Company Formation in Germany

Last updated: April 2026.

Germany is the EU's largest economy and the second-largest destination for foreign direct investment in the bloc. The workhorse corporate vehicle is the Gesellschaft mit beschränkter Haftung — GmbH — with around 1.3 million active entities on the Handelsregister. Minimum share capital is €25,000, of which at least €12,500 must be paid in before registration. A GmbH can be formed with a single founder and a single managing director, and neither has to be a German resident. The combined corporate and trade tax burden sits around 30%, varying by municipality. Since August 2022 cash-foundation GmbHs and UGs can be notarised by video link rather than in person.

We form German GmbHs and UGs end to end: IHK name clearance, drafting, notary coordination (in person or online), capital account opening, Handelsregister filing, tax and transparency-register registrations, and business bank introduction. Fixed price, dedicated German-qualified counsel, all notary and court fees built in.

Quick facts	Value
Corporate Income Tax (Körperschaftsteuer)	15% + 5.5% solidarity surcharge = 15.825%
Trade Tax (Gewerbesteuer)	3.5% base × municipal multiplier (Hebesatz) 200–900%
Combined effective company tax	~30% (24%–36% depending on municipality)
VAT (Umsatzsteuer)	19% standard / 7% reduced
VAT small-business threshold (domestic)	€25,000 prior year / €100,000 forecast current
Minimum share capital (GmbH)	€25,000 (€12,500 paid up at registration)
Minimum share capital (UG "Mini-GmbH")	€1 (paid in full)
Minimum directors / shareholders	1 managing director, 1 shareholder (can be the same person, can be a non-resident)
Residency requirement	None in law; German-resident MD often helps with banking
Standard formation time	2 to 6 weeks (notary to Handelsregister entry)
Government fees	Included in our packages
Language of filings	German (notarial deed must be in German; sworn translation on request)
Currency	Euro (EUR)

Why Form a Company in Germany

Germany is 25% of EU GDP. A German company sits inside the largest single consumer market in Europe and the deepest B2B industrial supply chain on the continent. Three reasons foreign founders pick it.

The GmbH is a trust-badge. German suppliers, distributors, landlords, and banks default to "GmbH" as a proxy for a serious, capitalised counterparty. Over a century of case law under the GmbHG (the GmbH Act of 1892, last major overhaul in 2008) gives directors and shareholders a predictable rulebook. Counterparties recognise a GmbH without asking questions they ask of an offshore company.

EU access is full. A German company is an EU company. Parent-Subsidiary Directive relief on outbound dividends, Interest and Royalty Directive relief, freedom of establishment, single-market VAT via OSS — all apply. For non-EU groups needing a substantive EU holding or operating presence, Germany is a natural choice alongside the Netherlands and Luxembourg.

Public funding and incentives are real. KfW development bank programmes, state-level (Länder) investment grants, the Forschungszulage R&D tax credit (25% on qualifying wage costs, raised in 2024 under the Wachstumschancengesetz), and regional subsidies for structurally weak areas make Germany competitive on effective cost despite the nominal ~30% tax rate.

The trade-off is bureaucracy and tempo. A GmbH cannot be formed in 24 hours. Notarisation is mandatory for the articles, the Handelsregister entry takes one to three weeks, and traditional German banks move slowly on non-resident-controlled foundations. Realistic end-to-end is 3 to 4 weeks for a clean file.

Company Types Available in Germany

German corporate law gives you eight recognised forms. The first two cover almost every cf24 client.

GmbH (Gesellschaft mit beschränkter Haftung)

The default limited liability company. Minimum share capital €25,000, with €12,500 paid up at registration. Limited liability for shareholders up to the value of their shares. One or more managing directors (Geschäftsführer) who need not be German residents. Mandatory notarisation of the articles and of any share transfer. Annual filings: financial statements to the Unternehmensregister, trade tax and CIT returns, VAT returns. Statutory audit only for medium and large companies under § 267 HGB — small GmbHs (turnover ≤ €12m, balance sheet ≤ €6m, 50 employees — two of three) are exempt.

