Germany
Company Formation
Germany is one of the largest and most advanced economies in the world, known for its innovation, engineering and manufacturing sectors.
As a member of the European Union, Germany provides access to the EU single market, making it a strategic location for businesses looking to operate in Europe.
Germany offers a highly skilled workforce, a stable political environment and a robust legal system, making it an attractive jurisdiction for multinational corporations, SMEs and start-ups alike. The country’s reputation for regulatory transparency and strong infrastructure make it an ideal destination for
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Why Germany
- Germany is a leading choice for company formation, offering a stable and transparent environment with seamless access to the European market, a favorable tax regime and a robust legal framework.
- With access to the EU single market, businesses benefit from the free movement of goods, services and capital.
- Germany’s holding company regime provides tax exemptions on dividends and capital gains from subsidiaries.
- Its legal system ensures strong regulatory compliance and investor protections.
- Germany also boasts a highly skilled workforce in technology, engineering and manufacturing, alongside world-class infrastructure in transportation, logistics and digital networks.
- Start-ups enjoy government grants and opportunities in one of Europe’s largest economies, making Germany a strategic choice for growth.
Key Contacts
Alexia Panzavecchia
Claire Marie Calleja Zammit
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Key Information Overview
 | Types of Companies | Private Limited Company (GmbH), Public Limited Company (AG), Branch |
 | Minimum Share Capital | GmbH: €25,000, AG: €50,000 |
 | Registered Office | Must have a registered office in Germany |
 | Shareholders & Directors | At least 1 shareholder, 1 director |
 | Bank Account | Must open a German bank account and deposit share capital |
 | Tax Regime | 15% corporate tax, 5.5% solidarity surcharge, local trade tax (varies) |
 | Time to Complete Incorporation | 2-4 weeks |
 | Annual Maintenance Costs | Varies by company size, includes registration, compliance and accounting fees |
 | Audit Requirements | Mandatory for larger companies |
 | Market Access | Access to EU market, strong economy |
 | Key Benefits | Highly skilled workforce, stable economy, strong legal system |
 | Legal Framework | Based on civil law |
 | Physical Presence Requirements | Registered office is required |
 | Corporate Governance Requirements | At least 1 director and 1 shareholder; annual board meetings required |
 | Language Requirements | German, though English may be used for some documents |
 | Tax Residency Rules | Managed and controlled from Germany |
 | Required Documents | Memorandum & Articles of Association, ID proof, registered office address |
 | Compliance & Reporting | Annual returns, audited financial statements, VAT filings |
 | Employee and Payroll Requirements | Must comply with German employment laws, including social security contributions |
Types of Companies
Germany offers several corporate structures, catering to a wide variety of business needs, from start-ups to large multinational corporations.
01
Gesellschaft mit beschränkter Haftung (GmbH) – Private Limited Company
- The most common type of company in Germany, suitable for small and medium-sized businesses. Provides limited liability to shareholders.
- Minimum share capital requirement: €25,000.
02
Aktiengesellschaft (AG) – Public Limited Company
- Ideal for larger businesses looking to raise capital through public offerings or to be listed on stock exchanges.
- Minimum share capital requirement: €50,000.
03
Branch of a Foreign Company
Foreign companies can establish a branch in Germany, allowing them to operate as an extension of the parent company without forming a separate legal entity.
04
Sole Proprietorship (Einzelunternehmen)
Suitable for individuals conducting business independently, though this structure does not provide limited liability protection.
05
Special Purpose Vehicles (SPVs)
Germany’s robust legal system and favourable tax framework make it an ideal jurisdiction for Special Purpose Vehicles (SPVs), particularly in sectors like real estate, financial services and investment.
Holding Company
Germany’s holding company regime offers significant tax benefits, including exemptions on dividends and capital gains from qualifying subsidiaries, making it ideal for managing international investments.
Securitisation Vehicle
SPVs in Germany are often used for securitising assets, benefiting from the country’s strong financial infrastructure and compliance with EU regulations.
Real Estate Holding Company
SPVs are commonly used to hold and manage real estate assets in Germany, benefiting from the country’s transparent legal system and tax advantages.
Investment Fund
Germany is a key player in the European investment fund market, offering regulatory support and tax efficiency for the establishment of Alternative Investment Funds (AIFs) and other investment vehicles.
Start-Ups
Germany is one of Europe’s top destinations for start-ups, particularly in technology, fintech and green energy. The country’s strong economy, access to EU markets and supportive infrastructure make it an ideal location for entrepreneurs.
Tax Incentives:
- Corporate Tax Rate: Germany has a corporate tax rate of approximately 15%, with an effective rate of about 30% when local and municipal taxes are included.
- R&D Tax Incentives: Generous tax credits and deductions are available for start-ups involved in research and development activities.
Government Grants and Support:
- EXIST Start-Up Grants: The German government offers grants for innovative start-ups, particularly in the technology and research sectors.
