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Relocating a company to Germany 2022: up-to-date information on transferring your business to a European state

Publication date: 05.11.2022
Business immigration to Germany is a specialized German federal program for citizens from other countries, which makes it possible to obtain a residence permit and a business visa, as well as start your own business in the state.

This option has been available to foreigners since 2012. In 2022, business relocation to Germany has become especially relevant due to the introduction of mutual sanctions between Russia and Western countries.

A distinctive feature of the relocation is to start an "old" business in a new place without citizenship, connections, and partners. In this article, we will tell you in detail what to do for those who want to transfer their enterprise to a European country.

Why businessmen prefer Germany

Germany is an industrial and economic European center and one of the fastest-growing economies in the world. In COVID 2020 alone, Germany's contribution to the EU economy amounted to about a quarter of the total contribution of all EU member states. This once again speaks of the stability of the economic and tax systems, as well as the country's favorable investment climate. Other benefits in Germany include:
  • 1
    Affordable bank loans: most financial institutions in Germany provide loans from 4% per annum for business development. However, it is worth noting that if you want to receive funds, you must provide data on a good credit history.
  • 2
    Availability of a large number of skilled workers. This means that the businessman can hire professional employees and specialists for any vacancy.
  • 3
    There are no minimum wages. This means that the employer independently sets the salary for a certain number of hours worked.
  • 4
    Good tax conditions for doing business. Firstly, all communication with inspectors takes place online. Secondly, after you set up a company, you get an easy tax inspection regime for three years, which allows your business to get firmly established.
  • 5
    The privilege to produce and sell products under the German brand.
  • 6
    Owning a business in Germany gives you a good chance to obtain a residence permit for you and your family members (spouse and children).
  • 7
    You have a chance to open branch and representative offices in other EU countries.
  • 8
    Special rates for medical insurance.
  • 9
    Registration of subsidies for various needs.
  • 10
    Developed logistics and energy infrastructure within the country.
  • 11
    High consumer purchasing power.
  • 12
    You can rent a property under a company name at half the price. Businessmen also pay a reduced property tax on property registered in a company.
  • 13
    Safety. Germany is one of those countries where the risks of a corporate raid, a hostile takeover of a company, or other dishonest actions are reduced to zero.
  • 14
    Privacy. Property owner data is not publicly available.
By the way, concerning a residence permit, the rules for Russian citizens with a business visa have remained the same in 2022. The grounds for obtaining a residence permit are still:
  • 1
    Relevant and promising business plan.
  • 2
    High demand for the field of activity in which the company will operate.
  • 3
    Good start-up capital in the form of cash, other assets, or creditor liabilities.
  • 4
    The presence of a relevant specialty, good personal qualities, and the absence of legal problems.

Relocating a company to Germany: forms of business ownership and ways of opening a company

When relocating a ready-made business to Germany, every businessman has a natural question: what form of ownership is better to start in a new place? The final answer depends on the industry the businessman works in, the taxation features of each form, the size of the business, and other important factors. To make the selection process easier and clearer, you need to seek the help of professionals. DVP Audit lawyers and auditors provide services for the relocation of companies to Germany with full client support. In general, there are several forms of starting a business that a businessman can choose in Germany.

1. Joint-stock company (AG).

The work of such companies is governed by a separate law. The main information that you need to know when opening such a company is that its participants are responsible for the affairs of the company according to the distributed shares.

One or more partners from among individuals or companies can become the founder of a joint-stock company.

The price of one share cannot be less than 1 euro. If the mandatory minimum price level is lowered, outstanding shares will not be considered valid. The total amount of the authorized capital is 50,000 euros, 12,500 euros of which must be paid when opening a company.

2. Limited Liability Company (GmbH).

A GmbH is considered one of the most popular options for setting up your own business in Germany. The work of such companies is governed by a special law, which requires the founder to be responsible for the affairs of the company with their own property. One or more partners from among individuals or companies can open a GmbH. The main disadvantage of starting a GmbH is the large size of the authorized capital. It cannot be lower than 25,000 euros. At the same time, partners can independently distribute their ownership shares.

3. Unlimited liability partnership.

This form of ownership for the organization of a legal entity in Germany is the least attractive since all the founders of the company are fully accountable for the company's liabilities. At the same time, the company won't have legal status, despite the presence of a full package of preferences. However, starting an unlimited liability partnership may be attractive when relocating an enterprise to Germany. The fact is that this form of ownership allows you not to publish official reports, the founders may be persons with any citizenship, and all decisions regarding the affairs of the company can be made by one person or a group of persons, depending on the initial agreements.

4. Limited partnership.

This form of business organization is distinguished by the presence of the main shareholder, who is a general partner with unlimited liability for the company's affairs, and regular shareholders who will not sacrifice their assets in the event of an unsuccessful business. One of the negative aspects of a limited partnership is a high authorized capital, which is 50,000 euros.

