German Company Registration

Germany’s economic environment and investment environment are relatively stable. With the rapid development of cross-border trade in recent years, it is no longer a difficult task to develop consumer markets in Europe. Germany enjoys the excellent environment of the global economy at the same time, but also with excellent development results, successfully gathered the world’s famous enterprises to invest in. At the same time, the European economic investment boom, more and more Chinese enterprises have landed in Germany, with Germany’s central position in Europe, to expand the market in Europe, registered German companies have become the current cross-border import and export enterprises a new way of investment.

Advantages of establishing a company in Germany

1、Enjoy the same rights as German companies

German corporate law makes no distinction between companies established by local and foreign nationals and adopts a policy of equal treatment. Therefore, Chinese enterprises can start and operate companies in the same way as German locals.

2、Keeping tax revenue at a low level

Registering a new company in Germany can enjoy government office rent subsidies, employee wage subsidies, high-tech export subsidies, investment subsidies, etc. Registering Otto and Amazon stores with a German company can avoid platform withholding, VAT self-reporting, and can reasonably avoid tax.

3、Operation of the company is not restricted by geography

Compared with the policies of the United States, New Zealand, Australia and other countries, Germany company registration capital is small, fast approval, no strict language requirements. Although the company is established in Germany, but the applicant can use business reasons do not need to live in Germany, as long as the company is really good operation can be.

4、Improve corporate brand image

German companies are more trusted by German consumers, and customers will prefer German companies when shopping for the same products, using the name of German companies to buy and sell properties, international trade, freedom of capital entry and exit, and high credibility.

5、Opportunity to get German permanent residence and enjoy high welfare

After the establishment of a company in Germany is approved, the applicant and his family members can obtain a residence visa in Germany, and with this residence visa, the applicant and his family can be included in the medical insurance and pension insurance plan of Germany. After three years of establishing a company with good operation, the applicant can also exchange for permanent residence in Germany and enjoy high welfare in Germany, which creates better business opportunities and conditions for foreign investors.

1. Limited liability company (GmbH)

The minimum registered capital of a limited liability company (Stammkapital) is now 25,000 Euros, with the corresponding liability, and personal property is excluded from the company’s liabilities. The company can be established by one or several shareholders. The registered capital may be contributed in funds and in kind, with a minimum contribution of €100 per share and a nominal value of €50 in shares, with the shareholders’ contributions being in multiples of €50. No shareholder may subscribe more than one basic contribution at the time of registration of the company. If the capital is contributed in kind, the subject matter of the capital contribution in kind and the amount of the capital contribution must be stated in the articles of association. The internal management structure of a German company differs from that of the United States and China in that the chairman of the board of directors is the chief executive officer (CEO) and there is no separate general manager. The chairman of the board of directors is the general manager or president of the limited liability company, which is called Vorsitzenderder Geschaeftsfuehrung in German, and the director (Geschaeftsfuehrer) is the deputy general manager or vice president. Some limited liability companies, because of their small size, have only one Geschaeftsfuehrer, who is the chairman of the board.

2. Joint Stock Company (AG)

The minimum registered share capital of the AG (Grundkapital) is currently EUR 50,000. The minimum nominal value of each share is EUR 1. The stock corporation may or may not be listed, but the listing is subject to approval. The application for listing is made by the German credit institutions and the approval is carried out by the stock exchange. The stock exchange is responsible for the approval. The stock exchange also assumes limited liability corresponding to the registered share capital. The shareholders’ meeting (Hauptversammlung) of the stock corporation elects the supervisory board (Aufsichtsrat), which appoints the board of directors (Vorstand). As in the case of limited liability companies1 , the members of the Board of Directors may or may not be shareholders, but in most cases are not, and are appointed on a contractual basis. The functions and responsibilities of the Chairman (Vorstandsvorsitzender) and the Directors (Vorstandsmitglied) are no different from those of the Chairman and Directors of a limited liability company, except that the German names differ.

Like the AG, the GmbH is also a purely corporate company Formkaufmann. Unlike the AG, the registered capital of the GmbH is not divided into one share. It is based on the German law, the most direct limited company law GmbH-Gestz (GmbHG for short), limited companies in Germany under the federal registration statistics in Part B, so your application for registration written to the court payable to: Amtsgericht-Handelsregister

Special companies (special form of branch offices of foreign companies in Germany)

The term “branch” in our corporate law literature refers only to a branch of a company or a branch of a bank, and does not include independently owned or joint venture subsidiaries, nor does it include representative offices in other places or countries, which are also referred to as representative offices. The term Niederlassung in German is a broad concept that covers all three of these situations, and the following discussion of branches is based on the German concept.

1. Representative office (Repraesentanz)

The procedure for establishing a representative office in Germany is relatively straightforward and requires only registration with the local business registration office (Gewerbeamt), and the principal person in charge is exempt from work permits. According to the relevant German regulations and the agreement between the German and Chinese governments to avoid double social insurance, the representative office personnel are “dispatched” (Entsendung) and have no obligation to participate in social insurance in their home country. Since the representative office is not an independent legal entity, it can only engage in indirect promotional activities such as customer contact, market research and after-sales service on behalf of the domestic parent company in the host country, and cannot sign legally valid economic and trade contracts; similarly, since it is not an independent legal entity, the representative office is not required to pay corporate income tax, business tax and other taxes that legal persons must pay, but at the same time, it cannot refund taxes (value-added tax on common goods of the representative office). The only tax payable is the personal income tax (Lohnsteuer).

