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Company formation in Germany almost always means a GmbH, the Gesellschaft mit beschränkter Haftung. It is the German limited company, the form someone looking for an LLC in Germany actually needs, and a single shareholder can set one up (section 1 GmbHG). The UG (haftungsbeschränkt) is not a separate legal form but a GmbH with share capital below EUR 25,000 and its own capital rules. An AG needs at least EUR 50,000 of share capital (section 7 AktG). A foreign company that wants no German subsidiary can instead register a branch (Zweigniederlassung) with the court of the district where the branch sits (sections 13d and 13e HGB).
| Point | GmbH | UG (haftungsbeschränkt) |
|---|---|---|
| Registered share capital | At least EUR 25,000 (§ 5 GmbHG) | Below EUR 25,000, at least EUR 1 (§ 5a GmbHG) |
| Capital paid before the register application | A quarter of every share, and EUR 12,500 overall (§ 7(2)) | All of it, in cash (§ 5a(2)) |
| Contributions in kind | Allowed, with a report on their value (§ 5(4)) | Excluded (§ 5a(2)) |
| Name must contain | Gesellschaft mit beschränkter Haftung or GmbH (§ 4) | Unternehmergesellschaft (haftungsbeschränkt) or UG (haftungsbeschränkt) (§ 5a(1)) |
| Statutory profit reserve | None | A quarter of each year’s net income, less any loss brought forward (§ 5a(3)) |
| Musterprotokoll | Up to three shareholders and one managing director (§ 2(1a)) | Same condition |
The UG reserve has no ceiling of its own. It ends only when the company raises its registered capital to at least EUR 25,000, for which it may use the reserve itself in a capital increase from company funds, and the company may keep its UG name even then (section 5a(3) and (5) GmbHG).
The articles of a GmbH need notarial form and the signature of every shareholder (section 2(1) GmbHG). A company with at most three shareholders and one managing director can use the Musterprotokoll, a fixed template annexed to the GmbHG. Nothing in it may depart from the statute, so clauses such as transfer restrictions or special voting rights cannot be added, and the template doubles as the first shareholder list (section 2(1a)). Companies with more founders, several directors or rules of their own use individual articles.
Under section 2(3) GmbHG the deed can also be recorded by video through the system the Bundesnotarkammer runs, each shareholder signing with a qualified electronic signature. This covers the Musterprotokoll, individual articles and, unless another form rule stands in the way, contributions in kind. Unanimous shareholder resolutions and the register application can be handled the same way (section 53(3) GmbHG, section 12(1) HGB). For a GmbH formed by video the register court is to make the entry as a rule within ten working days (Werktage) of the complete application, and within five where every shareholder is an individual and a Musterprotokoll is used (section 25(3) HRV).
Identification decides who can use the video route. Under section 16c of the Notarisation Act (BeurkG) the notary relies on a photo read from the chip of the person’s passport or ID card together with an electronic identity of assurance level “high”: the German ID card, the German eID card for EU and EEA citizens, the German electronic residence permit, or a notified eID from another EU or EEA state. A founder holding only a passport from outside the EU, with no German residence permit, cannot be identified this way. That founder signs before a German notary in person, before a German consular officer abroad, whose deeds stand equal to a German notary’s and may be drawn up in another language (section 10 KonsG), or through a representative with a notarially executed or certified power of attorney (section 2(2) GmbHG).
