Founding a german Company: More and more people find the incentive to start a business in Germany. There are certain reasons for this. The market in Germany is future-proof and offers a high standard of living. In order to maintain this competitiveness, foreign investors or entrepreneurs find the incentive to expand their existing business to Germany or start a new business.
Legal Form for a new business
There are several company forms in Germany. The most common company form is “Gesellschaft mit beschränkter Haftung (GmbH)“ (Company with limited liability). A special feature of the “GmbH” is that shareholders can not be held liable with their private assets. Just one person is sufficient to set up a “GmbH”. The share capital must be at least 25.000 € but for the establishment the payment of half of the share capital is sufficient, nevertheless the members have to pay at least a quarter of their shares. A notarial certification between the shareholders is obligatory for the entry in the commercial register (Handelsregister). With the entry in the commercial register the legal existence of the GmbH begins.
Company name must include „GmbH“
The company name must contain the name „Gesellschaft mit beschränkter Haftung“ or a generally understandable abbreviation of that name, such as “GmbH”. Shares in a “GmbH” can not be listed on stock exchanges. However, it can be transmitted through properly notarized documents. A “GmbH” must appoint one or more managing directors, who may also be shareholders of the company and who are the only authorized representatives.
Incorporate as Foreigner
Founding a GmbH as an EU citizen
There are many legal framework conditions in this country. This is especially true when foreigners want to start a business in Germany. In general, freedom of establishment and freedom of trade apply to all persons within the EU, the EEA and Switzerland. This means that everyone is allowed to set up a business in all member states and there is a right of free movement in the respective state of residence.
Founding a Business as a non-EU citizen
Anyone arriving in Germany from a non-EU state to start a business receives a residence permit that covers self-employment. Persons who are already in Germany and have a valid residence permit can supplement this with the point of permission for self-employment. However, there is a lot to check for this permission. As a rule, at least five new jobs should be created and at least half a million euros invested.
If the founder has his whereabouts outside Germany, he must apply to obtain a residence and business license in Germany. This application has to be made to the respective diplomatic mission of the “BRD” (Federal Republic of Germany).
How to start a Business in Germany: Tax Consultant in Cologne & Bonn
We would like to refer you to our tax consultants with regard to setting up a business or start a business. We are open to all your questions about starting a business or expanding an existing company to Germany. You can contact us by e-mail: email@example.com or by phone: +49 228 299 748-10