5. Corporate partnership.

It is a symbiosis of a GmbH and a limited partnership. It is quite popular in Germany due to the ability to minimize personal liability for the affairs of the company. In Germany, this partnership is usually used to register a small or family business, where partners are several people who are well acquainted with each other. Please note that a corporate partnership is recorded in the register of shareholders and the sales office.

The second most important issue that a businessman needs to solve when relocating a company to Germany is how to transfer a business to another country. In Germany, the entity can:
  • 1
    Register a subsidiary of a parent company, which is governed by the tax authority in its home country.
  • 2
    Open a completely independent company, which will be a copy of an existing business.
  • 3
    Open a new direction in an existing business by creating another company in Germany.
  • 4
    Become a shareholder or member of an already operating company in Germany.
  • 5
    Completely acquire a ready-made and previously operating business.
When choosing any of the above methods, it is important to consider that all actions must be transparent to the German authorities. Germany is one of those countries where the practice of using quasi-legal schemes and forged documents is practically not developed. Moreover, the use of dirty methods can cause serious legal problems.

Moving a business to Germany: the main steps

To register your company in Germany, you must take several steps. A distinctive feature of opening a company in the state is the simplicity and clarity of the entire procedure and minimal bureaucratic barriers.

Step No. 1. Creating a business plan

To obtain a residence permit in Germany and register your own company, you need a well-written business plan that will include a strategy for the operation and development of the enterprise. The document must be prepared following the standards of the regional chamber of commerce and industry (DIHK / IHK), banks, and legislative departments.

One of the requirements contains an instruction to develop a business plan in two chapters: the theoretical part and the analytical part that uses statistics, conditions for obtaining a loan, and other calculations.

Step No. 2. Registering a company

Starting your own business involves the collection and submission of a certain set of business documents that you can draw up on your own or use the services of professionals. Our specialists are ready to provide a full package of services, which include the registration of a company, its further maintenance, assistance in resolving legal and tax problems, as well as assistance in creating accounting documents.

To register a company, you will need the following documents:
  • 1
    Personal data of the founder of the company. This includes full name, place of birth, date of birth, as well as information about a foreign passport.
  • 2
    Statutory documents for a legal entity in situations where the founder is a GmbH.
  • 3
    Data on the size of the authorized capital and the distribution of shares within the company, as well as the payment order or other document confirming the deposit of funds.
  • 4
    Several company names, arranged in priority order.
  • 5
    The legal address of the company with the availability of supporting documents, for example, a rental agreement.
  • 6
    Business activity codes.
Please note that the German state authorities register a company in an average of 4-8 weeks. The final term will depend on the workload of the local registration authority and some other factors.

As for the financial issue when opening an enterprise in Germany, this will require an average of 1,500 to 5,000 euros. This cost will include the salary of a nominal (or real) manager, accounting services, payment for a legal address, mail services, as well as ordering printing, express printing, and notarized translations of documents.

Step No. 3. Completion of bureaucratic procedures in the Federal Foreign Office and the start of work

How to apply for a business visa to Germany in 2022

For business purposes, a Russian citizen is enough to apply for the short-stay Schengen visa (type C), which allows you to enter Germany to resolve business issues, including registering your own business. This visa allows a foreigner to stay inside the country for 90 days every six months and move from one EU state to another without any problems.

Note that in 2022, the rules for processing documents for obtaining a visa to Germany have not changed. To do this, a Russian citizen needs to book an appointment at any visa center, for example, in Moscow, and provide:
  • 1
    A visa application form with two attached photographs in the format of 35x45 mm.
  • 2
    Printouts of purchased tickets to Germany and back.
  • 3
    Receipts of payment of the consular fee.
  • 4
    Information about the booked apartment or hotel room.
  • 5
    Certificates from the current account on the movement of funds and the balance on the euro account.
  • 6
    Proof of income.
  • 7
    Completed medical insurance.
  • 8
    Foreign and general passport.
  • 9
    Extract from USRN.
  • 10
    Evidence supporting the business purpose of the trip. These include an invitation letter from your future business partner.
Please note that if you have a visa from another EU member state, you do not need to apply for a German visa separately. However, to avoid problems crossing the German border, it is advisable to enter the EU through the visa-issuing country.

You are most welcome to meet us both in Russia and Germany!

DVP | Moscow
ООО „Dr. Voigt & Partner"
Duchovskoy per. 17/10, 115191 Moscow, Russia
info@partnery-audit.com
+7 495 690 92 62

DVP | Hamburg
DVP Audit GmbH Wirtschaftsprüfungsgesellschaft
Erik-Blumenfeld-Platz 27 b, 22587 Hamburg, Germany
info@partnery-audit.com
Tel. +49 40 866 6740 Fax +49 40 866 67444