| Step | What happens | Legal basis |
|---|---|---|
| 1. Name, seat, objects | A distinctive name that does not mislead and differs clearly from names registered in the same municipality, with the legal form added; a seat in Germany and a domestic business address | §§ 18, 30 HGB; §§ 4, 4a, 8(4) GmbHG |
| 2. Articles | Notarial deed in person, by video or at a German consulate; Musterprotokoll or individual articles | § 2 GmbHG; § 10 KonsG |
| 3. Capital | GmbH: the paid share capital described above; UG: all of it; the court may ask for a receipt from a bank or payment institution in the EU | §§ 7, 8(2) GmbHG |
| 4. Register application | Filed electronically in certified form with the court of the seat: articles, shareholder list, the directors’ declarations on capital and disqualifications | §§ 7(1), 8 GmbHG; § 12 HGB |
| 5. Entry in Section B | The GmbH exists from its entry; anyone acting in its name before then is personally and jointly liable | § 11 GmbHG; § 3 HRV |
| 6. Transparenzregister | Beneficial owners reported without delay | § 20 GwG |
| 7. Tax office | Electronic tax registration questionnaire within one month; VAT identification number from the BZSt on application | § 138 AO; § 27a UStG |
| 8. Trade office | Gewerbeanzeige at the moment the trade starts | § 14 GewO |
Outside the video route the law sets no period, only that the court decides without undue delay (section 25(1) HRV); it can consult the chamber of commerce (IHK) on doubtful points such as a name (section 380 FamFG). The tax office does not send out its questionnaire: the company files the Fragebogen zur steuerlichen Erfassung itself, electronically, within one month of opening its business (section 138(1b) and (4) AO), and then receives its tax number (Steuernummer).
Germany has no single Companies House. The Handelsregister is kept electronically by the local courts (Amtsgerichte), each for its own district (section 8 HGB). Companies with share capital, the GmbH and the UG among them, sit in Section B (section 3 HRV), which is why a German company registration number reads “HRB” followed by digits and is always quoted with the name of the court that keeps it.
Anyone may inspect the register and the documents filed with it (section 9 HGB) through one search for all courts, the Gemeinsames Registerportal der Länder at handelsregister.de. A GmbH’s entry shows its name, seat, domestic business address, objects, share capital, date of the articles and managing directors (section 10 GmbHG); the shareholder list on file adds each shareholder’s name, date of birth and place of residence (section 40 GmbHG). Annual accounts are published on a separate platform, the Unternehmensregister, while the Transparenzregister of beneficial owners cannot be searched by the general public.
German company law asks nothing about where shareholders or managing directors live or which passport they hold. A GmbH can belong to one person, to several, or to a foreign parent company setting up a German subsidiary, and it can be managed entirely from abroad; a court has held that a managing director living outside the EU need not be able to enter Germany at any time. The director must be an individual with full legal capacity; a ban on a trade overlapping the company’s objects, or for five years a conviction for offences such as delayed insolvency filing or, with a sentence of at least one year, fraud, disqualifies the person, and comparable convictions abroad count too (section 6(2) GmbHG). Anyone who will actually work in Germany needs a residence title.
Founders in Singapore, the UAE, India or the United States therefore meet practical points rather than legal barriers: the identification limit of the video procedure, the domestic business address, and the checks of a German bank, which our page on bank accounts for German companies sets out. Tax follows the seat: a GmbH always has its statutory seat in Germany and is therefore fully liable to German corporate tax (section 1 KStG). Management from another country can make it resident there as well, which is where Germany’s more than 90 double taxation agreements come in.
| Tax | Rule | Source |
|---|---|---|
| Corporate income tax (Körperschaftsteuer) | 15% up to 2027, then 14% for 2028, 13% for 2029, 12% for 2030, 11% for 2031 and 10% from 2032 | § 23 KStG |
| Solidarity surcharge | 5.5% of the corporate tax, so 15.825% together with a 15% rate | § 4 SolZG |
| Trade tax (Gewerbesteuer) | 3.5% of trade income multiplied by the municipal Hebesatz; no allowance for a GmbH; from 2027 the Hebesatz is 280% unless the municipality sets a higher one | §§ 2, 11, 16, 36 GewStG |
| VAT (Umsatzsteuer) | 19% standard, 7% reduced | § 12 UStG |
| Small business exemption | Turnover of no more than EUR 25,000 last year and no more than EUR 100,000 this year; a waiver binds for five years | § 19 UStG |
| Dividends and gains on shares | Left out of a corporate shareholder’s income, with 5% treated as non-deductible; dividends only from holdings of at least 10% | § 8b KStG |
With a Hebesatz of 400%, for example, trade tax comes to 14% of trade income, and the total with corporate tax and surcharge to roughly 29.8% while the corporate rate stays at 15%. The participation exemption is what makes a German GmbH workable as a holding company. VAT pre-returns are quarterly, or monthly once the previous year’s VAT passed a threshold of EUR 9,000 (section 18(2) UStG).
