Company Registration in Germany

The largest economic powerhouse in the European Union is thought to be Germany. There have been significant changes on the German mainland as a result of government support and initiatives for Small and Medium Businesses (SMEs). SMEs are also referred to as “Mittlestands” in other contexts. The government provides these businesses with a variety of perks and incentives to ensure proper operation.

In Germany, the government is helpful and offers training for all enterprises to do all types of activities. SME’s are regarded as the foundation of the German economy. Entrepreneurs and investors can register a company in Germany because of the country’s business-friendly environment. One of the most reliable passports in the world is the German one. Investors should thus think about the German company registration process.

Benefits of Company Registration in Germany

• Transparency

When it comes to conducting business, Germany is among the most transparent nations in the world. The procedure for incorporating a business is rather simple for investors who choose to register a company in Germany. Also, the German government offers a lot of support to many businesses.

• Infrastructure

Germany offers top-notch infrastructure facilities. In Germany, there is a cutting-edge communications network. Moreover, Germany has high-speed infrastructure in the form of railroads and other types of infrastructure.

• Lower Corruptness

One of the nations with the least corruption in the world is Germany. Germany is among the twenty least corrupt countries in the world, according to the Transparency Index of 2018.

• Overseas investment is not subject to exchange controls

For international investment opportunities, there are no exchange controls of any kind. As a result, international businesses and organisations are permitted to invest in Germany.

Types of Business Structures for Company Registration in Germany

It is essential to take into account the sort of business structure that will be used for company registration when forming a corporation in Germany. The following are the types of business structures existing in Germany:

Limited Liability Company (GmbH)

The minimum share capital required to establish this type of organisation is EUR 25,000. It should be emphasised that the German GmbH’s shares cannot be sold to the general public or registered on the stock exchange. All daily decisions are made by the director, who is chosen by the shareholders’ general meeting.

German Joint Stock Corporation, or aG.

Large firms are best suited for this type of company. A minimum share capital of 50,000 EUR is necessary. A court or notary’s certification of the Articles of Association is required to establish an AG. Only after it is registered in the commercial register does it acquire legal status. It only acquires legal status after being recorded in the Commercial Register.

Limited Partnership in Germany

With two categories of partners—the general partner, who has unlimited liability that extends to their personal assets, and the limited partner, whose liability is restricted to their nominal ownership interests in the company—this type of partnership allows for the limiting of liability.

Solo Trader

Given that it only requires one person, this type of entity can be quickly created.

Branch offices are one of the most common ways for foreign investors to access the German market. Branch offices are completely reliant on the head office, which is also in charge of central administration.

Documents Required for Company Registration in Germany

The following paperwork is necessary for German company registration:

• a notarized copy of the articles of association (AOA), a registration application
• a document outlining the composition of the management board;
• a certificate attesting to the deposit of the share capital;
• Directors’ visas if they are foreign residents;
• Address of the company’s registered office; information about the directors and shareholders;
• any further information that the notary may require

Procedure for Company Registration in Germany

The following procedure has to be considered for company registration in Germany:

• selecting a business structure

Germany has a variety of company structures, as was previously mentioned. The applicant must first decide on the best business structure. A candidate for the GmbH entity would typically need to have EUR 25,000. Other business models exist in Germany, though, and they call for less funding. Decide on the business structure in accordance with the anticipated business activity.

• Business Name

The applicant will then need to select a suitable name for the business. If the company name is available, it must be verified in the Handelsregister (commercial register). The name must be original and may not conflict with the name of an organisation that has already been registered.

• Execute the Company deed

The company formation deed is drafted and signed in front of a notary as the next step. The founders will have to submit AOAs, IDs, and sample signatures.

• Business Bank Account

In Germany, there are various types of notary jurisdictions. Some notaries have very specific requirements for the bank. Finding a bank that appears on the list of approved banks is crucial.

• Put money in the bank account as a deposit (Stammkapital)

The capital needed for the company formation process is placed when the bank account is opened. The Stammkapital number may be provided by the applicant as a reference. After finished, the applicant for German company registration will see to it that the notary receives the deposit receipt.

• Payment to the Notary

The notary must then be paid after that. Moreover, the Handelsregister invoice must be paid in full. But, if the notary already completed the procedure, this one is not necessary.

• Once the firm is registered, the Notary will let the applicant know.

The notary will notify you once the firm has been registered. The business will be registered in the business registry.

• Get a licence or permit

Your company could need specific licences or permits from the German authority depending on the sort of economic activity to be conducted. Without it, one cannot function properly.

Compliances required for Company Registration in Germany

Setting up a business does not just stop at registering a company. There are different ongoing compliances which have to be followed by the company.

The following compliances are required for company registration in Germany:

• Annual Accounts: Shareholder meetings must be held at least once a year to vote on the company’s annual financial statements. The business would have to submit annual accounts to the German Federal Gazette in accordance with German Commercial Law (Bundesanzeiger).
• Board meetings—This would depend on whether it was indicated in the company’s articles of organisation.
• Establish a bank account. After registering your company, one of the most important procedures you must complete is opening a bank account in Germany. One of the best international financial infrastructures in the world is found in Germany.
• Tax returns must be filed with the appropriate tax authorities at least once every year.
• Corporate Income Tax: The local municipalities in Germany impose corporate tax (Körperschaftsteuer) and trade tax (Gewerbesteuer) on all businesses. The rate of corporate taxation is 15.825%.

Frequently Asked Questions

A German company’s directors may not be foreign nationals.

In a German corporation, a foreign national may indeed serve as a director. The foreign national must obtain the necessary visas in order to prevent any delays.

What much of capital is necessary to form a GmbH?

A GmbH must have at least EUR 25,000 in capital.

Would there be any charges for registering?

The corporation would be subject to some sort of registration cost as well as notary fee. This would cost about 500 euros.

What laws govern the formation of businesses in Germany?

The German Commercial Code is the body of law that governs the formation of corporations in Germany.

Do I need a German physical address for my registration?

Indeed, a potential candidate who want to form a company in Germany must have a physical address where they can conduct business.

Can I reserve my company’s name?

Indeed, the applicant would need to first register the firm name with the German Trade Registry. This procedure is used to determine whether there are any name-related conflicts with the company.

How long does it take in Germany to form a company?

Typically, the registration of a corporation in Germany takes two to three weeks.

What kinds of businesses can be established in Germany?

One may establish many kinds of businesses, including limited liability companies, joint stock companies, branch offices, etc.

What is the key document needed to register a business?

The Articles of Association are crucial for the incorporation of a business. For you, our consultants can assist in preparing them.

Do I need specific licences and permits to form a business?

Absolutely, depending on your line of work, you might require specific permits or licences.