Company Registration in Germany

Legal Requirements for Business Setup in Germany

Given below are the legal requirements for online business setup in Germany-

Checklist for Company Registration in Germany

• A minimum share capital of EUR 25,000
• A minimum of 1 shareholder, who can be either a corporate entity or an individual
• At least 1 director, who may be of any nationality
• A local registered office address of the company
• A company secretary (if required)
• A supervisory board comprising a minimum of 3 individuals is mandatory

Types of Tax-Free Company Registration in Germany

The different types of tax-free company registration in Germany are mentioned below-

• Limited Liability Company (GmbH)
  A limited liability company, commonly known as GmbH, i.e., Gesellschaft mit beschränkter Haftung, is one of the most common business structures for company registration in Germany, which requires a minimum share capital of 25,000 EUR. However, the shares of a limited liability company cannot be transferred to the public through the stock market.
• Sole Proprietorship (Einzelunternehmen)
  A sole proprietorship, commonly known as Einzelunternehmen, is one of the simplest business structures for online company formation in Germany, where only the sole owner is held personally liable for all business debts and obligations.
• Joint Stock Company (AG)
  A joint stock company, commonly known as AG, i.e., Aktiengesellschaft, is a business structure best suited for large businesses having a minimum share capital of 50,000 EUR. However, the members of a German joint stock company are eligible to transfer their shares through the stock market.
• Partnership (Personengesellschaft)
  A partnership, commonly known as Personengesellschaft, is a common business structure that involves two or more individuals sharing profits and responsibilities within the business.
• Limited Liability Partnership (KG)
  A limited liability partnership, commonly known as KG, i.e., Kommanditgesellschaft, is the most common partnership structure, having unlimited liability to the capital contribution of each partner.
• Entrepreneurial Company (UG)
  An Entrepreneurial company, commonly known as UG, i.e., Unternehmergesellschaft, is one of the most popular types of business setups for startups and small businesses looking to establish their business in Germany.
• Branch Office
  A branch office is a legal structure preferred by most international entrepreneurs looking to establish a branch of their parent company in Germany. However, the parent company is held responsible for all liabilities and obligations of its branch office.
• Representative Office
  A representative office is the legal extension of the parent company, carrying out non-commercial activities like market research, building connections, and conducting promotions on behalf of the parent firm.
• Offshore Company
  Offshore company incorporation in Germany refers to a company incorporated in a foreign jurisdiction other than where it is primarily owned or controlled. The business structure established under the Offshore business laws in Germany must mandatorily register outside the main operator’s home country.

Post-Compliance Requirements to Start a Business in Germany

Congratulations on registering your business setup in Poland! Finally, it’s time to shift your focus towards the ongoing post-compliance needs to start a business in Germany and keep your business fully compliant with Poland’s regulations:

• Open a Corporate Bank Account
  Once the company registration requirements are fulfilled, the entities must open a corporate bank account needed to deposit share capital with our partner banks.
• Apply for VAT Registration
  In case your business activities require charging VAT, the entities must apply for VAT (Umsatzsteuer) registration with the local tax authorities, ensuring tax compliance, which is a key component of doing business in Germany.
• Hire an Employee & Set Up Payroll Systems
  The business entities must hire an employee and set up a proper payroll system, ensuring compliance with local labour standards and social security requirements as specified under the German Commercial Code.
• Regular Compliance and Reporting
  The registered entities must maintain regular compliance and ongoing legal & financial obligations, which include timely tax filing, adherence to corporate governance standards, and fulfilling reporting requirements.
• Apply for EORI Number
  The companies registered under the German Companies Act must apply for an EORI (Economic Operators´ Registration and Identification) Number, mandatory for the participants of foreign economic activities involved in import, transit, and export business.
• Accounting and Bookkeeping
  Upon successful company registration in Germany, the entities must maintain accurate accounting and bookkeeping records, outlining the rules for financial reporting, annual statements, and audits in the Commercial Register.
• Issuance of Social Security Registration
  In case the registered entities hire employees, they are legally required to register with Germany’s social security system, covering health insurance, pension, unemployment, and other statutory benefits.
• Acquire Mandatory Licenses
  Upon successful registration of a company in Germany, the entity must acquire mandatory licenses and permits needed to legally conduct commercial operations within the country.