Company registration in Germany

Germany is a prime location for business in Germany, offering a transparent and reliable environment. According to the Transparency International 2022 Corruption Perceptions Index, companies in Germany benefit from a system ranked among the top ten least corrupt globally. This transparency ensures fair competition and protects investor rights, making it an attractive destination for entrepreneurs.

Why choose Germany for your business?

Germany’s robust economy, ranked fourth in nominal GDP, supports a wide range of businesses, including German Gmbh entities and company registrations. Many international firms establish their companies in Germany, benefiting from innovation hubs, R&D centers, and extensive business registrations opportunities. Technology parks and clusters provide opportunities for resource sharing and product development.

Types of companies in Germany

Several popular legal business forms exist in Germany, such as the joint-stock company (AG) and the limited liability company (GmbH). We recommend registering GmbH in Germany, as the registration process is less complicated, and the tax conditions are more favorable.

Founders (at least one participant, either a natural or legal person with no residency requirements) and a director must be specified.
The director of a GmbH must be at least one natural person, and residency is not required. A founder with a work permit in Germany can also serve as a director.
The share capital of a German GmbH must be €25,000 and fully paid during registration in the German Commercial Register or secured by a bank guarantee for the unpaid portion. If the company has two or more founders, half of the amount—€12,500—can be paid during registration, with the remaining amount contributed within the first year of operation.
If the owner, who holds over 50% of the company’s shares, is also the director, the director’s salary does not need to be paid.
The founders’ liability is limited to their contributions to the share capital.
A secretary is not mandatory, but the company must work with a business consultant.
Information about directors and shareholders is public and stored in the Commercial Register.
German GmbH must maintain accounting records and submit annual financial statements.

Steps to register a GmbH in Germany

Initial consultation with Finevolution experts

Acquisition of a tax number

Notarization of the Articles of Association

Filing with the local trade register

Court registration of the German GmbH

VAT registration and accounting setup

Initial consultation with Finevolution experts

Notarization of the Articles of Association

Court registration of the German GmbH

Acquisition of a tax number

Filing with the local trade register

VAT registration and accounting setup

Order consultation

Legal consultations for business

A tailored approach to every case

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Opening a payment account for business

Choosing a modern NEObank payment account for business

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VAT consultations in Europe

Our team will be glad to help with VAT issues

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Timeline and requirements

The average time to open a bank account after the initial visit is at least one month. The registration timeline for a turnkey German GmbH is no less than one month until the company is entered into the commercial register. Obtaining tax identification numbers takes between 3 and 6 months.

Documents required for Germany business registration

Three unique company names ending with “GmbH”
Completed application form
Founder and director questionnaires
Identification documents of founders and directors
Articles of Association and business activity details
Notarized document establishing the organization (for subsidiaries of foreign entities)
Notification to local authorities
Proof of payment for mandatory fees

Note: If a founder or director is married, their spouse must be present during document signing; to avoid this requirement, registration by power of attorney is recommended.

Registration package includes

Comprehensive support throughout the process
Document preparation expenses
Notary fees
Government fees of EUR 1,000
Translator services
On-site assistance
VAT number acquisition

Business taxation in Germany

The tax year in Germany consists of 12 months or the reporting period if it is shorter. The reporting period for a GmbH must not exceed 12 months.

Corporate Income Tax

Basic rate – 15%
Resident Companies – taxed on worldwide income, while non-residents are taxed only on income generated in Germany. Branches are taxed similarly to subsidiaries
Taxable Income – includes company profits derived from commercial/trading income, passive income, and capital gains. Ordinary business expenses can be deducted when calculating taxable income
Municipal Trade Tax – ranges between 14% and 17%
Effective CIT (including surtax) – from 23% to 33%
Solidarity Surcharge – 5.5% surcharge applies to personal income tax and corporate income tax

Additional provisions

Capital Gains – 95% of capital gains from selling a German or foreign subsidiary are tax-exempt
Dividends received by a German company (from both resident and foreign companies) are 95% tax-exempt (the exemption does not apply if shares are held by banks or financial services institutions for trading purposes). Minimum ownership requirements may apply
Withholding Tax – standard rate is 25% (26.375%, including the solidarity surcharge). A 40% refund for non-resident companies is possible, reducing the rate to 15.825% unless reduced by a tax treaty. Dividends under the EU Parent-Subsidiary Directive are exempt from withholding tax
Royalties – paid to a non-resident company or individual are taxed at 15% (15.825% with the solidarity surcharge) unless a lower rate applies under a tax treaty or the EU Interest and Royalties Directive
Losses – can be carried back one year and carried forward indefinitely
Minimum Taxation – losses can be offset against profits up to €1 million without restrictions, but only 60% of income exceeding €1 million can be offset by carried-forward losses. Direct or indirect ownership changes exceeding 25%/50% by a single shareholder result in partial/complete loss of carried-forward losses. Losses are preserved if the individual or company holds 100% of the shares during the transfer and acquisition
VAT applies to the sale of goods and services. The standard VAT rate is 19%. Some transactions are VAT-exempt

VAT reporting and accounting for businesses in Germany

All German entrepreneurs are required to register for VAT. The registration threshold is a turnover of €17,500 in the previous calendar year and a projected turnover of €50,000 in the current calendar year. Non-residents supplying taxable goods and services in Germany must also register for VAT.

The tax year corresponds to the calendar year. Entrepreneurs must submit an electronic preliminary VAT return quarterly by the 10th day of the following month and pay the tax. If input tax exceeds VAT, a refund is issued. If the VAT liability for the previous calendar year exceeded €7,500, declarations must be submitted monthly.

Ready to register business in Germany? Don’t delay—start this process today! Contact our specialists for a consultation, and we’ll promptly begin the company registration process. Business Hours: Monday to Friday, 9:00 AM — 7:00 PM. Contact us via WhatsApp, Telegram, or Viber, or submit an inquiry through our online form.

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