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Starting a business in Germany: how to register your company in 2022?

Publication date: 05.11.2022
The Federal Republic of Germany is a European country that has been rightfully considered the economic center of the European Union for the past three decades.

Thus, opening a company in Germany is a great opportunity for any businessman to enter the European market for goods or services, work in comfortable conditions, and make a good profit.

Here we will take a closer look at how laborious it is for foreigners to open a business in Germany and what steps you need to go through.

The main positive features of Germany for doing business

A distinctive feature of local authorities and Germany as a whole is a loyal attitude towards foreign guests from other countries. Non-residents of Germany can receive a whole package of economic and other types of assistance for successful adaptation in this country. In this regard, we see business registration in Germany as the most successful option for growth and development as a businessman. Among the main advantages of local jurisdiction are:
  • 1
    Stability of economic and political systems. Germany is one of those countries that are not vulnerable to coups, and its economic system always survives global financial crises.
  • 2
    Access to all EU markets. The EU is a free trade zone for its member states, so German businessmen can sell products in most European countries.
  • 3
    Good geographical position of the country and a common state border with France and Switzerland.
  • 4
    Transparent accounting and work culture.
  • 5
    Reliable banking system with a high degree of capital protection.
  • 6
    Ability to work remotely from anywhere in the world.
  • 7
    Low entry threshold into the German business market. To open a company, it is enough to have a business visa, which can be obtained for up to 12 months.
  • 8
    After opening a business, you can obtain a residence permit for you and your family (spouse and children).
  • 9
    Good business reputation of German companies. Having a business in Germany makes it possible to successfully conduct business around the world.
  • 10
    The use of the German trademark indicates the high quality of goods and services.
  • 11
    You can open a branch or representative office in any EU country on simplified terms.
  • 12
    Business owners in Germany can receive preferential loans and subsidies.
  • 13
    Social guarantees. Foreign businessmen have access to preferential health insurance for themselves and their family members.
  • 14
    A simple and understandable tax system with the ability to reduce the tax base under certain conditions.
  • 15
    You can hire qualified personnel.
  • 16
    Developed logistics infrastructure.
  • 17
    High integration of Germany into the world economy, which allows you to freely enter any world market.

Opening a company in Germany: determining the legal form

Non-residents of Germany can select between two forms of business ownership, which are a joint-stock company and a limited liability company. Let's see how these options differ from each other.

1. Joint-stock company (AG).

In Germany, a joint-stock company can be founded by at least five persons, whose liabilities are distributed according to their ownership shares. An AG is not considered a popular way to register a company in Germany among foreigners due to its high entry threshold – the minimum required authorized capital for opening an AG is 50,000 euros, which will be distributed into shares. At the same time, these shares are considered exclusives that can be traded on the stock market. However, the last condition is optional.

To register this form of company, the founders will need 6,000 euros and a notarized agreement between the participants. For full-fledged work, data about the company must be entered in the Commercial Register.

Please note that once an AG is registered, the founders must elect a supervisory and management board that will manage the company.

2. Limited Liability Company (GmbH).

Opening a GmbH in Germany is a popular option among non-resident businessmen despite its strict business regulations. So, if you need to register a GmbH, you must consider the following factors:
  • 1
    The minimum required share capital is 25,000 euros, subject to a prompt deposit of 50% of this amount.
  • 2
    A GmbH can be established by one or several persons.
  • 3
    Members of the company must notarize the agreement on the foundation of a GmbH.
  • 4
    After starting a GmbH, the founders are required to choose the management of a company, i.e. a managing director or a board of directors.
  • 5
    A GmbH has the right to issue shares that can be distributed between the founders and the board of directors. However, these shares cannot be part of the stock system.
  • 6
    A GmbH has no restrictions on the German market.
  • 7
    A GmbH must have a registered address and a defined area of work.
  • 8
    GmbH data must be included in the German Commercial Register for the company to be registered as a legal entity.
DVP Audit specialists provide a full range of services to assist in the opening of a GmbH and AG in Germany.

Registering a company in Germany: steps to open a company

To open a business in Germany, a non-resident has to take some important steps.

Step No. 1. Preliminary activities

They include preparatory procedures for making several important decisions before registering your business in Germany. So, a businessman needs to decide on:
  • 1
    The size of the authorized capital and the form of business ownership.
  • 2
    The exact number of founders and the distribution of shares between them.
  • 3
    German bank for placement of funds.
  • 4
    The original business name.
  • 5
    Type of activity of the future company.
  • 6
    Legal address of the company.
Step No. 2. Collection of documents by the founders of the company

To open a company in Germany, you will need the following set of documents:
  • 1
    Foreign passport with a valid Schengen visa (type C). Please note that the purpose of the trip can be anything. This does not affect the registration of your company.
  • 2
    A package of constituent documents of a Russian legal entity, if it is the founder of a new company. All the documents must have a notarized translation into the local language.
  • 3
    Availability of special licenses and permissive certificates in case of creating a licensed business.
  • 4
    Prepared application for the entry of a new company in the German Commercial Register.
  • 5
    Payment order or other document proving the contribution of funds to the account of the authorized capital.
  • 6
    Receipt of payment of the registration fee.
  • 7
    Well-written business plan.
  • 8
    Foundation agreement.
  • 9
    Rental agreement for a legal address.
Step No. 3. Certification of the agreement for the establishment of a company by a notary

It is a fairly quick procedure, which is needed if there are several participants.

Step No. 4. Opening a bank account in Germany

To open a business bank account in Germany, the founder will need the following set of documents:
  • 1
    A foreign passport/passports of all members of the company.
  • 2
    General passport of a non-resident with a mark of registration – the one who will manage the account.
  • 3
    Constituent documents for the company.
  • 4
    Documents proving the authority of the director, if he manages the account.
As a rule, opening a bank account in Germany takes about 7 days. During this time, bank employees will carefully check all the documents and decide whether to open a deposit or not. If a positive decision is made, the account manager (director/founder) must personally come to the banking organization to sign the agreement.

After all the procedures are completed, the account manager can carry out transactions, withdraw funds from an ATM, and make cash withdrawals on behalf of the company.

Step No. 5. Appearance of an entry about the company in the Commercial Register

The most important document, without which the registration of a new company will not take place, is an extract from a bank deposit on the contribution of authorized capital. This means that before registration, the founders are required to at least open a bank account and deposit funds into it.

For the rest, the process of registering a company can take place without the participation of the founders. It is enough to agree with a notary or an intermediary law firm, which will forward the entire package of business documents to Germany. In this case, it is necessary to take into account the extended period of company registration due to the international delivery of documents, which takes up to three months. If the founder is in Germany, the waiting period is reduced to 1 month.

Step No. 6. Registration of a tax number and completion of activities for the creation of a company

Registration of a tax number involves the appearance of an entry about the company in the local tax office (Finanzamt). This is the longest of all the above procedures, which can take up to 6 months. At the same time, you cannot start working before assigning a tax number due to the lack of grounds for calculating and paying taxes.

The final stage of the registration process implies the signing of the constituent documents and the registration of your company at the trade office (Gewerbeamt). German laws prohibit any business activity before the completion of all registration procedures. In case of violation of the law, a businessman will pay a fine of up to 50,000 euros.

FAQ

The main currency of the European Union is the euro. It is used for settlements with counterparties from Germany, EU countries, and other states.

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