Registration of a company in Germany

Germany is recognized as one of the leading European countries in the field of industry and foreign trade. If you own a company in Germany, you will have a great chance to easily and quickly expand your business contacts in Europe. The most demanded in Germany are the service sector, IT and healthcare. Creating a business in this country is simplified due to the absence of bureaucratic barriers.

Most German products are associated with modern technology. This is also one of the reasons why Germany is chosen as a business location. In addition, if you have a business in Germany, you can get a residence permit and a visa, as well as German citizenship a little later. This kind of privilege will extend to your family.

In Germany, persons who are not residents of Germany or the EU can establish the following types of companies:

• Limited Liability Company - GmbH
• Simplified LLC - mini-GmbH, UG
• Joint Stock Company - AG

Registration of GmbH (Gesellschaft mit beschrankter Haftung)

One of the most popular organizational and legal forms is a limited liability company – GmbH.

GmbH structure:

- At least 1 director. Individual. There is no residency requirement. (We advise you to put a German resident in charge of the company. This will make it easier to open a bank account)

- At least 1 shareholder. An individual (may be a director of a company). There is no residency requirement.

- Minimum authorized capital - 25000 Euro. Upon registration, the authorized capital must be deposited into the company's bank account in the amount of at least 50%. The second half is paid by the beginning of the active activity of the company or during the first year of the company.

- GmbH must have a registered legal address with a telephone number at the place of registration.

- The name of the company must be unique and approved by the Chamber of Commerce and Industry, the abbreviation "GmbH" is required.

UG registration (mini-GmbH) (Unternehmergesellschaft haftungsbeschränkt)

An alternative to a GmbH with a share capital of 25,000 Euros, which is required to be paid upon company registration, is the UG form of ownership, upon registration of which it is enough to pay a share capital of 1 Euro.

A feature of this form is that the authorized capital is accumulated gradually, by annual transfer of 30% of the company's profit to the authorized fund. When the amount of authorized capital reaches 25000 Euros, it is necessary to transform UG into a GmbH.

Of the shortcomings of this legal form, it should be noted that it is difficult to open accounts for UG in German banks. A possible option is to open accounts in foreign banks.

AG (Aktiengesellschaft)

A joint-stock company has in its structure a general meeting of shareholders, a management board, and a supervisory board. This form is suitable for large businesses.

AG structure:

- At least 1 shareholder. Individual or legal entity. The liability of members is limited to their contribution to the capital. There is no residency requirement.

- At least 1 member of the board and additionally at least 3 members of the supervisory board. There is no residency requirement for the chairman of the board.

- Minimum authorized capital - 50000 Euro. A quarter of it must be paid at the time of registration.

- AG must have a registered legal address with a telephone number at the place of registration.

- The name of the company must be unique and approved by the Chamber of Commerce and Industry, the abbreviation "AG" is required.

§21 AufenthG provides an opportunity to obtain a residence permit for entrepreneurs whose business is of economic interest to Germany. To apply for a residence permit, a business plan and other documents are provided.

In accordance with the law, all legal entities in Germany are required to publish annual financial statements and balance sheets annually.

Reporting includes:

• Balance sheet
• Income Statement
• Statement of changes in equity
• Cash flow statement
• Management report
• Notes

Annual tax returns for corporate, industrial tax, value added tax, companies submit to the tax office until May 31 of the year following the reporting year.

Firms served by tax agents have the opportunity to submit reports until December 31 of the year following the reporting year.

Since 2013, all reporting in Germany has been submitted electronically.

Corporate tax

German societies are taxed at a flat rate of 15%, plus a solidarity surcharge (similar to personal income tax) of 5.5% of the tax amount.;

Trade tax

This is a kind of local tax. Local authorities can increase the base rate of the trade tax, as a result of which the rate of this tax ranges from 14 to 17.15% of the firm's profit, depending on the land and community. The minimum income subject to this tax is 60,000 euros;

VAT

The standard tax rate is 19%. For food, a reduced rate of 7% applies.

The legislation provides for certain conditions under which there is an exemption from paying this tax. For example, export transactions, including the provision of services for export, the sale or lease of real estate and land, the provision of loans, medical activities, including in the field of alternative medicine, veterinary medicine.

Income tax for corporations

The tax rate varies from 15% to 30% (plus solidarity tax). In the case of application of the Double Taxation Agreement, the taxpayer has the right to demand a refund of the tax paid in an amount exceeding the tax rate actually payable.

Tax on capital gains

This type of tax is levied on interest on deposits, income from securities, as well as on dividends received by participants in companies with authorized capital in the distribution of profits.

This tax rate is 26.375% (subject to a 5.5% solidarity surcharge).

When starting a business in Germany, investors are advised to take into account the total costs required to open a company. The minimum share capital of a company in the form of UG (mini-GmbH) is 1 euro and is one of the simplest and least expensive legal forms. But the owners will need to transfer 30% of their profits annually to replenish the authorized capital until it reaches 25,000 euros. A Limited Liability Company (GmbH) is established with a minimum share capital of 25,000 euros (usually 50% - 12,500 euros is paid up front). A joint-stock company (AG) is established with 50,000 euros, a ¼ part must be paid upon registration of the company.

Note that the director of the company may not be a resident of Germany, but we advise you to put a resident - a citizen of Germany - at the head of the company. This will make it easier to open a bank account, conclude office lease agreements and conduct business with counterparties.

For individuals:

In the event that the founder of the company personally comes to Germany to register the company, he is required to:

• Passport;
• Availability of the amount of 25.000.00/12.500.00 EUR to deposit the authorized capital into the company's bank account.

In the event that the founder of the company will not be personally present during the registration of the company, the following documents are required from him:

• Copy of passport with residence permit;
• A power of attorney addressed to one of our employees with instructions to register a company. The power of attorney is required in original and with apostille/legalization.

The personal presence of the director at the notary when registering a company in Germany is mandatory.

For legal entities:

The required package of documents for legal entities may vary depending on the jurisdiction of the parent company. The main documents for legal entities of various jurisdictions are:

• A set of constituent documents;
• Extract from the register;
• Information about the ultimate beneficiary

All documents must be prepared and submitted under an apostille, with a creation date no older than three months at the time of their use in Germany.

Translations and/or additional documents are available at the request of the German Commercial Register.

A legal entity can be established in Germany in about 1-2 weeks after submitting documents to the registration authority, if the founders follow all the requirements and prepare their documents accordingly.

Having proper legal assistance during the incorporation phase can be helpful for entrepreneurs to ensure that each document complies with German law requirements. Our consultants specializing in company registration will inform you about all the nuances and details that arise during the registration. In addition, we can also assist business owners in applying for additional special permits and licenses to register a business and obtain a residence permit for them and their families.

Requirements for registering a company may vary depending on its activities, region registration and other factors.

The process of registering a company in Germany is full of nuances. Opening a company for a non-resident on your own can turn out to be a failure. You will spend a lot of time and effort, and not get the desired result. We advise you not to take risks and immediately turn to professionals.

One of them is our company. The head office of our company is located in Berlin. Since 1992, we have been leading specialists in the field of company registration in Germany and we can quickly and professionally resolve any issue.

Call the phone +852 3702 7632 or write a message to WhatsApp +4917660018815