This is the one decision on a multilingual site that is expensive to reverse, which is why it deserves the afternoon it takes rather than being made by whoever configures the CMS. Three options: a subdirectory per locale on one domain, a subdomain per locale, or a separate country domain each. They differ in how authority accumulates, how much infrastructure you run and how convincingly local the site looks.
Subdirectories: the default, and why
One domain, one set of accumulated authority, one deploy, one analytics property, and the locale visible in the URL to a human. Everything you do for the site as a whole helps every locale. For a company selling the same thing in several languages, this is almost always the right answer, and it is what most of the sites you would cite as good examples use.
Subdomains: separate when you did not want separate
Each subdomain is treated as its own site to a degree that varies and that you do not control. You get separation you rarely need, plus more DNS, more certificates and more places for a deploy to go stale. The usual reason sites end up here is that the platform made it easy, not that the structure was chosen.
Country domains: real separation, real cost
A domain per market is the strongest local signal and the largest overhead: registrations to keep, certificates, separate authority to build from zero in each market, and a migration if you ever consolidate. It suits businesses with genuinely separate operations, legal entities or catalogues per country, and nobody else.
Why it is hard to change later
Changing structure is a full migration: every URL moves, every redirect has to be right, and the tags are rebuilt. Sites lose rankings in migrations even when they are done properly. So make the choice before the first locale ships, write the URL pattern down, and apply it without exceptions.
Migrating from one to another, if you must
A site that started on subdomains and wants subdirectories moves every URL. The order that works: build the new structure in full, with the hreflang sets generated from the record so every version names its new address; map every old URL to its new one, one to one, never to a home page; switch with permanent redirects; regenerate the sitemaps; and watch the coverage reports per locale for a quarter, because the locales recover at different speeds. The map on this site sizes the tag rebuild from the page and locale counts, which is the number that says how long the migration's tag work takes. Most sites that do this well lose visibility for weeks and recover; the ones that map the old URLs to home pages lose it for months.
Questions people ask about subdomain vs subfolder
Does a subdirectory rank as well as a country domain?
In most cases better, because the whole domain's authority carries into every locale rather than starting again per market.
Can we use subdomains for some locales and subdirectories for others?
You can and it will haunt you. One pattern, applied everywhere, is worth more than any per-locale optimisation.
What about a URL parameter for the language?
Avoid it. Parameters are easy to build and hard for crawlers and humans to treat as distinct pages, and the tags become fragile.