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Company Formation in Germany

Entity Type: GmbH


Name Details

Does the name of the company require approval by the Registry or other authorities?

No, but a review on whether the chosen name is restricted by legal requirements or trademark rights of third Parties required. The name will always have to use the suffix “GmbH”. We generally double-check with the chamber of industry and commerce whether the name can be used.

How many prospective names will you require?

One.

Are there any restrictions or limitations on words that can be used in company names?

Words that are registered by third parties’ as trademarks cannot be used. Further, words of common use might entail difficulties; there must be some potential for the entity to be differentiated from others.

Address Details

Does the company need to provide a registered address?

Yes, it has to have a domestic business address. This can also be a c/o address.

Are there any limitations on the registered address (i.e. must be in-country, must not be a PO box)

It must be in-country; a PO box is not permissible.

If the client has no physical location incountry, can they use your address for the purposes of registration?

We do not offer our business address for purposes of registration. However, we can liaise with a tax law firm in Frankfurt, which is offering such services.

Officer Details

How many Directors are required?

One.

Are any other officers required (i.e. Secretary)?

No.

What personal details will you need for each officer?

  • Full name
  • Date of birth
  • Residential address

Plus, ideally copy of ID card, driving license or Passport), representation powers (e.g. sole or jointly; released from the restrictions of selfdealing).

Is there a requirement for any in country resident directors?

No. It is not mandatory to appoint an in country resident director. However, from a tax law perspective, if the company has no MD’s residing in Germany, it would be required that MD decisions are physically taken in Germany. This should be properly documented, as otherwise taxation of taking residence abroad could be triggered (approx. 30% of company value). This should be checked by the tax advisors.

Do you need proof of address or Identity for officers? If YES, in what format?

Copy of ID card or passport showing the details outlined above. As the MD will also need to be authorised to handle the company’s bank account, such copy must be notarized and apostilled (or other form of legalisation if applicable).

Shareholders Details

How many shareholders are required?

One.

Are there any restrictions on who can be a shareholder?

Minors can only be shareholders if their legal representatives (parents) act on their behalf. Depending on the business to be performed by the company, a foreign shareholder needs to be permitted by the German Ministry of Economics, if the foreign shareholder acquires 25% or more of the share capital / voting rights (e.g. if the company is active in the defence industry).

What information will you require about shareholder?

  • Full name
  • Date of birth
  • Residential address or full company name, registration number if any, registered business address, authorised signatories (representatives who are authorised to sign either solely or jointly for the shareholder).

Will you require proof of address or ID from the shareholders?

Ideally a copy of ID card or passport or an excerpt from the equivalent of the commercial register (each to be notarised and apostilled, or other form of legalisation, if applicable).

Share Capital

Will the company need to specify a maximum number of shares that can be issued?

No, but the minimum share capital must be EUR 25,000 and the number of shares must be specified.

Is any stamp duty paid on the issued share capital? If YES, at what rate is this calculated.

No, however, notarial costs and costs for the commercial register will be incurred (amount depends on the nominal value of the registered capital.)

Other Details

Do you require any further information about the company or its officers?

  • What share capital is desired? Can be less than the usual EUR 25,000 share capital but this will entail statutory restrictions in the Articles of Association (AoA) and certain other aspects of the company.
  • The exact nature of the business (this will be set out in the AoA).
  • The desired fiscal year (if not congruent with calendar year approval by tax authorities required).
  • The desired seat of the company to submit filings to the correct local court.

Procedure

1 step: Foundation

  • Signing of the foundation deed and the articles of association by the new shareholders in the presence of a notary
  • Appointment of the new managing directors during the notary meeting 2 step: Bar Contribution
  • The share capital of a GmbH must be at least EUR 25,000.00 and minimum EUR 12,500.00 has to be transferred to the bank account of the new company. The contribution must remain in the bank account until registration. 3 step: Application
  • Application of the new company with the commercial register by the new managing directors. The application has to be signed in the presence of notary.

Please note: Depending on the registered seat of the shareholders, the place of the notarisations or the residence of the new managing directors we require further documents like notarized and apostilled power of attorneys, secretary certificates or extracts from the Commercial Register.

Timescale

How long will it take to complete incorporation?

On receipt of all documents and information from the client, drafting and executing the foundation deed will only take a few days

The company’s bank account must be opened (each bank has its own “knowyour-customer” requirements) and the share capital must be transferred

The new MD(s) can sign and file the application to the Register Court. The times required for the opening of the bank account and the registration cannot be estimated.

If the client requires a new GmbH on short notice a shelf-company should be acquired instead of establishing a new entity (the overall costs would be same).

Is there any way to expedite the incorporation for an extra fee?

No.

Costs

Fees for Incorporation

Fees depend on the number of MDs to be appointed, the number of shareholders, the extent of foreign companies/persons involved and the extent the AoAs need to be tailored to custom.


Latest version updated 2nd May 2018

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Population

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GDP

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