German Company Formation

What are the main types of German company formation?

There are four main forms of German Company Registration, 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 German company registration
• 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 but are keen to set up a business in Germany. 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.

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, if you are considering German company registration.

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 German company formation – contact us to see how our local advisers can help with your company incorporation Germany project.

Does German company registration 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 setting up a business in Germany should be to open a local bank account – we can arrange this for you.

How can I get more information on Company Incorporation Germany?

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

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