Companies looking to trade and operate in or from Germany will typically be required to register a legal entity such as a company, branch etc. It is important that you determine what activities you want to carry out from this entity as early as possible. Some business purposes require you to apply for a related licence from the beginning.
In general you have two main options when setting up an operational entity within Germany:
- Set-up of a new entity (e.g. limited liability company (GmbH), branch etc.)
- Purchase of a shelf company (limited liability companies/GmbHs).
The most common types of companies within the German jurisdiction for corporate clients are:
- Branch office
- Limited Liability Company (GmbH)
A GmbH requires at least one (personal or corporate) shareholder, EUR 25,000 as minimum share capital to be paid into a bank account, and the appointment of at least one personal managing director. The GmbH has to be registered with the applicable commercial register at the registered address. In Germany, all cities levy a special municipality tax (trade tax) to each corporate entity (which is not applicable for branches under certain circumstances). This trade tax differs from city to city and may have an impact on the business decision of where to set up the entity.
Office space requirements
A new entity in Germany always requires a legal registered address or registered address to be communicated to the authorities upon set-up, in order to be legally accepted. To be accepted by the tax authorities, it is required that sufficient substance at the registered seat of the entity can be documented and will be carried out accordingly, meaning that at least either the management or the accounting shall be done at the registered seat. It is highly recommended to review the substance requirements case-by-case as these depend on the business activity of each entity.
Company licence
Depending on the business activity of the entity, it is necessary to check whether an application for a licence is mandatory. In order to ensure a quick set-up process, such items should be checked in the very beginning. Timelines for the application and confirmation/provision of mandatory licences depend on the business activity and may vary from 2-3 weeks up to 6-12 months (e.g. banking licences).
Incorporation Services
Option 1: Incorporation of a GmbH
- Company name check with local chamber of commerce
- Preparation of the necessary power of attorney to attend the notarial deed for the incorporation
- Attendance of notarial deed for incorporation upon power of attorney
- Assistance with the preparation of the articles of association
Non-standard services
- Opening of a local bank account in Germany
- Legal registration with local authorities in Germany
- Tax registration in Germany (in close cooperation with the tax advisor)
Option 2: Purchase of a shelf company (GmbH)
- Company name check with local chamber of commerce
- Preparation of the share purchase agreement
- Assistance with the preparation of the amended articles of association
- Preparation of the necessary power of attorney to attend the notarial deed for the acquisition
- Attendance of notarial deed to sell and assign the shares
- Assistance with change of authorisation of the local bank account
Non-standard services
- Opening of an additional local bank account in Germany
- Supervision of the change of legal registration with local authorities in Germany
- Tax registration in Germany (in close cooperation with the tax advisor)
All our shelf companies are registered with the trade register in Frankfurt and are dormant until the date of the purchase. The share capital will be completely paid-in in the amount of EUR 25,000, reduced by the incorporation costs of approximately EUR 1,000.
TMF will take care of all actions to be taken in relation to the transfer of the shares and will arrange the necessary with the notary.
Option 3: Incorporation/registration of a German branch
- Branch name check with local chamber of commerce
- Collection of the necessary information and documents; advice on the various formal requirements and arrange for translations
- Assistance with the preparation of the related resolution of the mother entity to establish the branch
- Assistance with the necessary register application to establish the branch and related correspondence with the local notary
Non-standard services
- Opening of a local bank account in Germany
- Legal registration with local authorities in Germany
- Tax registration in Germany (in close cooperation with the tax advisor)
Domiciliation Services
- Provision of the Company's registered address at TMF’s premises
Non-standard Services:
- office space at TMF premises (ca. 18-20 sqm, basic furniture)
- direct telephone line
- answering incoming calls in the name of the Company
- renting of meeting rooms on a case-by-case basis
Mail Handling Services
- Forward of incoming mail (unopened) on a regular basis to a recipient to be named by the Company
- Opening and scanning of incoming mail, forwarded by email and by courier on a regular basis
- Opening and scanning of incoming mail, taking over routine correspondence with the authorities and third parties, if and where necessary in close liaison with the client and/or a party to be named
Archive Services for operational companies
- Storage of corporate and Company-related documents (10 and more folders per Company)
- Storage of corporate and Company-related documents after termination (for a defined period of time)