- KfW Loans and Financing: KfW, Germany’s state-owned development bank, provides loans and funding to support start-ups and SMEs.
Business Support:
Incubators and Accelerators: Germany has a strong network of incubators and accelerators, particularly in Berlin, Munich and Frankfurt, offering funding, mentoring and office space for start-ups.
Access to Markets:
EU Membership: Germany’s position within the EU allows start-ups to easily access the single market, providing opportunities for expansion across Europe.
Innovation and Sustainability:
Tech and Green Innovation Hub: Germany is a leader in green technology and digital innovation, making it a prime location for start-ups focused on sustainability and tech.
A
Grade A: Highly Start-Up Friendly
Germany offers a robust start-up ecosystem with strong government support, access to EU markets and a skilled workforce. It is particularly attractive for start-ups in technology, sustainability and financial services.
Benefits
GERMANY OFFERS SIGNIFICANT ADVANTAGES, INCLUDING A STABLE LEGAL ENVIRONMENT, TAX BENEFITS AND ACCESS TO A LARGE, HIGHLY SKILLED WORKFORCE IN EUROPE.
Favourable Tax Regime
Germany’s corporate tax rate is competitive, particularly for holding companies, which benefit from tax exemptions on dividends and capital gains from qualifying subsidiaries.
Access to EU Markets
As a member of the EU, Germany offers access to the EU single market, allowing businesses to trade freely across Europe.
Highly Skilled Workforce
Germany has one of the most educated and skilled workforces in the world, particularly in sectors such as engineering, technology and manufacturing.
Strong Legal System
Germany’s legal system is known for its transparency, regulatory compliance and strong protections for businesses and investors.
World-Class Infrastructure
Germany has advanced infrastructure, including digital connectivity, transportation and logistics networks, making it an ideal base for international businesses.
Requirements
Incorporating a company in Germany involves fulfilling several legal and administrative obligations. Below are the key requirements for establishing a company.
01
Shareholders
A GmbH requires a minimum of one shareholder. Shareholders can be individuals or legal entities, with no restrictions on nationality or residency.
02
Directors
At least one director is required for a GmbH. Directors can be of any nationality, though there must be a local representative in Germany for tax purposes.
03
Company Secretary
There is no legal requirement for a company secretary in Germany, though some businesses may choose to appoint one for administrative purposes.
04
Registered Office
Every company must have a registered office in Germany, which will serve as the official address for legal and tax correspondence.
05
Minimum Share Capital
The minimum share capital for a GmbH is €25,000, while a Public Limited Company (AG) requires €50,000.
06
Bank Account
A corporate bank account must be opened in Germany, where the initial share capital will be deposited before incorporation.
Mergers & Acquisitions
TAILORED SUPPORT to fast-track your market entry
Our Mergers & Acquisitions services are designed to assist clients in acquiring existing companies with pre-established licenses, streamlining the process of entering or expanding in key markets. These services are particularly relevant for investors seeking to fast-track their market entry while ensuring efficient and compliant solutions.
Identifying Suitable Businesses
We help clients locate companies that meet their specific goals, focusing on entities with strong operational histories and the required licenses.
Legal and Regulatory Assistance
Our experts guide clients through the unique legal and compliance frameworks of each market, ensuring a smooth acquisition process with minimal risk.
Valuation & Due Diligence
We conduct in-depth assessments of the target company’s financial and operational status, providing transparency and confidence in the acquisition.
Post-Acquisition Support
For clients who decide to divest, we offer comprehensive services to facilitate the sale of the company and transfer of licenses.
Frequently Asked Questions
What is the corporate tax rate in Germany?
Germany’s corporate tax rate is approximately 30%, which includes both federal and municipal taxes.
Are there withholding taxes on dividends in Germany?
Yes, Germany imposes a 25% withholding tax on dividends, although this can be reduced through tax treaties or EU directives.
What legal structures are available in Germany?
Common legal structures include the Private Limited Company (Gesellschaft mit beschränkter Haftung, GmbH) and Public Limited Company (Aktiengesellschaft, AG).
Do German companies need to file audited financial statements?
Yes, larger companies are required to file audited financial statements, while smaller companies may be exempt but must still file annual reports.
What is the VAT rate in Germany?
The standard VAT rate is 19%, with a reduced rate of 7% applying to certain goods and services.
Does Germany have double taxation treaties?
Yes, Germany has an extensive network of over 100 double taxation treaties.
Are there any residency requirements for directors in Germany?
No, Germany does not require directors to be residents, though having local management is often beneficial for tax purposes.
What is the process for incorporating a company in Germany?
Incorporation involves registering with the Commercial Register, drafting the Articles of Association and depositing the minimum share capital.
Does Germany offer tax incentives for R&D?
Yes, Germany offers tax incentives for R&D activities through various programs that provide grants and tax credits.
How long does it take to incorporate a company in Germany?
Incorporation in Germany can take up to 4 to 6 weeks, depending on the complexity of the company structure.
Need assistance?
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