Annual accounts go to the Unternehmensregister within twelve months of the year end (section 325 HGB). A small company, one that stays within two of the thresholds of EUR 7.5 million balance sheet total, EUR 15 million turnover and 50 employees, files only its balance sheet and notes and needs no audit. A micro company, within two of EUR 450,000 balance sheet total, EUR 900,000 turnover and ten employees, files the balance sheet alone and may have it deposited rather than published (sections 267, 267a, 316 and 326 HGB).
A new GmbH is the plainer route for most founders. A ready-made GmbH (Vorratsgesellschaft) suits a different case: contracts have to be signed by a company that already exists, so that nobody carries the personal liability of section 11 GmbHG, or a counterparty wants an earlier date in the register. It does not escape the capital rules. German courts treat the first use of a shelf company as an economic re-formation, so its managing director confirms the capital to the register court once more, and the share purchase needs a notarial deed that cannot be signed by video. Our guide to off-the-shelf companies compares the two routes in general.
We can form a new GmbH or UG or supply a ready-made company, prepare the documents the notary needs and the filings for the Handelsregister and the Transparenzregister, and help prepare the bank application. Where we have a working contact at a suitable bank we can introduce you, and the decision on the account is the bank’s alone. The Germany overview covers the country as a whole.
For a GmbH formed by video, the register court is to enter it as a rule within ten working days of a complete application, or five where all shareholders are individuals using a Musterprotokoll, and must explain any delay (section 25 HRV). For a deed signed in person the law only requires a decision without undue delay.
Yes. Shareholders and managing directors can be of any nationality and live anywhere, and the company can be run from abroad as long as it keeps a German business address. The practical limit is identification: the video procedure needs a German or notified EU or EEA electronic ID, so a founder holding only a non-EU passport signs before a German notary, at a German consulate or through a representative with a certified power of attorney.
It is the statutory template for forming a GmbH or UG with at most three shareholders and a single managing director (section 2(1a) GmbHG). One document holds the articles, the director’s appointment and the shareholder list, and it cannot be changed or extended. It suits a simple company owned by one to three people; a company that needs its own rules on shares, votes or transfers uses individual articles.
Yes. A German notary records the articles through the video system of the Bundesnotarkammer, the shareholders sign with qualified electronic signatures and the register application is certified the same way (section 2(3) GmbHG, section 12 HGB). Every participant needs one of the electronic IDs listed in section 16c BeurkG; a founder without one uses a notary in person, a German consulate or a representative.
A GmbH needs registered capital of at least EUR 25,000. Before the application a quarter of each share and EUR 12,500 overall must be paid in, and the rest is paid when the shareholders call it. A UG can have any capital below EUR 25,000, at least EUR 1, paid in full and in cash, and must then build a reserve from a quarter of each year’s net income.
It is the number the local court gives the company in the Handelsregister: for a GmbH or UG “HRB” plus digits, always quoted with the court’s name. Anyone can look it up on handelsregister.de. The tax number from the tax office, the VAT identification number from the BZSt and the business identification number (Wirtschafts-Identifikationsnummer, starting with DE) are separate numbers.
If you want to know what forming a GmbH or UG in Germany would need from you, given where you live and which ID you hold, or whether a ready-made company fits your plans better, contact us; we also answer on Telegram and WhatsApp at +48 663 247 166.