UG (haftungsbeschränkt) — "Mini-GmbH"

A GmbH variant introduced in 2008 to compete with the UK Ltd. Minimum share capital €1, paid in full at registration (no in-kind contributions). Limited liability identical to the GmbH. Catch: until the company has built up €25,000 of equity through retained profits, at least 25% of annual net profit must be allocated to a statutory reserve. Once the €25,000 threshold is reached, the UG can be converted into a full GmbH or continue as a UG without the reserve requirement. Suitable for bootstrapped startups with tight cash and no immediate need to signal capital depth to counterparties.

AG (Aktiengesellschaft)

The stock corporation. Minimum share capital €50,000. Two-tier governance: management board (Vorstand) plus supervisory board (Aufsichtsrat). Heavier governance, quarterly reporting, and mandatory audit. For listing, large unlisted groups, or regulated businesses (insurance, banking). Rarely the right choice for a first German entity.

GmbH & Co. KG

A hybrid: a KG (limited partnership) whose general partner is a GmbH. Result: limited liability (the GmbH absorbs the unlimited-liability role), plus partnership tax treatment for the KG level — no corporate income tax on the KG; partners are taxed on their share of profits. Widely used for Mittelstand family businesses, real estate vehicles, and tax-sensitive holding structures.

OHG (Offene Handelsgesellschaft) and KG (Kommanditgesellschaft)

General and limited partnerships. OHG: two or more partners with unlimited joint liability. KG: one or more general partners with unlimited liability plus limited partners whose exposure is capped. Partnership tax treatment. Limited cf24 use cases beyond specific family-business and fund structures.

GbR (Gesellschaft bürgerlichen Rechts)

Civil law partnership. Under the Modernisation of Partnership Law Act (MoPeG), in force since 1 January 2024, the GbR now has statutory legal capacity and can be entered into a new dedicated company register (eGbR). Used for professional partnerships, joint ventures, and informal co-operations where a full commercial form is disproportionate.

Branch (Zweigniederlassung)

A foreign company's registered branch. Not a separate legal person. Requires Handelsregister entry and Gewerbeanmeldung. Useful where you specifically need the parent's balance sheet on German contracts; rarely the right choice for a new venture.

Form	Min capital	Liability	Tax treatment	Common use
GmbH	€25,000 (€12,500 paid)	Limited	CIT + trade tax	SMEs, subsidiaries, operating cos
UG	€1 paid in full	Limited	CIT + trade tax	Bootstrapped startups
AG	€50,000	Limited	CIT + trade tax	Listed, large unlisted
GmbH & Co. KG	€25,000 (on the GmbH)	Limited in effect	Partnership (no CIT at KG)	Mittelstand, real estate
OHG / KG	None statutory	Unlimited / mixed	Partnership	Joint ventures, funds
GbR	None	Unlimited	Partnership	Civil partnerships
SE	€120,000	Limited	CIT + trade tax	Cross-border groups
Zweigniederlassung	n/a	Parent's	Parent + DE on DE source	Foreign branch

For founders who cannot wait 3 to 4 weeks for Handelsregister entry, consider a ready-made German GmbH — a pre-incorporated dormant entity transferable by notarial deed within days.

Step-by-Step Formation Process

The end-to-end timeline assumes a standard GmbH with a non-resident managing director, formed on the standard protocol.

1. Name clearance. We run the proposed name through the local Industrie- und Handelskammer (IHK) to confirm availability, distinctiveness, and absence of misleading terms. Reserved terms ("Bank", "Versicherung", "Treuhand") need regulator approval. Two or three alternatives are normal.

1. Documentation pack. We draft the Gesellschaftsvertrag (articles of association), Gesellschafterliste (shareholder list), appointment resolution for the Geschäftsführer, and — for a single-shareholder standard GmbH or UG — the simplified "Musterprotokoll" standard protocol if the structure fits. You provide certified passport plus address proof for each shareholder, UBO, and managing director.

