As a general rule, the registration of a business in Germany follows similar steps across all regions, although certain variations may occur. Therefore, when initiating the procedure of company formation in Germany, it is advisable to seek assistance from a professional team of specialists who can streamline the process of establishing a business in a new location.
In this regard, our company is prepared to assist foreign entrepreneurs with any matters involved in the steps of opening a company in Germany, regardless of the selected region. We provide legal representation during the company formation process and can also assist investors with post-incorporation matters such as audit, tax advice, tax compliance, and corporate administration. Our team is also well-equipped to help investors apply for and obtain work permits in Germany. Investors can request our accounting services, available to both individuals and companies looking to start business activities in this country. Currently, investors can contact our offices in Berlin, Munich, Frankfurt, and Hamburg.
Germany is one of the most attractive jurisdictions for doing business in Europe. It benefits from a stable economic climate and boasts one of the most developed financial systems in the world. It is renowned for its automotive, engineering, and pharmaceutical industries, and has recently become a significant hub for startup businesses in fields such as fintech and biotechnology.
Opening a company in Germany
The procedure of company formation in Germany consists of several steps, including:
- Drafting the articles of association;
- Completing the forms required by the company registration office;
- Filing specimen signatures, passport copies, and other relevant documents. It is important to note that most of the procedures regarding company formation in Germany must be concluded through a public notary registered in this country. Finding a registered office, opening a bank account, registering for taxation purposes, and hiring an accountant in Germany are also part of the company formation process.
The German company formation procedure is completed with the assistance of our team of consultants specializing in company registration in Germany.
What are the main types of companies in Germany? One way to start a business in Germany is by incorporating a Gesellschaft mit beschränkter Haftung (GmbH or limited liability company). A GmbH in Germany is formed by at least one shareholder with a minimum share capital of EUR 25,000, and the liability of the members is limited by their contribution to the capital. The management of the German company is established by the general meeting of the shareholders and one or more directors; at least one of the directors must be a resident in Germany.
A stock corporation in Germany (Aktiengesellschaft or AG) can be established by at least one shareholder who will provide a share capital of EUR 50,000. In a stock corporation, the liability of the members is also limited by their contribution to the company’s capital. The company’s management is established by the general meeting of the shareholders and a board of managers, which is set up as prescribed by the general meeting of the shareholders. Investors should be aware that the managers must be German residents and also shareholders of the entity.
One of the simplest ways to enter the German market is by registering a sole proprietorship, where the founder is fully liable for the company’s obligations. There is no requirement for a minimum share capital for this type of business, and the obligation to register at the Trade Register is mandatory only if the annual turnover exceeds EUR 50,000.
A general partnership in Germany can be set up by at least two members who associate in a business created for a specific purpose. Prior to entering a general partnership, the members must sign a partnership agreement that outlines the conditions under which the business will operate. There is no need to submit a minimum share capital, but the liability of the members for the entity’s debts is unlimited. Management decisions are taken by the members during partnership meetings.
A limited partnership in Germany is formed by at least one partner with full liability (general partner) and at least one partner with liability limited to their initial contribution to the entity (limited partner). Our team of specialists in company registration in Germany can further advise on the legal entities described above.
A statement of receipts/income and payments/expenses is all that is necessary to maintain simplified accounting for sole proprietorships and partnerships with annual revenue of less than EUR 500,000. Legal entities and sole proprietorships that generated at least EUR 500,000 in income the previous fiscal year are required to maintain records and submit annual financial reports. For this purpose, they can use an accountant in Germany.
Steps for company formation in Germany The main steps for opening a company in Germany are as follows:
- Choose the most suitable type of company for your business objectives;
- Choose a unique name for the company’s trading name – prepare at least 3 business names for your future company, out of which one will be your trading name;
- Open a corporate bank account for future transactions – the minimum share capital of a German GmbH or AG must be deposited here;
- Draft the articles of association and the public deed of incorporation;
- Sign the articles of association and the public deed of incorporation at a public notary in Germany;
- Fill out the necessary declaration forms;
- Register your company by submitting all the documents at the German Trade Register.
We are also at your service with other services, such as a virtual office in Germany.
Main Documents for Company Formation in Germany
To establish a legal entity in Germany, every company must register with the Commercial Register. This process requires the founders to submit an application that includes a comprehensive set of legal documents, detailing the future business and its activities. Below are the necessary documents and information needed for company formation in Germany:
- Articles of Association: The primary statutory documents of a local company, which must be notarized before registration.
- Specimen Signatures: These include the signatures of the managing board, company secretary, directors, and shareholders/founders.
- Declaration Forms: Specific forms, such as the Stampa Declaration Form and Lex Friedrich Declaration Form, along with information on the registered office of the company.
- Capital Information: Details about the company’s social capital and the main activities to be conducted by the new entity.
- Additional Documents: Other documents may be required depending on the type of business being registered.
Costs for Forming a Company in Germany
The primary costs associated with forming a company in Germany include:
- Registration Fee: The general registration fee is approximately 212 EUR, though it can vary depending on the region in Germany where the company is registered.
- Virtual Office Cost: Around 120 EUR per month, providing a registered office address necessary for establishing a German company.
- Minimum Share Capital: Certain types of companies, such as the GmbH, require a minimum share capital of about 17,660 EUR (20,000 CHF).
- Company Formation Fee: Approximately 2,500 EUR, which is a competitive offer from our company formation agents in Germany.
- Accounting Costs: Starting from 180 EUR per month, covering bookkeeping services and tax advice.
Additional Registration Procedures in Germany
The registration process can be completed either through local offices of German institutions or via express mail. If done through express mail, the procedure can be completed within 3 to 5 days. Once the registration certificate for the new German company is issued, the German Commercial Register publishes the articles of association, statutes, and names of all shareholders in the local Commercial Gazette. This announcement is included in the registration fee.
Not all companies incorporated in Germany need to register for tax purposes; this requirement depends on the company’s activities. However, companies required to register for tax must file an application with the Federal Tax Administration after incorporation. The same applies to VAT registration; the application must include the registration certificate issued by the Commercial Register of Germany and other relevant company documents.
Depending on the type of business an investor decides to establish, certain permits and licenses may be necessary to conduct activities in compliance with current legal specifications. Our team of specialists in company registration in Germany has extensive experience in registering various types of businesses and can provide expert advice and obtain the required documentation for any type of company.
If the newly registered German company employs staff, they must be registered for social security. The institution sends each employee an application for registration in the social insurance system, which includes retirement pension, disability insurance, occupational accident insurance, etc. Our local company formation agents offer consultancy in all these areas through our team of experienced and reliable lawyers.
