Germany Company Formation

Introduction to Registering a Company in Germany

Germany is a global powerhouse of technological advancement, responsible for 22% of Europe’s GDP, it has the largest economy in Europe with access to 454 million consumers. The country is the second largest exporter in the world making it a lucrative target for international investors. There are over 22,000 foreign companies operating in Germany, employing more than 2.1 million staff, generating trillions of Euro in turnover. In addition, the economy is very stable enabling it to house 37 of the world’s 500 largest listed companies. Our German company formation service makes it easy for you to establish whatever kind of German company you want, from a sole trader through to a partnership or corporation. Please contact us for further details of our German company incorporation services today.

What are the main German company types?

There are four main forms of German company incorporation, and they are as follows:

  • two types of limited liability companies; GmbH or UG (mini-Gmbh)
  • stock corporation (AG)
  • partnerships
  • sole proprietor (sole trader)

The main features of a Limited Liability GmbH/UG company

  • the minimum share capital for a GmbH is €25,000 (50% minimum to be paid up)
  • the minimum share capital for a UG is €1
  • these are the most common business entities in Germany
  • must have at least one shareholder

A benefit of incorporating a UG company is that when it gains 25,000 EUR it will automatically become an GmbH company at no additional cost. This is great for companies that don’t require a high start-up investment

The main features of an AG company

  • the minimum share capital is €50,000
  • this is the standard corporate form for major public companies
  • must have at least one shareholder
  • subject to heavy regulation as a listed company

The main features of a partnership

  • two partnership types; general oHG or limited KG partnership
  • must have two partners, one of which can be a GmbH company
  • comonly used for small and family-owned businesses
  • foreign investors tend to prefer limited-liability KG partnerships

The main features of a sole trader/proprietor

  • the most simple and least regulated business entity in Germany
  • has unlimited liability for all debts
  • profits are subject to individual income tax rates

Can I set up a branch of my company in Germany?

Yes, setting up a German branch to a parent company is popular for foreign investors, especially when they aren’t certain about long-term operations. It’s a relatively easy process to establish a German branch office, all you need to do is register with the local trade office and the commercial register. It is important to note that the parent company will retain full responsibility for the branch on all legal and tax matters. Germany’s fiscal laws are complex, please contact our team of German tax specialists to help find what you need to know.

How can I recruit staff in Germany?

Germany is home to excellent technical training institutions and apprenticeship programs are the key to success for most industrial sectors. There is a large pool of qualified individuals seeking employment in most areas of Germany, particularly are areas where unemployment is high such as the eastern side of the country and in the district of Ruhr. The local government-run employment exchange is a good place to advertise entry-level jobs but we advise you to use an executive search agency if you require specialist staff and senior management.

What are the regulatory environmental factors German companies face?

Foreign investors should be aware that local businesses are heavily regulated in Germany, especially when incorporating listed AG companies. All companies must comply with the detailed requirements laid out by the German authorities. Government bodies are responsible for overseeing the activities of financial institutions and insurance offices. The majority of other industries are assigned to varies associations who regulate what their members can and cannot do. Having knowledge of Germany’s regulatory system is essential to your business success. Please contact us to have a local adviser assigned to your case before you incorporate, we can then assist you with the company-specific registration process.

What are the financial incentives to doing business in Germany?

The federal government offers a wide range of incentive programs, including loans and grants, depending on the nature of the company and its location. Some regions in Germany offer capital investment grants of up to 50% to small and medium enterprises. There are also local government incentives that may be offered in the form of reduced tax rates but these are generally only available in small cities and rural areas.

How can I get a corporate bank account for my German business?

Germany has world-class international banking facilities and the first step in opening a German company should be to open a local bank account – we can arrange this for you.

How do I register a German company?

Through our office in Germany, we can register your company and assist you with adhering to the regulatory requirements. We would be pleased to assist you with your German company formation, registering for VAT, setting up a corporate bank account and to discuss the regulatory process in more detail. Please note: in most cases, foreign investors will need to visit Germany as part of the German incorporation process. Please contact our team to start a the process today.

Readymade German Company

In addition to German company formations, we also have a selection of Readymade German Companies available for immediate purchase. Please contact Euro Company Formations for a list of Readymade German Companies Today!

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