1. Notary appointment. The articles, share allocation, and director appointment are notarised by a German notary (Notar). Since August 2022, cash-foundation GmbH and UG notarisations can take place by video link under § 2 para. 3 BeurkG, removing the need to travel to Germany for most non-resident founders. In-kind contributions and mixed foundations still require in-person notarisation.

1. Capital contribution account. The notary's deed triggers the bank: at least €12,500 is transferred into a dedicated capital account. The bank issues an Einzahlungsbestätigung confirming the deposit. Traditional banks (Sparkasse, Commerzbank, Deutsche Bank) issue these; most EMIs do not — choice of bank at this stage matters.

1. Handelsregister filing. The notary files the company electronically with the local Amtsgericht (Handelsregister). Processing at the register takes between 1 and 3 weeks in most jurisdictions; Berlin and Munich sit at the longer end, smaller Amtsgerichte move faster. The company is legally formed on entry (eintragung).

1. Trade registration and tax. Within 14 days of starting operations the Gewerbeanmeldung is filed at the local Gewerbeamt. The Fragebogen zur steuerlichen Erfassung is then filed with the Finanzamt — the tax questionnaire that triggers issuance of a corporate tax number, trade tax number, and VAT ID (USt-IdNr.) via the Bundeszentralamt für Steuern (BZSt). The VAT ID typically arrives within 4 to 6 weeks.

1. Transparenzregister. Beneficial owners — natural persons holding more than 25% or otherwise exercising control — must be registered with the Transparenzregister. Late or false filings carry penalties up to €150,000 under the GwG.

Realistic end-to-end: 3 to 4 weeks from engagement to Handelsregister entry and a working business bank account. Same-day express options do not exist in German company law — the register has its own pace.

Required Documents

For each shareholder, managing director, and UBO we need:

• Government-issued photo ID (passport preferred; EU national ID accepted)
• Proof of address dated within the last three months — utility bill, bank statement, or government letter
• Date of birth, nationality, place of birth, occupation, and current residential address
• Tax identification number (TIN) from country of residence
• For corporate shareholders: certificate of incorporation, register of directors, current commercial extract, list of UBOs, and a certified board resolution authorising the German subsidiary

You also confirm the registered office address (we provide one in Berlin, Munich, or Frankfurt if you do not have a German address), the share structure, the business purpose (Unternehmensgegenstand), and the initial managing director(s).

Foreign corporate documents must be in German or translated by a sworn translator (beeidigter Übersetzer), and apostilled under the 1961 Hague Convention where the issuing country is a signatory. For non-Hague countries consular legalisation applies. Apostille and sworn translation are included in our international packages.

Costs and Timeline

German formation has three fixed cost blocks: notary fees (regulated by the GNotKG — notary fees scale with share capital, so a €25,000 GmbH costs more than a €1 UG), court fees for the Handelsregister entry, and our professional fee for drafting, coordinating, filing, and tax and banking registrations.

Our packages cover the full incorporation, IHK name clearance, articles drafting (standard protocol or custom), notary appointment and coordination (in-person or online video), capital account introduction, Handelsregister filing, Gewerbeanmeldung, Finanzamt tax registration, VAT ID application, Transparenzregister filing, and a German business bank account introduction. Contact us for a fixed-price quote — no hourly billing, no government surcharges invoiced later, no hidden notary supplements.

Typical timeline from KYC clearance:

Day	Milestone
0	Engagement, KYC submitted
1–3	KYC cleared, articles drafted, foreign documents translated and apostilled
4–7	Notary appointment (online or in-person), deed executed
7–10	Capital contribution account opened, €12,500 deposited
10–14	Notary files with Handelsregister
14–28	Handelsregister entry issued
21–35	Gewerbeanmeldung, Finanzamt questionnaire, VAT ID application
28–42	VAT ID issued; operating bank account opened

Build in more time for complex shareholder structures, in-kind contributions, or regulated business activities (Erlaubnispflicht under the GewO).

Tax Overview for German Companies

German corporate taxation is a two-layer system — federal corporate income tax plus municipal trade tax. Add VAT and targeted withholding rules and you have the full picture.

