The Location:
The Federal Republic of Germany is located in central-western Europe. The capital is Berlin; the official language is German, and the currency is the Euro (EUR). It has the world's fourth largest economy by nominal GDP, and the fifth largest by PPP. It is both the world's third-largest exporter and importer of goods. Germany is a member of: The European Union (EU); the Council of Europe (COE); the International Monetary Fund (IMF); the United Nations (UN); the World Bank (WB); the World Trade Organization (WTO); the International Monetary Fund (IMF); the G8; the G20, and the Organisation for Economic Co-operation and Development (OECD), among others.
Key Benefits & Features of Company Formation:
- There are five main forms of German company incorporation: Limited Liability Corporation (GmbH); Mini GmbH – UG; Sole Proprietor; Partnerships, and Stock Corporation (AG).
- Ready-made German companies complete with bank account, VAT number, and all notary fees and charges taken care of are also available as a quick and easy option.
- Process for company formation is strict, but very straightforward.
- Large network of Double Taxation Treaties (DDTs) with 80 countries and counting.
- Highly advanced banking system.
- Central European location makes business easy with rest of Europe in terms of proximity and time zone.
GmbH & Mini GmbH – UG
- With a simple structure designed for private companies only, a GmbH is the most common form of company in Germany.
- A Mini GmbH – UG is a smaller version of a GmbH. The minimum capital share for the former is €25,000, whilst for the latter it is €1.
- Both required a registered office, and a visit to Germany.
- Both require a minimum of one Shareholder, whilst a GmbH – UG also requires a minimum of one Director.
Sole Proprietor Company
- Offers a simple company type, with the least regulations.
- Company is required to be registered at the local trade office and the commercial register.
- Profits are subject to German income tax at individual rates.
- Unlimited liability for all liabilities, and debts lie with the sole trader.
Partnership
- Preferred option for foreign investors, or small and family-owned German businesses.
- Two options available; General (oHG), or Limited (KG).
- Requires a minimum of two partners; one of which can be a GmbH company.
AG
- Preferred option for major public companies.
- Requires a minimum share capital of €50,000.
- Requires a minimum of one Shareholder.
- As a listed company, strict regulations apply.
Additional Information:
- Obtaining a VAT number is an essential part of German company formations, which requires a virtual office.
- Face-to-face meetings are often required in order to open a Corporate Bank Account.