Germany Limited Company Incorporation

How to Incorporate a Limited Company/ Gesellschaft mit beschränkter Haftung (GmbH)

The name of a GmbH must be derived from the surname of one or all of its shareholders. Alternatively, it must contain a component from which the object or nature of the business may be sufficiently inferred, and readily comprehensible to outsiders. The company name may contain a mixture of both the surnames of the shareholders and the nature of the business. Other than that, one may choose to add an imaginary designation. Further demanded by law is an indication of the corporate form, in this case you need to include the suffix denoting the German equivalent for a private company limited by shares, ‘Gesellschaft mit beschränkter Haftung’, or ‘GmbH’.

The company name will be checked with the Chamber of Commerce and Industry. The objects of the proposed GmbH may require official approval. We then need confirmation from the German Trade Register, the ‘Handelsregister’. There are more than 400 local trade registers in Germany, as well as several Chambers of Commerce and Industry.

We then draft the Articles of Association and the foundation agreement, which are filed with the local Trade Register, and provide assistance with opening a bank account and depositing the share capital.

Finally we notify the local trade register of the establishment of the business.

Formacompany has over 20 years’ experience forming companies in Germany and across the world, and our staff will be available to offer advice and support through the entire incorporation process, from initially selecting a suitable company name through to finally commencing taxable activities.

What you need to set up a Limited Company/ GmbH in Germany

To begin incorporation of your German GmbH we will require the following:

• Your company name
• The full name, date of birth, address and nationality of all directors
• The full name and address of all shareholders

Documents you are required to provide:

• Proof of identity (passport, national identity card, photographic driving licence)
• Proof of residential address (gas/electricity bill or credit/debit card bank statement dated within the last three months)

Registered Office

All GmbHs must have a registered agent and a registered office. The registered office is where documents may be legally served on the company and must be a physical address in Germany– this is included in our Standard Company Formation Package.

Shares and Share Capital Requirements

• Share capital of a limited liability company (GmbH) must be at least €25,000.
• The share capital must be divided into shares with a minimum face value of €100.
• Capital contributions of varying amounts can be made by the shareholders to make up the share capital. However a capital contribution must be at least €100 and must be divisible by 50.
• Capital contributions may be made either in the form of cash subscription, or in the form of investments in kind. When incorporating, your bank account must be opened immediately after signing the deed of incorporation with the notary, and the share capital must be deposited into the account. Also, a bank statement showing the amount of capital used for the company incorporation needs to be filed with the Court of Registration, along with the Company Statutes

Ready Made Companies

• We have shelf companies in Germany currently available, with a standard Memorandum and Articles designed to permit most general activities; making it possible to commence business at very short notice. Our ready made companies are in good standing, are not the subject of any insolvency proceedings and have not entered into any contracts or engaged in any business activities.

Services included in our Fee

All duties, taxes and professional fees are included in our package and this includes, but is not limited to:

• The Notary Public fees (excluding any translation costs)
• Production of the Notarial Deed (Notariatsakt) and publication of the GmbH registration.
• Costs associated with the registration of a company include a corporate tax, court expenses, incorporation fees and publication of the application in the Bundesanzeiger – Federal Gazette

What you receive after setting up your new business

1. Minutes of the first inaugural meetings
2. Copies of the Memorandum of Association and Articles of Association
3. Original Certificate of Incorporation
4. Share Certificates for each shareholder specified, plus two blank certificates

Advantages to Setting up a Limited Company/ GmbH in Germany

1. Incorporating in Germany provides access the world’s fourth biggest economy. Germany is the biggest economy in the EU and the fourth biggest economy in the world, it has excellent business advantages including its economic performance, government efficiency, business efficiency and infrastructure.
2. A German GmbH is legally exempt from dividends tax received from a foreign subsidiary. As a member of the European Union (EU), Germany is governed by the provisions of the EU’s Parent-Subsidiary directive. Thus, an German holding company which holds at least 25% of the shares of an EU subsidiary can receive dividends from the subsidiary free of withholding tax.
3. An German GmbH reduces the tax burden on shareholders. Your GmbH provides access to the large network of double taxation treaties Germany has signed with major trading nations around the world.
4. A German GmbH requires minimal infrastructure. A minimum of one director and one shareholder is required to incorporate a limited company in Germany; these can be the same person, can be of any nationality and need not be resident in Germany. 100% foreign shareholder ownership is allowed and corporate shareholders are permitted. Nominee shareholders are allowed and Formacompany can provide this service.
5. A German GmbH requires a German corporate bank account. Formacompany can assist you in opening a corporate bank account to support your German company formation. The account includes world-class, multi-currency, internet banking facilities Formacompany only works with German banks that are highly regarded locally and internationally.

Important information about incorporating a Limited Company/ GmbH in Germany

• The GmbH is the most common form of incorporated company in Germany. This is effectively the same type of company as the Spanish SL, the French Sàrl, the Dutch BV, or the Private Limited Company in the UK.
• In normal cases, the suffix ‘Gesellschaft mit beschränkter Haftung’ or the abbreviation GmbH must always be appended to the company designation.
• A director must travel to Germany to finalise the incorporation.
• Shareholders’ contributions can be in cash or in the form of non-cash contributions, in the case of a non-cash formation the shareholder must provide a report with the valuation of their contribution.