jurisdiction.
• Your account is secure: No one will cancel it because of political reasons.
• Your paperwork disappears: You don't need SCCs or TIAs for the proxy layer, because the data never leaves the EU legal zone.

The compliance laws between the US (or any other foreign country like China) and the EU are constantly evolving, which means that businesses need to constantly review and adapt to new compliance laws.

Why I Built OutboundGateway

Existing solutions like QuotaGuard or Fixie solve the static IP problem, but they're US-based and don't take European sovereignty seriously. That's the gap I wanted to fill, a proxy service built from the ground up for EU businesses that takes GDPR, data residency, and digital sovereignty as first-class requirements, not afterthoughts.

OutboundGateway gives you dedicated static IPs hosted entirely on EU infrastructure. No US corporate jurisdiction, no SCCs needed, no risk of account cancellation for political reasons. Your traffic stays in the EU, your metadata stays sovereign, and your compliance paperwork stays simple.

Built with ❤️ for EU businesses who care about privacy and sovereignty.

Tom