Company Formation Germany

Introduction

If you are a foreign investor and wish to consider company formation in Germany, you have a broad spectrum of options. You could take a cautious view and start with a one-person sales office based within a serviced office (we can help you with this). If it doesn’t work out, you can easily withdraw without having invested very much capital. Or you could have the courage of your convictions, and open company in Germany in a manner that makes clear you really mean business. Our Germany company formation service makes it easy for you to establish whatever kind of company you want, from a sole trader through to a partnership or corporation.

What are the main types of company formation in Germany?

There are four main forms of company formation in Germany, as follows:

	limited liability corporation (GmbH)
	stock corporation (AG)
	partnerships
	sole proprietor

What are the main features of a GmbH company?

	the minimum share capital for a GmbH is €25,000
	it is the most common form of business enterprise
	simple structure designed for private companies only
	the minimum number of shareholders is one

What are the main features of an AG company?

	the minimum share capital for an AG is €50,000
	the standard corporate form for major public companies
	the minimum number of shareholders is one
	subject to heavy regulation as a listed company

What are the main features of a partnership?

	available either as a general (oHG) or limited (KG) partnership
	foreign investors tend to prefer limited-liability KG partnerships
	minimum of two partners, one of which can be a GmbH company
	widely used in for small and family-owned businesses

What are the main features of a sole proprietor company?

	the simplest and least-regulated form of business entity
	registration required in commercial register and local trade office
	sole trader has unlimited liability for all liabilities and debts
	profits are subject to German income tax at individual rates

If I have a company in another country, can I set up a branch in Germany?

You certainly can, and it’s a popular move for foreign companies that aren’t quite certain about their long-term commitment. All you need to do if you want to establish a branch office is to register with the commercial register and the local trade office. Bear in mind however – the parent company retains full responsibility for the branch on all legal and tax matters. Look at our tax planning section to see how our panel of tax specialists can help you navigate your way through Germany’s complex fiscal laws.

German Company Incorporation

How easy is it to recruit staff?

Germany is famed for the excellence of its technical training and apprenticeships are the norm in most industrial sectors. There is no shortage of qualified staff in most areas, particularly in the east of the country and in the Ruhr where unemployment is high. Most companies advertise jobs at the local government-run employment exchange but for specialist staff and senior management, you would be better advised to use an executive search agency. Please contact us for information about our recruitment service.

What is the regulatory environment like?

Businesses are heavily regulated, this is particularly true in the case of listed AG companies but all companies, large and small, have to comply with detailed requirements laid out by the authorities. Government bodies oversee the activities of financial institutions such as banks and insurance offices, while most other industries are grouped around associations that regulate what their members can and cannot do. This is territory where it makes sense to tread carefully before you consider company formation in Germany– contact us to see how our local advisers can help.

Does Germany company formation offer financial incentives – and what about the banking facilities?

The federal government offers a wide range of incentive programmes, including loans and grants, depending on the nature of the company and its intended location. Some areas offer capital investment grants of up to 50% to SMEs. It is also worth noting that local government incentives may be offered in the form of beneficial tax rates but these are not generally available in the major cities. Germany has world-class international banking facilities and the first step to company formation in Germany should be to open a local bank account – we can arrange this for you.

How can I get more information?

Please contact us and we will be pleased to discuss the issues of Germany company formation in greater detail.