Corporate Income Tax (Körperschaftsteuer): 15% on taxable profits, plus a solidarity surcharge of 5.5% of the CIT (so effective CIT is 15.825%). The solidarity surcharge on corporate profits has not been abolished — the 2021 reform only removed it for most individual taxpayers.

Trade Tax (Gewerbesteuer): every company with a permanent establishment in Germany pays a municipal trade tax. The base rate is 3.5% of taxable trade income. Each municipality then applies its own multiplier (Hebesatz), set by the city council, ranging from around 200% (small Bavarian and Brandenburg communes) up to 580% or more in parts of the Ruhr. Berlin sits at 410%, Munich at 490%, Frankfurt at 460%. A €1m trade income in Munich produces trade tax of roughly €171,500, on top of CIT. For low-tax seat planning, municipalities such as Monheim, Grünwald, or Gemeinden in Brandenburg offer multipliers in the 240–280% range.

Combined effective company tax therefore lands between 24% and 36% depending on municipality. Most urban seats produce a combined rate around 30–33%.

VAT (Umsatzsteuer): 19% standard, 7% reduced (foodstuffs, books, public transport, hospitality). The domestic small-business threshold sits at €25,000 previous-year turnover and €100,000 forecast current year — below this, the Kleinunternehmerregelung waives VAT. Foreign suppliers of B2C services into Germany register from the first euro under standard or OSS rules.

Withholding tax. Outbound dividends to non-residents attract 25% + 5.5% solidarity = 26.375%, reduced to 0% for EU corporate shareholders holding ≥10% for 12 months under the Parent-Subsidiary Directive, and usually to 5% or 15% under Germany's double-tax treaty network (nearly 100 treaties). Interest is generally 0% WHT to non-residents — with exceptions for convertible and profit-sharing bonds (25% + solidarity). Royalties are 15.825%, with 0% under the EU Interest and Royalties Directive for qualifying EU recipients.

Capital gains on the sale of subsidiary shares are 95% exempt under § 8b KStG for corporate shareholders (effective tax ~1.5%). This makes Germany a workable holding jurisdiction for corporate groups, though Luxembourg and the Netherlands are usually more aggressive for pure holding SPVs.

E-invoicing: mandatory from 2025 onwards. Since 1 January 2025, every German B2B company must be able to receive structured e-invoices (XRechnung or ZUGFeRD 2.1+). Paper and PDF issuance remains permitted through 2026 as a transition. From 1 January 2027, companies with prior-year turnover above €800,000 must issue e-invoices. From 1 January 2028, issuance is mandatory for all B2B turnover. We include e-invoicing setup in our accounting packages.

R&D tax credit (Forschungszulage) was expanded under the 2024 Wachstumschancengesetz: 25% credit on qualifying wage costs, with the basis cap raised to €10 million per year and subcontracted research partially eligible.

Banking for German Companies

German banking for companies splits clearly along two axes: does the bank accept non-resident-controlled companies, and does it issue the capital contribution certificate (Einzahlungsbestätigung) required for Handelsregister entry.

Commerzbank is the Mittelstand corporate bank of reference. Full English service on the international desk, good at SME-sized GmbHs, issues the Einzahlungsbestätigung. Onboarding for non-resident-controlled companies is conservative and typically wants a German-resident or EU-resident managing director. Fees mid-range.

Deutsche Bank handles larger corporate mandates and offers Deutsche Bank International for cross-border structures. Slow on small new-formation GmbHs with non-resident founders; better if your structure includes a €250k+ operating balance or multi-entity group banking.

HypoVereinsbank (UniCredit Group) is often more open to international shareholder structures than the two domestic majors, thanks to its Italian parent's cross-border footprint. Issues the Einzahlungsbestätigung and works well for EU-cross-border GmbHs.

Sparkasse — the network of public savings banks, over 300 of them — is the dominant small-business bank. Each Sparkasse is a separate legal person with its own onboarding policy. Decisions turn heavily on whether the company and its directors sit in the Sparkasse's Kreis (district). For non-resident founders, choosing an office location inside a business-friendly Sparkasse's footprint is a practical lever.