2. Joint Venture Company

Germany has a social market economy and is a high welfare country. Once an employee is hired by a joint venture company, he or she must be insured against five statutory basic insurance policies: pension, medical, nursing care, unemployment and work-related accidents. The current rates of the five statutory insurances are 19.5%, 13.7%, 1.7%, 6.5% and 2.7% (the rates for work-related accident insurance vary by industry, where 2.7% refers to the rate for the wholesale foreign trade industry). The additional cost of the social insurance portion of wages paid by employers is about 23.4% of the total wages of employees.

3.Zweigniederlassung (a branch of a joint venture company)

After setting up a limited liability company or a joint stock company in Germany, a foreign enterprise may, according to its business development needs, set up a branch office in a city or place other than where its headquarters are located. For example, COSCO Germany GmbH is headquartered in Hamburg and has a branch office (Zweigniederlassung) in Bremen, the second largest port in Germany. Its Bremen branch is not an independent legal entity, and its salary is paid by the head office in Hamburg, and the annual accounting report is submitted to the head office in Hamburg for consolidation after completion. It should be noted that although the branch office is not an independent legal entity, it is still required to register and obtain a business license in accordance with the relevant German regulations.

Scope of business in Germany

In principle, the scope of business of German companies is not too restrictive, enterprises can operate any nature of business, such as: finance and investment, health care, shipping, import and export trade, real estate, construction, decoration, information network, clothing and textiles, tourism, cultural publishing, etc.; some companies that are more difficult to register in Germany can be registered in Germany, the German government allows the company name contains the words international, group The German government allows the company name to contain words such as international, group, holding, industry, investment, institute, association, center, research institute, etc., but there must be specific operation and operation.

German company registration procedures

1、Declaration of business. To start a business activity in Germany, you must make a declaration. You must register your business in writing with the local government’s “Office of Economy and Order” (sometimes called the “Business Registration Office”) and obtain a business license (Gewerbeschein). A declaration is also required when extending the scope of business, such as installing vending machines in public places (e.g., selling cigarettes or candy) within the scope of business or as an additional business. A copy of the return will be sent to the local tax office, the occupational cooperative and the Chamber of Commerce and Industry by the above-mentioned organizations, and the applicant does not have to file a separate return himself. Failure to file a return or failure to file a return in a timely manner in violation of the regulations will result in a fine. If approval is required, a separate approval fee will be charged.

2、If it is an individual enterprise, the owner of the enterprise shall report; a limited liability company shall report by the general manager; a two-company company shall report by the shareholders with unlimited liability; a civil law company or a company with unlimited liability shall report by the shareholders; a joint-stock company or a registered association shall report by the chairman of the board or the chairman of the board. In the case of a legal entity (such as a limited liability company), a copy of the business registration and the approval of the industry are required; in the case of a manual business, the “Handwerkskarte” (manual business card) is required.

3. Business registration. The company must use either the name of the business object, or the name of all shareholders, or the name of at least one shareholder with a note indicating the form of the company, as the business name of the company. The name of a person other than a shareholder may not be used in the business name of the company. The business name of a joint stock company must include the words “limited liability company” or “joint stock company”. The name of the company must not be misleading as to the scope of business of the company and should be clearly distinguishable from other local company names that have been registered with the court.

4. Prior to registration, the limited liability company must pay a total cash contribution of at least 50% of the statutory minimum registered capital, i.e. EUR 12,500,000, with the remainder being contributed in kind, which must be paid to the company before registration. In addition, if the company is established by one person, the founder must also submit a guarantee for the unpaid capital balance. The registered capital of a joint stock company may be paid in cash or in kind, but the in-kind contribution must be evaluated to determine the value of the in-kind contribution.

5、According to the German Commercial Code, a company must be incorporated in a public and credible form in a local court, i.e., through a notary for business registration to be entered in the commercial register. The commercial register is divided into two categories, A and B. Single trader and joint venture companies are registered in category A (registration number HRA…) and joint venture companies are registered in category B (registration number HRB…). The registration procedure must be carried out by a notary public approved by the local court, who submits to the local court an application for business registration signed by the chairman (general manager) of the company.

Documents required for company registration in Germany

1、Provide 3 German or English names of German companies;

2. A copy of the director’s identity card and passport (electronic version);

3. A copy of the identity card and passport of the shareholder (electronic version); if the enterprise is the shareholder, a copy of the enterprise license and corporate identity card;

4. Bilingual notarized documents of the director’s and shareholder’s passports and the Embassy’s certification documents;

5. Bilingual documents of all shareholders and directors, such as personal property certificates, utility bills, telephone bills, etc. for the past three months.

6、Registered capital (default minimum 25,000 Euros, minimum 12,500 Euros paid in advance);

7. Provide the percentage of shareholding of each shareholder;

8. the general scope of the company’s operations;

9. the permanent address and contact details of the shareholders and directors;

10. the purpose/reason for the registration of the establishment of the German company and the scope of business;

Time to register a German company: about 2-4 months.