N26 Business (a German-licensed digital bank) and Qonto (a French-German EMI with strong DE coverage) handle most new-economy GmbHs and UGs. N26 takes freelance and solopreneur UGs readily; Qonto has become the default second bank for tech startups and offers a dedicated GmbH foundation account flow with a partner bank that issues the Einzahlungsbestätigung. Finom, Holvi (Finnish), and Kontist cover other niches.

Wise Business is useful for multi-currency operations and sits on top of a GmbH's primary German bank, but Wise does not currently issue the Einzahlungsbestätigung required to deposit share capital for a GmbH foundation. For that step, a licensed bank is needed — we coordinate with Commerzbank, HypoVereinsbank, or a business-friendly Sparkasse as part of our formation packages.

Frequently Asked Questions

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

A clean standard GmbH file from notary to Handelsregister entry takes 2 to 6 weeks, with 3 to 4 weeks typical. Notarisation happens within days — the wait is at the Amtsgericht, which processes register entries in 1 to 3 weeks depending on city. Add another 1 to 2 weeks for the VAT ID to arrive from the BZSt. End to end, plan on roughly 4 weeks from engagement to a trading company.

Can a foreigner set up a GmbH in Germany?

Yes. German company law imposes no residency or nationality requirement on shareholders or managing directors. A non-resident foreigner can be the sole shareholder and sole Geschäftsführer of a GmbH. Practical friction shows up at two stages — notarisation (solved by the video-notary option introduced in August 2022 for cash foundations) and at the capital account bank, where German-resident MDs face less onboarding friction.

What is the minimum share capital for a GmbH?

The statutory minimum is €25,000 for a GmbH, with at least €12,500 paid in cash before registration with the Handelsregister. The balance is a receivable of the company against its shareholders and must be paid in when called. For founders with tighter cash, the UG (haftungsbeschränkt) requires only €1 paid in full — but at least 25% of annual net profit must be allocated to a statutory reserve until the company's equity reaches €25,000.

What is the difference between a GmbH and a UG?

Both are limited liability companies under the same GmbHG rules. A GmbH needs €25,000 minimum capital with €12,500 paid up; a UG can be formed with €1 paid in full. The UG must retain 25% of annual profit as a statutory reserve until equity reaches €25,000, and it must use the full "UG (haftungsbeschränkt)" suffix in its name. Once the €25,000 threshold is reached, most UGs convert to full GmbH status by notarial deed.

What taxes does a GmbH pay?

A GmbH pays corporate income tax (Körperschaftsteuer) at 15% plus a 5.5% solidarity surcharge, giving effective CIT of 15.825%. It also pays municipal trade tax (Gewerbesteuer) at 3.5% base × the local multiplier (200%–900%). Combined effective company tax is around 30%, ranging from 24% in low-multiplier municipalities to 36% in high-multiplier cities. VAT of 19% applies to most supplies.

Can I form a GmbH online without visiting Germany?

For a straightforward cash-foundation GmbH or UG, yes. Since 1 August 2022, § 2 para. 3 BeurkG permits notarisation by video link for cash foundations and certain share transfers. The founder joins the notary over a secure video platform using a German eID-compatible identification. In-kind contributions, mixed foundations, and some restructurings still require in-person notarisation in Germany.

Do I need a German-resident managing director?

The law does not require one. In practice, German business banks, tax advisors, and the Finanzamt prefer to see at least one German- or EU-resident contact to accelerate onboarding and correspondence. For purely remote non-resident founders, we can arrange a compliant resident point-of-contact role — not a nominee — that satisfies banking and tax workflow without compromising ownership or control.

Get Started — Form Your German Company

A fixed-price quote in 60 seconds. Notary coordinated, capital account opened, Handelsregister filing handled, tax and VAT registrations done. Typical GmbH is up, registered, and operating within 3 to 4 weeks.

Call +48 2222 5 2222 or email [email protected] to start. We work with founders in English, German, Polish, and Russian.

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Content prepared by Piotr Walter, In-house Counsel. Approved by Tomasz Bielski, Managing Director.